We recently caught up with Nate Murray, one of the three co-founders at Crossover Health, alongside Scott Shreeve, MD and Rich Patragnoni, MD. Unlike Scott and Rich, Nate is not an MD, but he knows more about the business and experience of healthcare than just about any physician. In this, the first of two posts, Nate describes his journey to Crossover and how he sees its core values driving its future.
I heard you single-handedly won the state basketball championship for your high school team? Is this true?
There’s an article in the Contra Costa Times that ran right after we won the state championship. Literally, the opening line of it said, “Nate Murray will spend the rest of his life trying to convince people he played on a state championship basketball team. The program lists him at 5 foot 10, but you can’t believe everything you read. So there he was, with the ball in his hands and his toes on the free-throw line, with a precious few seconds left on the clock and the Coliseum Arena crowd hanging on his every move. Would Murray gag? The answer came in a whisper: swish, swish, swish, swish.”
And here I am, 43 years old, and the story kind of trails me. You know, I was probably the worst starter of the five starters, and not even among the best five on the team, yet I was an integral part of that team. We had a point guard who was awesome—our big man did great—and I was just playing my role when fate put me on the free line in that particular game. What really helped us win, was the preparation by our coaches and the self belief of our entire team. We had been so prepared for that moment as a group, and personally, when you’re a 5’10” guard with marginal athletic ability, the only thing you can control are free throws. I had prepared myself for years, practicing at my church gym or in my backyard, before practice, after practice , to be able to make those free throws when it mattered most. Then, when it was my turn to “toe the line,” I was fortunate enough to sink the shots. There’s a life lesson there.
By the way, I would be happy to spend a few minutes with you breaking down that video. The link is right here and I can…[at this point, we had to regain control of the interview]
What’s your background in healthcare?
Nobody in my family was involved in healthcare before me. Two of my brothers are in real estate. My sister became a physician’s assistant after I got into healthcare, and a brother is going to go to PA school now, so I guess three of us are in it today. Early on, I was in a startup that had nothing to do with healthcare either, but it was great. I loved creating something out of nothing.
Later, I had a friend that worked for Ingenix, which was actually headquartered in Utah at the time. I applied for a position working for Ingenix when it was a $200M company. Now it’s called Optum and it’s probably valued north of $30 billion. I saw in Ingenix this intersection of data and healthcare and it appealed to the altruistic side of me. Helping people, mixed with tech and innovation, seemed so exciting. But I hadn’t worked for a health plan, and was talking about a bunch of stuff I didn’t really understand well, selling to people when I didn’t really know their business. So, after I got my MBA, I decided I had to work for a health plan and try to broaden my skill set in an industry that really intrigued me. I found myself at Cigna for my internship, but since I didn’t want to remain in Connecticut, I later took a position with Pacificare, which was then bought by United. I realized that no innovation was going to be happening in this “wash cycle” of bigger and more bureaucratic acquisitions and mergers.
At the time, my wife was expecting, and had been classified by the insurers as a high-risk pregnancy. She’d get these random calls from the insurance company asking how she was, and she’d be saying, “Who are these people?” In hindsight, I am sure she was classified as a “highly engaged” member because she answered the phone, even though she could not only care less about that interaction, she was highly annoyed by it. On the other hand, she had an amazing OB/GYN physician with whom she was really engaged and had a meaningful relationship. Seeing her leap over the couch when she was eight months pregnant to take a call from her doctor was a “light bulb” moment for me. It was then that I realized that healthcare innovation wasn’t going to come from the health plans, and it wasn’t going to come from the tech companies. It was going to come from innovative providers who had a deep relationship with patients.
How did you get involved with Crossover?
After Pacificare, I was an early employee at another healthcare startup. Remember Health 2.0, when it started? Well, our company, DestinationRx (now ConnectureDRX) was trying to move alongside the early innovators of that emerging “movement.” I attended all of those original sessions and I saw Scott speaking on stage. I thought he was just awesome, the way he weaved presentations together with memes and great stories.
Then, there was a HIMSS conference in 2007 in Orlando that I attended. We were trying to do a deal with Google Health and Missy Krasner to get our tools connected to Google Health through APIs. It was so hard, as things just weren’t scalable. While I was at the Google Health booth, waiting to reconnect with Missy, Scott was standing next to her and we started chatting. It wasn’t too long before we realized that we had both attended Brigham Young University, we lived 10 miles from each other in Southern California, we both loved to surf…and our early friendship began at that conference. If you know Scott, then you know there is something special about that dude, and I thought to myself, I need to stay close to this guy. And, so I did.
So, was Crossover Health originally like most Health 2.0 companies selling direct to consumers?
I’ve been around long enough on the healthcare payment side to know that healthcare is an industry that really destroys the direct to consumer approach. It’s interesting, you watch all these startup companies—the Rock Health companies, the Health 2.0 companies—come out with these beautiful technologies directed right at consumers. But their revenue models are terrible. After realizing that consumers won’t buy their widgets, they try to adapt their strategies to sell to the health plans (“they have all the money”), before trying health systems (“they provide all the care”), and then ultimately falling back to the self-funded employers (“the actually are the ones paying for everything”). This cycling takes precious time and multiple pivots, and meanwhile the effort is draining all the financial, intellectual, and resource willpower of these little digital startups. Then, they go to die a painful or unceremonious death, caused—ironically— by their original direct to consumer business model.
Interestingly enough, Crossover started going down this same path. We were a direct to consumer medical group that was selling our primary care membership to the public. Rich and Scott were our doctors, I was the “business guy,” and we found ourselves on the same death spiral—realizing that DTC was never going to get us there. Fortunately for us, two weeks after we launched, we could see that not taking insurance reimbursement wasn’t going to be a viable business. We were equally determined not to cave into fee-for-service either—we just had to find another way.
So what financial model did you guys ultimately land on?
So how could we do it? Our Chairman at the same, who remains with us to this day, was the CEO of a company called MDVIP that had been very successful in the concierge space. Their business model was to get paid directly by the consumer for a membership fee, and while it worked beautifully for them and their members, it felt more exclusive to the wealthy. With that model, you’d be serving a small population that does have real health issues, but they have the means to directly access the care. We had aspirations to make many aspects of that successful model available to more people—to democratize the experience and care level—and do it so that anyone in America could be part of what we considered the next generation of primary care.
For most of the US, the fallback financial model was just to put your head down and sign a network contract to get paid fee-for-service rates. But we were never going to cave, nor cater, to that approach, so we started looking into how insurance companies make their money. From that study, we could see that all the great care we provided and the costs we were saving did not accrue to us as providers, and did not accrue to the members either. We soon realized that if you do a great job and deliver great care, you’re making the insurance company a lot of money. The healthier their members were, the more they were able to retain those insurance premiums, the less they had to pay out in claims, and the higher margins they achieved. We could see that by having an aggregated “membership” you could take on “risk,”and that was a pretty nifty way to deliver care. We also realized as we went deeper down the rabbit hole that self-insured employers were in effect little insurance companies that did exactly what we wanted to do; they aggregated “members,” they reaped the reward and were motivated to draw healthier—and therefore lower cost—members, and they were interested in new and novel ways to deliver care. And BINGO—we were onto something. Working with employers, not as benefits providers, but as actual insurance companies paying for healthcare directly.
Crossover’s lucky strike then, was our first opportunity to directly engage with employers through the RFP process with our first client, which Rich described in detail in his interview. That was our chance to have a clinic model, supported by a financial model, that would result in a great outcome model for all participants. Just one of the many “lucky” occurrences that came to fruition when we were able to combine preparation with opportunity.
The relationship with Marty Yee, MD was important as well, because he provided the avenue to a large number of employees, and the opportunity through which we could return value to the company that was paying for it. That opportunity presenting itself early on was one of Crossover’s lucky occurrences and pivots.
What was your role at Crossover in those early days and how did it evolve?
Back then, I’d tell people I was the Chief Operating Officer (COO). Literally, someone had to be the CEO (and that of course was Scott), and we were a medical group, so someone had to be the Chief Medical Officer (and that had to be Rich), and well, what other big ‘C’ role was there—that was the COO. “Okay, Nate, you’re the COO of a 3-person company.”
Never mind the titles, though. We all did everything together—all the sales, all the financials, all the things we needed to do to survive. Scott and Rich of course managed the medical side, and a lot of the basic operational tasks were mine, but both Scott, as well as Rich, were chipping in on all the tasks as well. My primary thing in those early days was leading the revenue growth of the company.
I was also actively involved in all non-clinical operational roles, and the biggest thing I did was manage the budgets, so some people in the early days considered me to be the Chief Financial Officer (which in retrospect is a bit scary to consider). Most of my time, though, was spent trying to get new clients, and then managing those clients from a professional basis to further grow and expand the accounts once we landed them. I’ve always enjoyed this aspect of our work and have continued to gravitate toward specialization in this area of account, client, and new opportunity management. Today, I remain our Chief Revenue Officer directly responsible for Business Development where we are developing innovative market initiatives, New Sales where we go after new clients, and Account Management where we focus on serving our current clients.
How would you describe Crossover’s core values?
I think in a lot of ways our values, which we developed early on, still hold true even a decade into the company’s growth. What is actually really amazing to me, is that the things we used to talk about when we had no work, no clients, and just ideas, are still resonating and ringing true to this day. I believe our core values will be the same a decade from now as well. I will run through them with you now:
- Be fearless: I always talk about “be fearless” rather than “be reckless.” I talked about that in the presentation I gave to business students at Utah State University back in February. Being fearless to me means pursuing the right thing. Two things I talk about in my leadership are, 1) use good judgement and, 2) do the right thing. I say that to my team all the time. The situation may be complex, it may be hard, and it may not always be clear how to achieve the best outcome in the face of adversity. If we hadn’t been fearless in our early days, there’s no way we would be where we are.
- Design everything: That’s still how we do things. If we hadn’t designed everything we wouldn’t be here either. If you aren’t obsessing over the details, then the gravity of the system will pull you back to mediocrity. And we still fight against that all the time, now that we’re a bigger company. We have to fight against things just happening to us, rather than taking an active role in creating what we want. That will always be a struggle and a key leadership goal that we focus on.
- Inspire people: This has been, and will continue to be, one of the biggest differentiators in our success. This work is hard, and we want to inspire our employees (and our members) to take charge, to make change, and to always be part of the solution. “No broken windows” means something to us—we don’t just get used to crappy stuff, we stop, change it, and then move on with our work. I know, someone coming in for a knee replacement is more necessary than inspired. But in primary care, and especially in the work we do, the desire and ability to inspire people to make behavioral changes is critical if we want to reach our goal of helping each member achieve their best health.
- Be Authentic: One of the dilemmas I see with professionals is that they often are amidst some type of identity crisis. They aspire to specific roles, and in doing so, often try to be someone else to fit the mold. Sometimes that works for a while, but no one wants to work so hard to be someone else. We hired YOU, and the more you try to be some other person, the less of your authentic self you will have to offer. I don’t need that, I didn’t ask for that, and frankly, I don’t want that other person—instead, I want the very best of each of you. You know, I have twins but they’re totally unique. Sometimes they get into situations where they’re compared—school, friends, sports, or church. And we say to them, “We don’t want two Ethans, we have one already. We don’t want two Reeds, we already have one of those, too. We want each of you, so don’t try to be each other.” I see this same situation at work many times as well. If people really understand what their strengths are, if they are comfortable with their own “work in progress,” if they choose to magnify those talents unique to them, then they have an opportunity to be authentic, to be impactful, to be happy, and to be successful at our company.
- Staying curious: Success at Crossover requires that you have a voracious appetite for learning. As a founder, one of my biggest fears has been that our teams will lose that curiosity and won’t continue to push themselves to innovate. And that’s a very real problem that companies far larger and far more successful have really wrestled with as they have grown. When you get bigger, you have to modify how you work because what was effective at one stage may not be effective at another. Leaders need to adapt, improvise, and overcome at each stage of growth to remain relevant. With larger numbers of people come more friction points, which require operations and procedures in place that helps us continue to communicate effectively. The challenge with growth is to embrace it, and feed it, while still remaining agile, flexible, and creative in the approach. To stay hungry, to stay foolish. We have so many awesome examples of this energy and passion right here at Crossover—people have really stayed engaged, have kept growing within the company, risen to new roles and responsibilities, and continue to excel. A common ingredient in all of these individuals is that they have stayed curious in their disciplines, as well as in their careers, and they are key catalysts to continue driving the company forward. I look forward to always encouraging this value as we continue on our journey.
In Part 2, Nate talks about Crossover’s pivot to digital and the role of the pandemic in supercharging the big “switch”