As one of the first seven board members at MNsure, Thompson Aderinkomi had a bird’s-eye view of early struggles at the state’s health insurance exchange. After his term ended in May, Aderinkomi focused his energy on Retrace Health, his Minneapolis-based start-up that provides primary care via house calls and online video visits. In January, the company closed a $1 million early-stage investment round with Eagan-based Blue Cross and Blue Shield of Minnesota, St. Paul-based HealthEast and McKesson Ventures, which is based in San Francisco.

Q: Do you think there’s something wrong with health care?

A: The problem with health care today is the price. There’s no price for health care. Nobody knows what it should cost. … Because no one knows what the price is, you get really horrible service. The value you get when you go to a clinic — it’s not worth what someone else is paying for it.

 

Q: How does the lack of price information lead to a lack of value?

A: There’s a guaranteed payment [for medical providers]. You get in a network with a health insurance company, there are negotiated rates, and no matter what you do — whether it’s good service or bad service, whether it’s convenient or inconvenient, efficient or inefficient — you get paid. …

If you could set up a business and it didn’t matter how you operated — you would get paid — that would be a gold mine, and that’s essentially what’s happening right now in health care. So, because of that, consumers are not getting as much value as they could … and they’re indirectly overpaying for it through their health insurance.

 

Q: I’ve heard Retrace Health described as “direct primary care.” What is that, and how are prices different?

A: I would define direct primary care as a relationship between a patient and a medical provider — usually primary care provider — where the patient is paying … a monthly membership fee, for essentially unlimited access to that provider and the services they provide.

That is the way we started, and that was the original vision — to be exclusively direct primary care.

 

Q: Retrace Health is now an in-network provider for some health insurers. Why did you decide to start taking insurance payments as an alternate form of reimbursement?

A: When you have a high deductible, and you have a high premium, you don’t have anything left to pay for health care. So, we realized that we have to get in-network to help these people.

 

Q: Did the idea for the company come from personal experience?

A: My son was about 1 year old. It was the winter of 2011, and he came down with a very aggressive cough and fever. As good health care consumers, we called the nurse line and we were told to go to the clinic, at which point they promptly sent us home only after wasting two hours. …

Finally, a fourth visit resulted in him being diagnosed with pneumonia and being prescribed an antibiotic. The entire episode cost $664.28. At the time my family had a $7,000 deductible, so we were on the hook for all of that. My wife and I were like: “We did not get $664.28 of value.”

 

Q: Nurse practitioners provide care at Retrace Health. Do most patients receive it by video or house calls?

A: It’s a mixture between the two. It’s a medical decision that the medical provider makes, whether or not the care can be adequately provided via online video or in the home.

 

Q: You launched the current version of Retrace Health at roughly the time you started on the MNsure board in 2013. How did you handle the two?

A: In the beginning, we were maybe seeing one patient per week. MNsure was my job. The company really didn’t start taking off in terms of patient volume until just this last fall.

 

Q: You served two years on the MNsure board. What did you learn?

A: Health insurance reform is not going to be achieved through an exchange. The way that most people pay for health care is through the insurance premium, and I don’t think exchanges will actually cause reductions in premiums.

If the goal is to reduce how much we’re spending on health care — because it’s consuming a disproportionate share of our economy and our discretionary income — I do not believe exchanges will do that.

 

Q: What’s needed for reform?

A: We need two key things to happen: first, all health care prices should be transparent and easily accessible; second, we must stop paying for medical care by line item, and start paying for outcomes and value. What this looks like is employers, insurers and consumers need to start paying for medical services as clearly priced bundles, or in membership format, where the provider bears risk and stands to gain from saving people money.

 

Q: Are the exchanges a bad idea?

A: I think the exchanges are an excellent idea because everyone is mandated to buy health insurance. … The exchange elevates insurance so that everyone has a central place to start looking for it.