INTERVIEW: Fred Melendres, Part 1 – The New GC is an OG

Fred Melendres is a lawyer who has played a central role in Crossover’s growth and success for more than a decade. As a partner in the San Diego-based firm Melendres and Melendres, Fred has participated in some of the best—and most challenging—parts of the Crossover story over the last decade.  As Crossover enters a new phase in its trajectory, Fred is bringing his experience, wisdom, and love of soccer to the culture of Crossover, as its new Chief General Counsel.  

Tell us a bit about your background?

I grew up in Albuquerque and went to the public high school right by my house. I did well and was accepted to Harvard, Yale, and Stanford for undergrad. For a variety of reasons, I ended up accepting a full scholarship to University of New Mexico where I played D1 soccer. I got a great education, got to play college soccer, and had an overall awesome experience. I eventually did go to Yale (for law school) so I feel like I got the best of both worlds. I was able to enjoy the Ivy League experience, but I also got to play sports for my hometown university. I double-majored in undergrad, earning my degree in both Economics and Spanish, with a Biology minor. That was one of the nice things about going to a school like New Mexico, you didn’t have to focus on one area of study. 

Are you still playing soccer?

I play recreational soccer, and when I go back to New Mexico, I play with my nieces and nephews, some of whom are now in high school and college. I definitely do not play as well as I used to but I still really enjoy competing. There are still some sharp elbows and choice words among the family as we are all still pretty competitive!

What happened after law school?

Most of my friends went to New York City law firms. I was attracted to Latham, a national firm that had a San Diego office. I’ve always loved San Diego and wanted to try out Southern California which would be much closer to my family and home in New Mexico. Latham had a great pitch at the time, the same salary for everyone, regardless of their office. I realized I could make the same salary as I would in New York, do the same type of work, but  be able to live in San Diego (which at that time was much less expensive than New York). So I jumped at that opportunity and have never looked back. 

What led you to focus on healthcare law?

Multiple things led me there. First, I’ve had a lifelong interest in the sciences—that’s why I was a Biology minor in undergrad.  When I went to Yale, I took health law and worked on the health law journal, not knowing then that I would want to work in healthcare. I quickly grew to appreciate the intersection between health, science, and the law and felt it would be an ongoing area of growth and opportunity in the future. When I went to Latham, it had an unassigned program that required you to work your first two years in each of their departments, regardless of whether or not you knew where you wanted to land. It was similar to a residency program for medical doctors getting exposure to all the disciplines. I worked in litigation, environmental law, corporate law, and finally, with the healthcare attorneys.

By doing that, two things happened. One, I discovered that healthcare law is really interesting, and what I was naturally the most inclined to pursue. And, two, I got a chance to work with two different mentors, both healthcare attorneys in the San Diego office. They both had a big impact on my view of the health law discipline. The problems they were working on, the way they navigated the issues, and how they partnered with their clients not only made me respect how they worked, but seeing what they were working on confirmed to me that it was where I wanted to spend my career. 

In retrospect, I think that type of legal residency program approach was pretty progressive on Latham’s part. And now, years later, I can definitely see the wisdom in using that method. It really helped associates speed up the decision process when it came to what area of law they wanted to focus on, whether they would stay, and how they could add the most value. 

Where did your career take you from there? What are some of your early memories as you ventured into your own firm?

I had two siblings who chose to start practicing at firms in New York. As we talked over those early years, we all felt like we could make a go of it on our own, and they decided they would be willing to come west to see if we could create a viable practice. We all ended up keeping our respective licenses, so the firm is licensed in New York, California, and New Mexico.  

What have been your interests and experiences over your career in health law?

It is ever-changing, in terms of the new technology as well as the delivery of care. Everyone is trying to figure out a way to deliver care in a different way, at this intersection between science and technology. One of the biggest challenges for attorneys working in the healthcare industry is trying to guide innovative companies through the legal landscape, especially in a system like ours where every state has its own set of laws. Additionally, laws are written in a certain period of time, or in a certain context and with a certain understanding of how care is delivered at a moment in time. Technology then advances faster than the law and innovators are always pushing on the frontier.

Adding to that are large shocks like the pandemic, which push this even faster and further. When things change so rapidly, three things happen: 1) The laws can lag behind the situations now possible through new technology, 2) Regulators’ interpretations may not advance as quickly either, which impedes the progress now possible through the new technology, and 3) Legislators try to figure out how to write new laws that adapt to the new circumstances. As a healthcare attorney, it can be challenging to apply a regulatory framework that was drafted before certain technology even existed and assist companies in implementing their new ideas, while complying with law. Not to mention the trick that is doing all of this juggling while moving at the speed of Crossover!

I’d suggest there’s a fourth challenge as sometimes the law is used as a means to limit new competition. Is that something that you’ve seen? 

When someone has built a successful care model under an established regulatory regime, they want to keep that regime in place. It can be concerning for regular brick-and-mortar doctors, who have a good practice, to think that someone can come in and deliver virtual care that could potentially take away their business. Perhaps they think their in-person practice will become obsolete, which of course may create a fight or flight response. But I think the future of healthcare consists of trying to maintain all the valuable aspects of the in-person visit while integrating all of the exciting new virtual technology. More broadly, I think there needs to be a recognition that the current healthcare system can be improved—staying entrenched in the older regimes may not be the best method to deliver member care. Everyone should constantly be looking for ways to improve care.

At the end of the day, it’s not about maintaining regulations for the sake of maintaining regulations, it’s about improving people’s health, and that seems to get lost in these conversations. Your thoughts on this?

You have to remember that the people who are making the laws are not the people who are delivering the care. So often they have not lived the ultimate goal of care. It would be great if we had more physicians who ran for office and helped set policy, but by and large, that’s not the case. Instead, you have people that are not in the industry, trying to create laws that might only apply to a snapshot or a quick moment in time—and it’s challenging for them as well. Companies in the healthcare industry have to do their best to deliver excellent care within the boundaries of the laws. To do that, we like to reach out to local regulators at both the medical and other licensing boards to understand how each particular law and the rules within can be applied to new models of care. We often need to retain outside counsel with expertise in specific states so that we can continue to innovate, while complying with each individual state and the laws they have in place. 

We need to have a system that rewards creating healthy individuals, not just treating the sick ones. We will always need healthcare. So if we can minimize sick care and maximize healthcare, we’re going to have happier people, a better quality of life, and less financial burdens on the system. I think that’s what our laws should aim for and that is also the way regulators should try to apply the law. But it’s important as well to keep pushing for member-centered legislation that seeks to improve overall health.

We continue part 2 of the interview with Fred next as he explains more about how he came to Crossover originally, the work he has done, and what he has learned about building successful health care services businesses.