He runs a 250+ employees immediate care facility

Welcome to another CEO Wisdom Pod. We have Brent Kell with us today. Brent is a CEO at Valley Immediate Care. He's been in healthcare management for a very long time, 25 years. Uh, so Brent, welcome to the podcast. Tell us a bit more about yourself and what you've been up to.

Yeah, thanks, Charles. Actually, healthcare management for much longer than that. I started out managing veterinary practices way back when. Moved into human medicine and managed a large orthopedic group for about 10, 11 years, and then been in urgent care for about 25 years. So always, always enjoyed being in healthcare in all different manners and job titles. So, and I'm kind of passionate about what we do.

Yeah, yeah, I can tell. Why switch from veterinary to human doctor?

It's a monetary thing. You know, everybody wants to be a vet tech, veterinary medicine. For the cost of education and the time spent in education does not pay very well at all. So you got a young family, you need to make more money, and that usually is on the human side of medicine.

Right. And yeah, where— when did you exactly get into Valley Immediate Healthcare? And were you CEO like from your first days? Like, what was that transition?

I was kind of a consultant when I first started. So started in— this is late 2022. I came on board. It was a— it was an early project. They're about 2 years into the project. Uh, they were started by 3 ER docs that saw a need for urgent care in our valley. They got up and going, uh, struggled with early leadership. Um, and so I was starting a mobile x-ray business. I'm a rad tech also. Met them, they said, hey, you know, would you like to kind of help us get going? I said, well, I'm working on this other project. They said, we're entrepreneurs too, you're welcome to work on your project, but we need to get Established with good leadership. We think there's a business model that's going to work here. They were just starting to make a little bit of money 2 years into it. So I agreed to come on for a year to get them going. And once I got to know them, the contrast between these ER docs and family practice docs versus orthopedic surgeons was pretty stark. Orthopedic surgeons are, are very monetarily driven. They aren't particularly pleasant people. They don't have a lot of social skills. And so when you're managing a group of orthopedic surgeons you're fixing their social mistakes all day long with staff, with ER staff, with operating room staff. And my life is too short to be cleaning up other people's messes. So, but once I got to know these guys in urgent care, they matched what I thought was a kind of a healthy approach to business and to the community and to their staff. And so about 24 years now I've been there.

And were you always like a business-minded manager, right? Or were these skills that you had to develop along the way?

Yeah, I think I developed the business because I've always been a leader. I've always got, you know, I was always the kid that got stuck on leading a team. Boy Scouts, I was always the team lead, the patrol leader. Search and rescue teams, I became team leader. Ski patrol, I was, I was one of those people who step up and willing to make things happen. And so I think I had those skills probably, but I had to develop the business side of it. I was very mission-driven. I understood how to kind of complete a mission, but it took me a while to kind of really get a balance between the mission and also it's a business, right? You've got to make money or the business doesn't succeed. So, I developed those along the way. I did go through an ag business program earlier in my career. So, even though I didn't think I'd use that ever again, the accounting and bookkeeping, business law, those provided me a pretty good foundation for what I'm doing now.

Right. Yeah, I love it. So, at first, it was a bit chaotic. Yeah, let's say the first decade, what was it about? Was it about installing systems? Was it About recruiting people? Was it more about growth? Tell me about like these—

Yeah, all the above. All the above. It was first about getting a solid staff. So when I, when I got to Valley, there were 7 people total. Uh, we had no benefit structure. Everybody moonlighted. They worked at a hospital or another hospital. They'd come in and do a couple weekend shifts, a couple evening shifts. Nobody looked at this company as being their place of employment. It was just some extra dollars. So I had to change that. I had to get some benefits going on a very slim budget. Beg, borrowed, stole, whatever it took to get some benefits. So I got group health insurance, some paid time off, some other benefits that I kind of worked on. And so that was number one. Number 2 then was to open a second location. We were starting to look like this business model is going to take off, and at least in Medford, our first community where we started, we thought there was business for at least 2 urgent cares, if not more. And so we really did need to get ahead of the competition. We knew there's some people poking around. With the same idea. So it was really about getting that second location started and getting some benefits. And actually, that wasn't the first 10 years, that was like the first year and a half it took us to get there. Then we started growing kind of organically from there. We looked at Grants Pass to our north as another community who could use an urgent care, opened out there. Then came the recession, kind of cooled our heels a little bit, didn't shrink a lot but didn't grow for a while. Had a chance to kind of solidify during that time our policies and procedures. Kind of create some synergy and some connectivity between the community partners during that time. And so we grew our community resources quite a bit during the recession. And then when the recession was over, then we started opening clinics again. And then some of our specialty clinics, so our occupational health, our dermatology, plastic surgery, sports medicine, orthopedics, were more opportunistic than intentional. We intentionally growing the urgent care model, but we realized that there's a shortage of other specialties in our community. We began to be seen as a place that was very friendly to healthcare providers. We gave them some autonomy. We treated them— our company, our— my team, we call the chain of support. Very different paradigm than a hospital where you have the chain of command. And so we started having providers come to us. Hey, do you Would you like to hire a plastic surgeon? I want a practice location where I'm valued and I have some say-so. A couple of derm PAs, a dermatologist. After that was a sports medicine doc and a PA that has orthopedics. So we've kind of attracted this culture of folks that want some autonomy and want to work for a place that is very community involved. And also with the urgent care, we can feed all these other practices as well. So we've kind of, without intentionally going after it, we've developed a whole health system now.

Right. Um, but when you arrived, so it was mostly orthopedics, then urgent care, you helped develop that, or were there also urgent care when you just arrived?

When I arrived, it was solely urgent care. So I brought the orthopedic background from orthopedics. Got it. You know, I'm a rad tech and ortho tech, and so that was kind of like slipping an old pair of slippers for me to add those services. I understand that service line really, really well. Uh, some of the dermatology I had to learn, occupational health We also did that orthopedics, you know, treatment of work injuries. So I kind of understood the system, and, and it's a very different paradigm when you're treating an injured worker. You have not only injured worker in the exam room, you also got the adjuster, you've got the employer. You know, it's, it's, it's a dance to keep everybody satisfied and, and get that employee back to work, uh, as soon as possible. So I kind of understood that piece as well. Um, so I had some background to help me, but some of the service lines were like totally new to me.

So how does that work? Companies pay you per month, and whenever they get an injured worker, that covers that? Like, tell me a bit more.

So yeah, the models vary, and depending on the state, models also vary. So in Oregon, it's a fee-for-service. So we treat an injured worker, then we get paid for that office visit. If we do drug screens, pre-employment physicals, hearing tests, spirometry, pulmonary function tests, Those get paid for directly by the employer, not the insurance company. We also, though, have a really innovative program called My Urgent Care 365 that employers can actually buy non-work-related care for their employees. So for $30 a month, they can pay us, you know, the flat rate employees, if they need to see us for a non-work-related injury or illness, $10 copayment, they get half off of x-rays, labs, everything we do. And so we're also selling that product, you know, It's kind of the anti-insurance vehicle.

Right. What kind of injuries do you see the most in Medford, Oregon?

All the sports injuries. We got real active sporting. It's a really active community also, even in the upper age groups. So we have a ski hill in our backyard, lots of hiking, a ton of mountain biking, which creates a lot of injuries. A lot of our jobs are working in the woods, wildland firefighting, tree planting, construction. So those always produce a lot of injuries. The most gnarly injuries, probably chainsaw injuries. A lot of people work with chainsaws, and those tend to be very catastrophic and dirty and very time-consuming to put back together.

Yeah, my brain's like, how does that happen? Like the chainsaw like pops off and then chops apart?

Yeah, it's usually fatigue. You know, people run a chainsaw, heavy upper body work, you work beyond your window of where you feel like you're in control of the saw. And typically either they're working below their waist, you know, cutting up wood and they hit the thigh. That's real common. They do make chaps, Kevlar chaps, that most people should wear. Not everybody does. Or unfortunately, they're limbing and they got the saw above their head and it kicks back and hits them in the neck or the head or the ear. Those, those are pretty gruesome injuries.

But at least it's not bullet wounds. Like, there's cities that are pretty rough, right? Like in the US, what was it, Baltimore, right? It's like tons of bullet wounds and just All kind of, yeah, or violence-related, right? Like people getting drunk out of their minds. There's yet also like, um, you know, the opioid crisis. Like some patients that are just—

Yeah, we're still dealing with that. When I first got to Valley, uh, and certainly when I was working in orthopedics, uh, there was tons and tons of patients who were addicted to opiates. And when I came over here, you know, they go, where are they? My opiates? I'm gonna go to urgent care. I'm gonna tell a story and And, you know, our industry kind of abandoned those folks. Our industry created those opiate addicts. Here's pain meds, just keep treating pain. And then all of a sudden we say, oh, opiates are bad, you terrible people, you're addicted to opiates, you'll get out of my office. And so, um, luckily that wave is washed over now and we have a few incidents, but it's not like it was 20 years ago. Much extremely improved over that time.

Right, right. Uh, and nowadays I see you have like a strong digital presence. What's the growth plan? Uh, and why not go like How big can you get? Can you build a full Mayo Clinic with that model?

Good question. We're having those conversations. Part of it is our ownership, me included. We're kind of, you know, getting up there in age, and how much do we want to continue? I'm probably the driving force behind most of this, and I plan to work for a while longer, but I've got to be able to develop those people to come behind me to kind of stoke those fires I'm building. I think, you know, we're in a kind of a pocket in Southwest Oregon where we'd have to expand several hundred miles outside our region to really get to larger population bases. And that creates some logistical issues. We had a little clinic over at the coast, which is 2 hours away, very small clinic, but just managing and maintaining and building those relationships. Eventually, I came to the realization I couldn't spend 1 day a week for 1% of our business. And so we let that one go. So I think we'll stay within our region, but certainly we can grow orthopedics, we can grow our dermatology, our occupational health. We're on track to double occupational health in the next year. So There's lots of opportunity here for us.

And most of your clients, what, like 75% of your bills are paid through Medicaid or Medicare? Is that, uh—

No, it's less than that. We're currently at about 50% Medicare and Medicaid. Uh, the rest is, is commercially paid or the work comp. And so 2 things that we have an advantage in Oregon is our work comp pays pretty well. That's why I'm chasing that business. But also what I market to employers there's some cross-pollination. So if an employer sends their injured worker to us, we treat them well. Well, when they have a sore throat or the kid thinks they broke their finger, they're going to naturally come to us as well. So yeah, I love that.

What about like insurance companies? Uh, did you consider that Medicare as well, the insurance payouts?

Uh, well, Medicare is kind of our federally funded in the United States. Then we have Medicaid, which is typically managed by the states, although it's federally funded also. So it's more low income where Medicare is more towards the elderly. But we also have the commercial insurance, which is like Blue Cross Blue Shield and Cigna and UnitedHealthcare. And those, we work with all of them. I have some very strong opinions about kind of what should happen in this country, and that is a single payer system. Our system is really broken. Medicare, which is our federal payer, has a 4% overhead. We don't really know because they're privately held companies, but most of the private insurance companies carry a 25 or 30% overhead. Wow. So if you took that 25 or 30%, put it back into caring for people, then you take the army of people we all employ to have to bill insurance to follow these archaic, silly rules, we could do a much better job of taking care of Americans for sure.

And simpler said than done, right? How easy would it be to implement that system?

The challenge is, is that insurance companies control lots and lots of lobby money. And so for them to come out, for us to come out, for a legislator to come out and propose— and it's been proposed, there are some people that have proposed this— would be very catastrophic to their budgets for their reelection budgets. And so—

Go ahead. Sorry.

Oh, so that's— it's always you're fighting upstream and we're going to keep fighting, but you're fighting upstream for sure.

And with your system, right, like the layman version of it, so it would be one system for pretty much everyone. How would it be simpler than you can use, like, just repeat like the Yeah, basically it's just like everybody has Medicare.

Everybody already has their number and it's called your Social Security number. Everybody has coverage. Um, the, the problem in, in most countries that have gone to this model is you don't have unlimited access anymore. The access is more, much more pragmatic. Uh, but the dollars would go to care for patients, not in insurance executives' pockets and the lobbyists' pockets.

Okay. And that would be simpler for folks like you as well, right? Because it's less overhead and administration of who gets what.

All the bills go to one place, they're adjudicated in one place. There's not all these different rules, different insurance companies. We have, we have 185 employees right now. 25 of those employees exist only because we got to follow these stupid rules about—

That's crazy.

Uh, insurance companies. Yeah, it is.

Yeah, that is bonkers. But I mean, that is jobs, right? But I, I— could AI do that?

Uh, AI is doing some of that for us right now, so we're morphing a lot of those jobs to AI. Uh, but instead of like getting rid of jobs, what ideally you direct those people into direct patient care jobs.

Yes. Is that the future of healthcare as well, right? Like doctors fully going empathy mode and the technical stuff is solved by an AI that's 100x more powerful and smarter than them?

It's happening as we speak right now. Yeah, very definitely. AI scribes that can capture the whole conversation, that can help with scripts, decision support. You know, looking up dosages for you on the fly. So yeah, I think that's the evolution. I don't think our current population is going to accept an AI doctor, not yet. I think that's coming. But I think, you know, allowing clinicians to spend hands-on, face-to-face, empathetic care with the patients, I think AI is going to allow us to do a lot of that down the road.

Yeah, and you've seen it firsthand, right? Like, a lot of human healing is, is mental, right? Like the demons you have in your head. And if you have like someone that can be there for you, listen to you, uh, through the pain, right? And accompany you through that healing journey, it's, it's— the healing, uh, happens faster.

Most of what we dispense is reassurance and, and, uh, safety, right?

Safety as well. Yeah, for sure. And it's super complex medicine. It's, I don't know, 10, 15, 20 years that we have robots that can analyze what's happening around them and react quickly, right? Uh, how much nurses do you employ, by curiosity?

So we don't have any nurses at all. We use medical assistants and then what we call urgent care techs. So we raise medical assistants and then we train them. We get them an x-ray license through a partnership with a community college. We train them in IV starts, phlebotomy, injections, lab work, casting, splinting, sterile procedures. Our urgent care techs do most— more than most nurses do.

Interesting. Uh, hmm. Uh, so, okay, is that like simpler and less costly and more efficient for you?

Uh, yep, absolutely. We can pay less. We allow people to grow. Uh, we allow people to raise their career without going to school and spending, you know, $100,000 in loans to get their nursing degree. So there's a place for nurses, absolutely. I think that's more in inpatient medicine now. I think outpatient medicine could be done in general much more efficiently, much more cost-effective by not using nurses in outpatient medicine.

Interesting. Yeah, I guess nurses more like ICU stuff, right? Like constant monitoring as well. Does that make sense?

Yeah, mid-surg, ICU, all those jobs. Cardiology in some cases where there needs to be assessment.

Um, got it.

They have a place, but they're also really, really expensive now.

And how many doctors right now?

We have about— I think we're 5 or 6 doctors, and the balance are nurse practitioners and PAs. So we're We're somewhere in the neighborhood of a little under 30 providers total.

Wow, 5 doctors out of 250 employees?

Yeah, correct.

Man, that's crazy. I love the model because it's hard to get a doctor in that region, right?

It's like, uh, um, it is and it is not. I mean, we're— the reimbursement in Southern Oregon is really poor. So Medicare is not the same across the country. States that have better representation have sometimes 2 to 3 times what we get as far as reimbursement. So that's definitely a challenge. Uh, our beauty here— so Southwest Oregon— now, where are you from, Charles?

Montreal, Canada, and Oaxaca, Mexico.

Okay, okay, good. Split time. Both, both cool areas. If you've never been to Southwest Oregon, we have this amazing natural beauty. And so for young providers that love to hike and ski and fish and river raft, that's what we can offer. And so we've been fairly successful recruiting providers Uh, to our natural beauty. Some of the problem is though, a lot of them are— when they get ready to have families, they don't have their support system here. They moved out here for adventure, now they've got to go back home, you know, where they have a support system for a family.

And if I get injured in Medford, like, what are my options? Because you're not the only one around, right? So how do you split that business?

Yeah, so we have a couple hospitals in our region, and they both run urgent cares, uh, which are Similar to ours, similar capabilities. They're there. They do— at least one of them incur a facility fee as well, so it's quite a bit more expensive. Primary care in our region is stretched, so the primary care providers are just not available. You just— for urgent care things, you call and you get a 6-week appointment. It's not going to work for a sore throat or a possible broken ankle. So we also have a chain in our area that's owned by private equity. Private equity has gotten really invested in urgent care. So some of us argue to a negative outcome, but we do have a company called BestMed that has a chain of urgent— couple urgent cares in our system.

Okay, so if I break an arm, I can go to the hospital and I can wait some more, I can just go to you and it's faster treatment? Is that what you're saying?

Much faster treatment. And unless it's a surgical fracture, if you're gonna be put in a cast, we can manage the whole injury right here.

Okay. Huh. What does that mean?

It means that we would probably put you in a splint.

Yeah.

We'd let the swelling go down. You'd come back in, probably take an X-ray to make sure the fracture hasn't moved, just make sure it's stable. We would put you in a cast, probably leave you in the cast 5 to 6 weeks, take you out, probably X-ray again, do an examination, and get you back to playing or working or whatever you wanna do.

Yeah, I love it. Why is PE getting into healthcare? Is it like stable returns? Is it a stable type of investment? essential to the economy, whatever happens?

I think it's seen, yes, as essential service, that urgent care is not going away. They also watched some really rapid growth that's happened over the last 8 years or so. Urgent care is somewhere in the neighborhood of 7 or 8 years ago numbered about 10,000. Last year we had 15,000 urgent care. So exceptional growth. They're looking at multipliers on their EBITDA. And so urgent care seemed to be a good way to make that happen.

And if I compare it to, I don't know, real estate investment, is it what, like 10% return a year? 5%? Is it, uh, for reasonable risk?

Yeah, it depends on the community, it depends on the state. Uh, you know, some states, the states that have really, really high Medicaid and Medicare reimbursement, people flock to them. Like Miami? No, Florida.

Miami is such a scammy system, right?

I've heard about it.

Like, it's crazy.

There's an urgent care at every street corner. So what's interesting has happened there is because urgent cares have proliferated in those cities and those, those communities, um, private insurance has been able to come in and pick and choose, and they're going to pitch these really low contracts, uh, and somebody is going to take that contract because there's so much competition, uh, in— and so they're subsidizing private insurance with Medicare. We're just the reverse. Our Medicare is really low, so we don't have a lot of urgent cares, so our commercial rates are high, and so we subsidize Medicare with the commercial rates. It's really interesting how it came about.

So are your clients wealthier?

Well, we do have a lot of wealthy people in Southern Oregon. The problem for us— I'm not saying it's a problem, but the reimbursement challenge is most of our affluent population in Southwest Oregon are retirees, and so they all have Medicare. So they're at kind of the low end of the reimbursement, even though it's a pretty affluent group.

What do you do when a client incurs a lot of costs and can't pay you? Let's say that, I don't know, they're in a coma. It's like, uh, then I don't know, coma in the States is like Like, what, $10K a day?

Oh, probably, yeah. We don't, because we don't have inpatient stuff, you know, our bills are not— our average bill is like $250. So people generally don't incur these massive bills. And we work with people on, you know, payment plans, and we have a discount plan. We ask you if they'd like to join our membership program, because then we can make it really affordable. So I— we know healthcare is expensive, our patients know it's expensive, we just offer them options. So that, you know, they may, may not have $300 in their pocket today, but maybe they could pay us over 3 months.

So it's a fun day-to-day job to heal people, right, and treat them. It's very human, it's very valuable. Uh, what's been not so nice about your job?

Uh, dealing with insurance companies, hands down, hands down. Making up as they go along, figuring out, you know, we just found out— I'm going to say this on the air, and it may not like me, but just, we just figured out Aetna's downcoding us on 20% of their business. visits, and they're saying it's because our visit notes don't support the visit. They don't have our notes. They're making it up. So those sort of things really, you know, make it challenging. You can have a really fun day, like you said, taking care of patients is a lot of fun. Then you have to deal with this insurance company who is not aligned with the mission they say they are of taking care of their members. Do you—

I mean, I'm an extreme capitalist, I would say. Do you believe in a full private health system? Why don't people fully own their health? Wouldn't that bring the cost of health to very reasonable dollars right now? Don't you feel that the public system is introducing unwanted tension and actually makes things worse?

I, I— yes, I could argue that very strongly. I could also argue what I've learned is that people do not purchase insurance or health insurance unless they plan to use it, and especially now because it's so expensive. If you could bring the insurance down where I'm paying $20 a month like my Netflix subscription. Yeah, people are going to do that and it's going to be affordable. When you're looking at, like, plans that have changed now costing $1,000 or more a month, what happens is if people have choice, they're not going to use those systems, they're not going to sign up, which somebody's going to pay for that and it's going to come out of our pockets and tax dollars in some way.

Yes.

So it's kind of human, you know, uh, it's just the way our minds work. We're gonna, we're gonna pay for something we intend to use. We're not gonna pay something we're not intending to use. Nobody thinks you're going to get hurt. Nobody thinks you drive by a hospital, right? You don't even want to look over there. I don't want to pay. Or mortuary, it's like, I don't know, that doesn't exist. I'm not going to need that for a long time. So, and of course, things do happen. There's been a hospital, somebody's got to pay that. And then, so yeah, I, I could argue very strongly if you had a pure private market, and that was our idea with our My Urgent Care 365, is bypassing this whole insurance Patients pay us a small monthly fee. If they get hurt, we take care of them. And that's been positive. I think we're probably going to sell a lot more memberships with the current climate.

Yeah, I love that. There's also, you know, sites like GoFundMe. I'm not saying that these sites are like fully fair, but if something really bad happens to you, you can just go to the community. I think that's beautiful. And it's like, hey, I have cancer, I have $100K, multi-hundred K deals to pay, like, can you help me, right? I think What do you think about these systems?

I think they are, but they tend to be kind of a popularity contest. You know, if you were super popular and well-known and, you know, like you, you're doing these podcasts all day long, you'd probably have great success, you know, getting a GoFundMe to take care of people that are kind of underneath the radar, you know, may not have those resources.

Yeah, or violin concepts, like telling a story and exaggerating it just to get more. But yeah, no, I mean, it's fascinating, uh, what you do, what you've built. So what are the, the top goals for this year after 25-plus here in the game? Like, what lights you up nowadays?

Yeah, so we're expanding our occupational health greatly. We're starting a high-complexity lab, which is really cool. One of the things that COVID did was make PCR testing, genetic testing, very much available to, you know, everybody— well, most everybody. And so instead of sending cultures out for urine samples and wound samples, we're going to be able to tell in an hour, hour and a half exactly what the bug is. And that's exactly what kills it. So getting people on the right antibiotics day 1 instead of day 5 is gonna save countless infections, countless hospitalizations, and probably countless deaths as well. So super excited about having this capability in our hands right now.

I love that. Where can people find out more about you, Brent?

Probably go to our website. They can hook you up with me. Our website is www.valley-ic.com.

That was Brent and Charles for another