Aledade Founder & CEO Farzad Mostashari: Preserving the Autonomy of Independent Practices to Drive Real Value in Healthcare

Dr. Farzad Mostashari’s extensive resume doesn’t fully convey the
true value he brings to reimagining healthcare. He’s the former
National Coordinator for Health IT at the Department of Health
and Human Services, served as assistant commissioner at the New
York City Department of Health, was an Epidemic Intelligence
Service officer at the CDC, a fellow at The Brookings Institution
and a resident at Mass General Hospital. Yet, with all that
experience, he says living through the Iranian revolution before
moving to the U.S. at age 14 is what fuels his ability to see
things differently.

As he told Keith Figlioli, “seeing an actual revolution does
something for your sense that things can change; that you can be
looking at one reality one day, and a different reality the next
day.”

In this episode of Healthcare is Hard, Farzad talks about how
he’s never been totally comfortable inside – or even leading –
the grand institutions he’s been part of, and at some level, has
always felt like an outsider. He describes his ability to see the
insider and outsider perspective, his natural disposition to see
things differently, and how this trait led him to found
Aledade.

Most of the industry looked at the Medicare Shared Savings
program in the Affordable Care Act and assumed that hospitals
needed to be at the center of creating and sharing in savings.
But after noticing the law didn’t require a hospital, Farzad
began building a network of primary care doctors who could treat
people upstream, reduce hospitalization and lower costs.

Seven years later, Aledade has assembled 800 practices in 35
states and has $12.5 billion in annual medical spend under
management. It’s helping independent physician practices deliver
better care, reduce overall costs and preserve their autonomy in
communities all across America.

Farzad brings his outsider mentality and inclination to see
things differently to his conversation with Keith Figlioli on
this episode of Healthcare is Hard. They cover a number of topics
including:



Dis-economies of scale. Farzad talks about how
healthcare is one of the few industries where organizations
tend to lose money as they get bigger, and how it all maps back
to fee-for-service. The main driver of consolidation in
healthcare has been the need to build leverage at the
negotiating table. But he says if you change the rules of game
– including what’s being valued, rewarded, and compensated –
you actually see that the small guys do better.


Independent vs. Institutions. Farzad sees this as a
proxy battle. He says if you’re betting fee-for-service will be
the future of healthcare, bet on consolidating health systems.
But if you’re betting on value, bet on the independents.


Trust in policy makers. As someone who has lived on both
the public and private sides of healthcare, Farzad sees that
many people in the private sector are highly skeptical of
healthcare policy makers. But in his experience, smart policy
makers are motivated by evidence and doing the right thing to
help improve care and lower cost. He says leaders in the
private sector who understand this are in a better position to
navigate the potential regulatory risk impacting their
business.


A decade of vision driving real value. It’s taken a long
time to build much of the infrastructure that started under
Farzad’s leadership at ONC almost ten years ago. And now, the
combination of new incentives with data-driven capabilities the
industry has talked about for a long time are very real. These
elements have already created billions of dollars in value that
couldn’t exist before, and that impact will continue to
multiply.



To hear Farzad and Keith talk about these topics and more, listen
to this episode of Healthcare is Hard.