Rich Palarea CEO of Kermit, a Baltimore-based healthcare cost reduction and spend management company that brings automation and insight to the high-spend category of implantable medical devices within hospitals and health systems. Chris and Rich discuss the current problems with the model and bring solutions to the table to make a more transparent and fair priced solution.
LISTEN: Apple Podcasts | Spotify | Amazon Podcasts | Website
Chris Habig: Hi everybody. Welcome to Healthcare Americana.
I am your host Christopher Habig, the CEO and co-founder of Freedom Health Works. This is a podcast for the 99% of people who get care in America. We talk to innovative clinicians, policymakers, patients, caregivers, executives and advocates who are fed up with the status quo and have a desire to change it.
We take you behind the scenes with people across America. That are putting patients first and restoring trust in American healthcare. Today's episode, we are talking with Richard Palarea, CEO of Kermit. And what Kermit does, which is really exciting and why we're having this conversation, is looking at what I consider to be a very broken billing system within hospitals and even more.
And revolutionizing that, updating it, and Rich, I would say, making it easier. So Rich, welcome to healthcare, Americana. It's a pleasure to have you. Thanks for joining us.
Rich Palarea: Yeah, Chris, it's my pleasure. Thanks for having me on.
Chris: Now. You know, swat me down if I lied there. But it sounds like Kermit is involved in making things easier on both sides of a healthcare transaction.
Rich: Yeah, and I'm going to go ahead and get the question out of the way that you probably will ask in the next few minutes is, where did the name come from? When you say we're making it easier, that's exactly the genesis of the culture here. This is a category we're talking about implantable medical devices in hospitals and health systems, that most supply chain leaders inside of a health system don't want to deal with.
Nobody wants to go tell a surgeon, you can't use this stuff because it's too expensive. So, these are questions and conversations, frankly, that they will avoid. These folks are embattled because they have CEOs and CFOs of health systems operating on a razor thin margin. Most of these hospitals today, dare I say it, are probably even losing money right now.
They're in a really tough place, and so they've got the financial pressure on them, and they've got the surgeon on the other side, who is basically using these items in an operating room. There's no price tag on the box, so they don't really understand the implications financially of what's going into a patient.
And then somebody else has to pay for that. That's the hospital. And eventually some of your audience. People who are on the benefit side, who might be in charge of the third-party payers, insurers. So, it's a really convoluted process that maybe only America could have come up with or the capitalistic way that we have done this.
But it needs to be changed and that's basically what Kermit is doing. And we can get into that a little bit too.
Chris: Yeah, please. Let's go there. So, you mentioned implantable medical devices, so we were talking surgeries, things actually go and stay inside of a human being. So how does your process come in at point?
Rich: Well, one thing that's really interesting to understand, and I didn't know this before I started this company, I grew up in a healthcare family. My father was a physician. He was a cardiologist in Long Beach, California. But the closest I ever got to any of this was when I was a kid. He'd take me with him on rounds to the hospital on a Sunday morning and stick me in the doctor's lounge with a box of donuts and cartoons, and if he came back and I wasn't kidnapped, we'd go home.
So that was about as close as I ever got to this problem. Fast forward to about 10 years ago. I was running another business that was doing cost reduction and spend management in supply chain. And the model that I used was I would negotiate contracts for my customers, and then I would only take a portion of what I saved them.
So, it was a pretty easy thing for them to say yes to. It was no risk for them. And two medical device reps were introduced to me through a mutual acquaintance that we knew who came in and told me this fantastic tale about how they stand in the operating room with a surgeon during surgery. They're not providing patient care.
They're merely selling devices. They're tendering items into the sterile field. As the surgeon requests them for, say, a knee surgery or a hip surgery, something like that. And again, no price tag on the box. Surgeon is not really concerned with the cost. They want the best outcome for the patient. And as these things come out of the box and go into the patient, that salesperson is standing there with a piece of paper and a pen, literally writing down the price for everything that they've sold for the day.
When the surgery is done, they turn around and get a signature from the nurse and then they walk that piece of paper down the hallway to purchasing where they turn it in and expect to receive a purchase order, i.e., payment basically, for everything they've sold. And you have a buyer on the other end of this who's a hospital staff person on the administrative side.
They don't have any clinical understanding of why the surgeon used what he or she did. They're spot checking this piece of paper at best for anomalies. And so, if something doesn't look correct, they might make a note and go look something up. But nobody's checking to make sure the price is accurate or was something wasted?
Why did we have two of the same implants? One of them couldn't have gone into the body. It's anatomically impossible. So, what happened there? They're not checking for any of that.
Chris: It's almost like the spell check only. Not looking for grammar, just looking for spell check here.
Rich: Can I use that? That's fantastic. I'm always looking for a really good analogy, but yes, it's a price audit and contract compliance, and that's the bigger problem here is we've built automation in the United States to check prices, but this is an inventory category that is not purchased and then put on a shelf, so you can't really manage it with ones and zeros.
What you have is this, kind of interesting play where a human being who's a salesperson, controls the inventory. They bring it just in time for the surgery. The surgeon doesn't really know what they're going to need. They might get into the patient and see that the patient has osteoporosis, soft bone, and they need a longer style implant or a different style implant.
They rely on that salesperson to bail them out in that case. So that salesperson has to be ready with lots of different trays, full of sterilized equipment ready to go at a moment's notice, and that's why they get paid what they get paid. They're there to be a confidant and a supporter to the surgeon.
Make no mistake, just like every good salesperson, a lot of steak dinners, a lot of red wine, a lot of playing golf. Like, there's a lot of influence going on and in the United States now, and the wisdom of the government, I use that term loosely. One of the good things that they've done is they're requiring these implant companies to disclose any amount of money that they're paying these surgeons for anything.
So, inventions, royalties, speaking fees, consulting fees. So, if you have a favorite surgeon, you can go to the Medicare website for open payments and you can search their name and see how much money they're getting from that side of the business. Not all of it's bad. There's definitely a lot of influence going on though, and I'll just kind of leave it at that.
So, 21 different implantable categories of medical devices. Most of them, the big spend categories are going to be hip and knee, spine, cardiovascular in most hospitals. But we also do really complex things like trauma, biologics, breast implants. There's, like I said, 21 different categories and two things we're doing, we're helping the hospital understand what the market or the street price ought to be.
They don't really have anything to compare it to. We've done thousands of negotiations over a period of 10 years, so we know what the price is at any given time, we'll get paid a portion of the savings that we drive. If they allow us to do the request for proposal, the bid, and getting the contracts where they ought to be, we'll take a portion out of savings.
The other thing that we do is we digitize that terrible paper workflow that's going on, and we're doing that through a piece of software. We give a mobile app to the sales rep for the company. They document everything that goes into the patient based on our mobile app, and they submit that. We then go look up the prices automatically in real time in the cloud.
We look to see, were there two femoral components implanted on one total knee, that's not possible. Something must have been wasted. We go clear all that up and in real time tell the hospital what's okay to pay and what isn't. So, we're doing cost reduction on the front end. Typically, 30% of what a hospital spends in a category, which can be $50-$60 million on knees and hips, it's a sizeable amount.
And then on the back end, we call it spend management. It's just making sure that they hang onto those hard-fought discounts. Those don't just mysteriously evaporate. Because there's a human being on the other side that's managing the billing with countermeasures to get their margin to come back up. And so that's basically the service we're providing.
Chris: That's fantastic and thank you for the deep dive into that. You mentioned a ton of topics where I'm like sitting like, oh, that'd be fun. I'm going to go talk about that. Talk about that. Talk about that. The last thing you mentioned now, as far as saving the hospital's money, who makes the decision to use your app?
Because in my mind, I'm thinking, well, if I'm that salesperson, I want to be accurate, but this is going to limit my ability to maybe put another X on the list here and you know, maybe cut down on my comp because it's going to be so accurate. Is there any type of tug-war in implementing that system?
Rich: Yeah, Chris, that's really astute. So, there can be, I might have painted maybe an unfair picture of kind of what's going on with the salesperson. Let me just go back and say it this way. Most of the salespeople who are employed by the big companies, the big implant companies are doing a fantastic job. They're not purposely ripping off the hospital.
Although, I will tell you, when my partners came in and we started this business together, they told me some pretty wild stuff. That'd be a topic for another show for sure, because we can get into it. It's fascinating about what goes on, but it's a minority of people. And I will say it this way too.
The person who is not doing anything untoward would probably rather not, like every good salesperson doesn't like to do paperwork. They love to sell. They love to manage relationships. So, if you can take that away from somebody, they're happy to let you do it. And what they're finding is those people are getting paid, right?
They're getting a purchase order on the day of surgery. That is unheard of in our hospitals in the United States, most of them are turning this paper in, sometimes the day of surgery, sometimes a little bit after, but typically it's taken them upwards of a week to get that purchase order. I heard in one of our hospitals a very large hospital in the US a brand that most people would know.
It can take three weeks to receive the billing information from surgery and it would take them another three weeks for them to issue the purchase order. So that's six weeks waiting for cash to turn for that salesperson. To them, that's as good as a commission check. I think what I'm getting at is they're willing to take the tradeoff of the margin hit they might take, which they shouldn't be taking anyway because that's, we're saying we're going to pay the real price.
This is what you're really owed in exchange for getting paid quickly and, all the headache and hassle of paperwork goes away. So, they are an interested party. They're not a party to our transaction, only because we don't charge them for the use of the app. We're kind of harnessing the fact that they're interested and they're standing there at the point of use, and they can document everything for us.
And their interest is that quid pro quo. They're going to get paid quickly.
Chris: It makes ton of sense. It's expediting the payment process for accuracy. So, yeah, and I didn't mean to paint a bad picture on there, but that just popped in my head. You know, is there a conflict here between incentives and I'm a big incentive person and I find them fascinating because they can steer behavior that you never even thought about.
Like, why would this person do that? Oh wow. That incentive actually aligns with where this person went right there. So just to clear it up, just so I'm clear, Rich, sometimes it takes me a while to get these things. So, your customer is who in that relationship?
Rich: It's the hospital. We only serve hospitals. We don't serve payers. Although you can imagine payers would love to get their hands on this information. Why are we getting a bill as a payer for $30,000 on hip surgery when the implants, which represent most of the cost, were about $6,000. Like where is the markup on that?
But it's only the hospital. And then you asked a question before kind of who is the decision maker who uses this? In a hospital, typically I will lead with the financial incentive. There's a lot of money that we can return to the bottom line. For a hospital that's only managing right now, a percentage point, a point and a half of margin.
A lot of them are losing money and they're losing a lot of money. Right now, The CARES Act money has dried up and the boards of directors are all saying, how are we going to make this back? We shut down our operating rooms, our top line revenue for the last two years has not been there. How are we going to make it back?
So, this is a pretty hot service right now. We can go in and find lots of savings. So typically, a CFO likes to hear the story. Then they'll kind of rebut to me. I love this. I love, there's no risk. I love that you guys are experts. You were the implant guys, and so you know what's going on down in the operating room.
Go ahead and do this. I'm going to connect you with our VP of supply chain, for example, and I'll tell that CFO, are you really excited about doing this? Yes. You want the money today, right? Yes. I'd love to have it back right now. Then do me a favor, come with me to that next meeting, sponsor that meeting, be the executive sponsor, and tell supply chain it's okay to use a third party.
We're not holding you guys accountable. If they find 10 million on your watch, that's good news for everybody. Let's go after it. And so, we end up working with supply chain. But you talked about incentives. And if you look across healthcare, there's all kinds of strange incentives that don't go the way that most consumers or patients think they should.
And this is one of them. We have lots of things going on here where lots of people are making money on the side or indirectly, or there's other interests or influences that your reaction to this might be, why wouldn't everybody want to do this? This seems like a no brainer.
Chis: I was going to go there, Rich! I really was like, who doesn't want to save the gobs of money that you were just talking about and present accurate pictures to patients, to insurance companies?
I mean, there's very few win-wins in life, but I'm sitting here thinking, who's saying no?
Rich: Right? And so, we can look at that, Chris, you end up just following that trail back and you end up finding there's a rock there that needs to be turned over. And what you end up finding underneath that rock is either process improvement or somebody's being protective of their job, or a lot of times they don't want anybody to find out that they really don't know as much as they should about this category.
And you know what? We've done a disservice to those people in expecting supply chain folks. They're trying to source masks and gowns and gloves during an epidemic, a pandemic, right? They're trying to manage food service, linen, landscape.
And be an expert in X-Ray and MRI technology and also all these implants, it's just not realistic. So, I like the more progressive approach, even the big hospitals who say we've done a great job with cost, but we're the first to say we don't get it. We'll always ask for an expert to come help us and we're not too proud.
Then we have a really nice cultural fit. But for everybody else who sits there with a scowl on their face and crossed arms across a desk, like, you're not going to find millions here because I've cleaned it. I won't try to convince them. I'll just say, that's fine. It's a no for now. Let's move to the next group. Who wants to do this?
Chris: It's that territorialization of it. That, hey, this is mine. Don't you dare come in here. I think there's a lot of insecurities and a lot of people out there in the workforce that says, I'm the expert. If I'm the expert, that means my job is not in jeopardy. And I have the opposite outlook that if you can't teach somebody or be better like you're talking about, you're of no value to an organization whatsoever.
We're talking with Richard Palarea CEO of Kermit. Richard, you mentioned earlier in your conversation that you use a just in time model. Looking at a lot of supply chain issues. I mean, Costco has empty shelves for God's sake. Looking at a lot of different supply chains across multiple industries, it seems a lot of people fall or been having trouble with just in time inventory, supply chain management.
Have you guys seen any impact on little interruptions becoming ripples in the broader market for medical devices?
Rich: Yeah, I think not just medical devices, but almost everything that's being used inside of a hospital and what are the things that I think, you know, if you or your listeners I know I was at the time of the pandemic when it was really at its height consuming a lot of information through media, but what's really going on down on the ground?
And you started to hear this theme about how we have built a reliance on foreign supply chains, especially things from Asian markets. And so, I think now the average person has kind of become aware of is what hospitals always. There was a big risk that when you look across the spectrum of everything being purchased, a lot of the disposable things, for example, there are only a few suppliers.
I think the statistic is something like for latex and non-rubber gloves that are being used for exam and that kind of stuff. There are only one or two manufacturers in the whole world that have all the business for that, and so it doesn't take much for those factories to shut down. Something like a pandemic will do it.
I just got back from a conference that is the flagship conference in the United States for healthcare supply chain professionals, and the theme I heard across three days of different presentations was the just in time supply chain that was really in vogue. During all the Lean era and all of that stuff is a huge risk for us, and we can no longer do things that way.
We have to have a smart supply chain that manages a mix of all of these different strategies, and you have to be able to have things on the shelf, or at least near access for different supply where you're not waiting for it to arrive on a ship that's then stuck at sea because it can't unload the port because there's not enough trucks to move the stuff or whatever it is.
The supply chain seems very robust. When you stand back and look at it, it's very weak. There are lots of places along the place where it just takes one link to break, and nobody gets what they want. I.e., babies aren't getting formula, you know?
So, who would've thought in America, where we are now, we'd be talking about these kinds of things, but they're very real. And I think there has to be a lot of resiliency in planning that goes into everybody's planning and thought around this, but for sure hospital supply chain and they're all kind of waking up to that.
That was a big theme at the conference. This idea of resiliency.
Chris: Now I'm curious because you used an example before about, a surgeon gets in there that had a patient with osteoporosis. Now they need something, maybe that thing's not in stock anymore or on back order. How do the people on the ground react to that?
How do they handle those different types of situations?
Rich: So, this category really, if this is what makes it so interesting, and also why it's defied true cost reduction and spend management for almost 50 years. Hospitals are relying upon this professional, this salesperson, to ensure that the whole supplier network, to be honest, arrives on time.
It's not really the hospital's responsibility because they can't really stock this stuff. There's not a place to store seven different styles of hip implants just in case Miss Sally Jones has osteoporosis. So, we take films, we decide as a physician or a surgeon, we're going to need a hip replacement.
We do some templating. We send that information out to the vendor. They get that information and prepare for the surgery, and they might pick this particular size because it's the surgeon's preference. And then they might pick a size to the left and to the right and be ready for almost every eventuality. That's where these guys earn their keep.
That's their big bucks. So, this one category is very different than any other, but because it is managed by a person, it also has this weird thing where, if a person decides they want to bring something new into the operating room today and hasn't been approved, it got hammered out on a golf course somewhere during a conversation.
The surgeon says, sure, I'd like to try that. It sounds really interesting. But the surgeon is not thinking about all the other things that go on inside the health system, like value analysis committee and pricing, and we have to look at the 510Ks. They've been cleared by the FDA or not. Are there any recalls on the item?
There's a lot of other implications that supply chain is really worried about. They don't like when these types of conversations happen outside of their earshot. They want to be part of it. And it's only been recently that supply chain has kind of clawed its way from the basement as a blue-collar job next to the warehouse, to a white collar, templating and planning and financial management and true supply chain, true logistics planning piece of this.
And I think the pandemic has really put a spotlight on that. About how important these people are, not just to the hospital, but you said it too Chris in supermarkets, in just basic places like Home Depot. I mean we can't even find basic things like baby formula. Like what are we doing there is something we have to do to change that.
Chris: I find it fascinating, Rich, and any of our listeners are going to be sitting here cracking up, because I get charged up about these types of conversations, like analyzing what didn't work, looking forward, what's going to work in the future, how does this apply to people's daily lives? Why should they care?
And, you know, to listen to you obviously very well knowledged in that and how it impacts from the high level to the low level. So, kudos to you on that one, and I'd expect nothing less from you at all. I used to work at the DePuy Orthopedics as a college kid, as an intern. And I was always fascinated, I was a financial analyst in Warsaw, Indiana.
Beautiful Warsaw. And it was amazing. And that was always one of the questions I've had. So, you answered like a 15-year lingering question for me that why do we, why am I looking at all these checks cut to different surgeons out here? And I never really put two and two together. Shame on me.
That makes a ton of sense. And it's interesting because I grew up with physicians as parents too, and I grew up at my dad's office. I tell the story a lot, you know, whenever I have to get front of an audience of why we started a drug primary care network in the first place. And I remember going to like Colts games and Pacers games here in Indianapolis and mom and dad would go to halftime and hear a little speech from a drug company or whatever it was, and we'd bring the family.
Now you can't as so much as leave a pen behind. I talked to a major pharmaceutical company here in Indianapolis. You can probably guess which one it was. And they go, artificial stance is that hospitals should separate out primary care from their main business core. And I'm thinking, well I wonder why because your reps are getting frozen out of offices.
So, to get where I'm going here with this one, it seems ludicrous to me having watched how much primary care has been beaten up by regulations and by the government. For little things like you know, tickets and for the family and pens thinking that's going to influence medical decisions, doctor owned hospitals.
That's one big thing. But then again, now we have brand new implants being brought into the OR based off of a golf game, and that's a generalization. I totally understand that. It just seems like the left hand is not talking to the right-hand and. I am just having trouble making sense of it.
Rich: You just touched on 15 things that I would love to ask you about. So, when you think about why is there not a greater level of collaboration if, for example, somebody as simple as just a salesperson for the implant company can have one dialogue with a surgeon? A separate dialogue after they leave the operating room where they turn in a piece of paper to purchasing, and oh, by the way, that's not the last time they visit that office.
They're going to be in there all week as they turn in new surgeries, asking why to have I not got a purchase order for what happened last week? Funny story, Chris our first customer that we ever implemented on the Kermit software, I went out, this is when I was kind of, my partners and I were wearing every hat in the business.
We were doing all of the work, and I went out to do the training and I sat with her at her desk. She was the purchasing person, and there was a beautiful dozen red roses on her desk. And I said, oh, was it your birthday or those from your husband? She said, no, those are from the DePuy rep. And then it hit.
I'm like, now I understand. My guys were trying to explain to me all along how this worked, and I didn't really get it. So, you have that influence and that's why there isn't a level of collaboration. The surgeon is looking for data, and when you come and tell them you're spending too much money on this kind of stuff, all they're hearing is blah, blah, blah, telling me how to practice medicine.
You go run the hospital and I'll take care of the patients. What Kermit is doing is we're saying everybody is an expert in their category. Everybody ought to be honored for the piece they bring. This is a body, like the body can't function if the eyes only see, and the feet don't walk in the direction that the brain needs to go to do the thinking, for the eyes to see and make a decision.
So, it's, everybody plays a role. They're all stakeholders. And what Kermit is doing is we're bringing one pristine set of data captured in the operating room at the point of use, categorized properly. This still tells the surgeon, this was Mrs. Habig's knee, right? And he's like, I remember that. And I remember the rep dropping an implant on the floor and I told him, you're not charging us for that, right?
And he said, don't worry, doc. I got it. And then they pull up the data and they see the name and they remember where they were at that moment. And they say, oh yeah, he got it. He charged me for it. That's how he got it. So now they have visibility. Now they become an interested party. Now they're wondering what else has been going on for a long time.
So that's what we're doing. We're breaking those walls down that are there. The physical walls that separate people from having these conversations. The same thing's happening in supply chain. These vendors will speak a lot of technology to keep supply chain confused. The surgeon needs this. They really need it. This is the best, the latest and greatest, they want to use it. We already have an agreement. Finally, supply chain gives up and says, well, I don't want to upset my surgeons. I guess we have to capitulate. No, you need to collaborate together. You all need to be hearing the same story in real time and the way that you do that is you put the right data in the room so everybody can see it. And there's, there's no mystery about that.
So, for the first time, we're actually bringing together the financial office, the supply chain people and the surgeon to one table. They all have a role in getting the price where it ought to be, but they just don't collaborate effectively because they speak different languages.
So, we're kind of the interpretation layer for all of that.
Chris: You get some surgeons just to pick on them that want to be the rock stars and what the rockstar treatment. I was privy to a conversation recently of how important operating room number one is and how there's always fights around that. I'm thinking, wow, this is a whole new world of human interactions between this.
So, it sounds like you're saying, hey, look, we're going to shine the light everywhere. And not every story needs a villain here. And frankly, it's easier when there's not villains in any story. And we can say, look we all work together. We all do it better because the surgeon wants to make sure that they have all the data and they're taking the best care of their people. I get it.
And finance wants to come in here saying, look, we can have affordable surgeries and actually make a profit on this one. So, moving forward, bringing everybody to the table and shaking hands and saying, hey this is a good thing. This is where we want to go. So, Rich here brings us into our final couple of questions here.
What's next for Kermit? Are you guys exclusively in Maryland? Are you going to blow the lid off this thing? What's next?
Rich: Really Chris, it's been 10 years of just quietly perfecting this. When we started this, there was no foil for us to fence against. It was no competitors. It was totally uncharted territory.
There was no software that existed, so we kind of built it from scratch. And pioneered this whole thing and quietly now manage 40% of the implant spend that transacts in the state of Maryland today, which is a great accomplishment two times in the Inc 5,000 list, including this year and last year.
Great accomplishments, but we need to take this far and wide. Any hospital that wants to do it this way should have an opportunity to disrupt in a good way. Get some savings that are real. They can track not just phantom savings on a piece of paper and then transform the way in which they manage this.
This shouldn't be a headache for everybody, and yet it is. Because its paper based. You can't quantify or report on this data because it just, it's on a piece of paper, it gets dropped into a folder, you know, in a filing cabinet and locked away. And so, we're taking all that transactional data, turning it into analytics and sharing it.
And we want to go national. We want to be able to be the brand that everybody thinks about when they think about how you manage this space. So, the big bluish and right now is this, this area is called the bill only transaction that happens in a surgery or an operating room. Most hospitals will understand bill only to be those categories of implants that we've talked about for your listeners today.
What the opportunity is nobody has defined the category. So, we have lots of different approaches to this, some are consulting based. Some are software only. We are a technology enabled service, so we do both sides of it. We have experts who will interpret those reports so that everybody can understand them because they've either run hospitals or run supply chains or come from the implant world.
So, we like to do that. During Covid we doubled the size of the workforce, didn't let anybody off and actually grew. And now we're looking at taking the national stage and doing this. Now I'll say this about the market we provide services to. For a technology firm in healthcare or even a tech enabled service, it is very difficult to go from year 10 to year 20. Most companies either have failed way before that or they can't figure out how to scale, mainly because there's so much acquisition M&A activity going on that good companies get gobbled up pretty quickly. And so, if you want to survive, you've got to basically find a new home for your baby.
And that usually is going to be inside of a larger organization. That's not lost on us. There are some leaders in this space, in and around us. They're not doing what we do, but they want to get into this space. Who would make great parents. We have a similar culture. They have a desire to change things.
They're committed to it and passionate about like we are. There are others that probably would want to acquire us that not necessarily would want to be there. You know, I've seen some organizations who have really innovative approaches. Just get gobbled up and you never see them again, and those ideas kind of die.
So, if we were to do something like that, we would carefully choose who our parent is. But I think the next chapter for us is getting aligned with a bigger organization that has very large war chest, a similar dedication, similar passion, and wants to keep changing this and empower us to continue to build great software and do the things we're doing and give us just a longer runway to do that.
And that's kind of, I think what comes next for us.
Chris: Now, Rich, last question for you, and just out of pure curiosity, coming from medical family myself, why did you choose to pursue the business of medicine and not the practice of medicine?
Rich: Yeah, I guess much to my mom's dismay, maybe my dad, to a lesser extent, they would've liked to have seen an MD after my name.
But I'll tell you, my dad was a cardiologist. He also did a fair amount of surgery too. And, you know, I played baseball. He coached baseball. He did his best to be there, but frankly, he just wasn't there a lot. He was very dedicated. And you were even talking about, I had a very similar experience to yours.
We would go to, say Puerta Vallarta or Hawaii for the family vacation. And then there was always the two to three hours where dad would disappear. And finally, when I was old enough to understand what was going on, I'd ask him like, where do you go? And he is like, well, how do you think we paid for this vacation?
Right? So, I have to go listen to the pharma pitch. And when I was old enough and actually worked in his office for a little bit, we would close the doors for lunch at noon. So, patients wouldn't come in. Nobody was scheduled from noon to one. We would eat our lunch and he'd be in his office maybe dictating or doing some chart work.
I'd be up front doing some patient billing and whatnot. There inevitably would be a knock at the door and it was the Pfizer rep who knew that was the time to get Doc because no patients were in there. And I think about that the passion really is to ensure that we're just bringing a lot of visibility to this category and other categories.
And people are asking the questions they've always been afraid to ask, and we're not afraid to answer them because it has to change. It's not sustainable doing it the way we're doing it. Medicare reimbursement is falling. Surgeon pay for the most part is flat, which is why you have a lot of these guys going out and starting their own hospitals where they can control what they make.
And we still have implant companies making money. So, we just want to right size that mainly for the mission that you and I care about, which is as patients and consumers, we want to pay a fair rate. It doesn't make sense that we pay such inflated cost for procedures in America when Canada and the EU and other places they have full transparency on pricing like this.
Chris: Richard Palarea, CEO of Kermit. Rich, thanks for joining us here on Healthcare Americana. I really enjoyed that conversation and your insight, so I appreciate you very much.
Rich: I did too, Chris. It's been great to be here with you.
Chris: That's going to do it for this episode of Healthcare Americana. If you haven't yet, be sure to subscribe to this show on your favorite podcast platform.
Check us out online healthcareamericana.com to catch previous episodes. Subscribe to our mailing list and visit our fantastic online store. Once again, I am your host, Christopher Habig. Thank you for listening.
11350 McCormick Road,
Executive Plaza III Suite 500,
Hunt Valley, Maryland 21031
Join our team!
View our open positions.