In this post, we continue our conversation with Fred Melendres, Crossover’s new General Counsel. He speaks about how he met the founders, the work he has undertaken in the past, and the scope of his new role. The journey from outside to inside is happening at an interesting time in health law as well as the current phase of the company.
How did you first connect with the founding team at Crossover Health?
One of my colleagues at Latham, who had started his own practice, knew Nate Murray. At that time I thought they were exploring a concierge medicine approach, which I didn’t know much about but wanted to meet the team.
It quickly became clear that they were not going to do concierge medicine at all. They first started talking about transforming the entire US health system. They told me they had to find a way for a business to be compensated for keeping people healthy at the primary care and ancillary levels. It was such a common sense yet revolutionary idea because there was no mechanism at the time (and only limited variations now) to compensate providers for keeping individuals healthy. The sicker a member is, the more money you make as a provider, hence the more value that member has. That seems like a very backward, broken system and the founders seemed highly motivated to do something about it.
They knew they needed to work within the current framework while changing the mechanism of delivering care, which led them to pursue a payment model with the employer paying directly for healthcare. They also shared with me that their first client was going to be a giant Fortune 10 from Silicon Valley. Now, that was crazy as well. I went to this meeting thinking this company was leading concierge medicine, and drove back as the lawyer for a completely revolutionary approach to paying to keep people healthy. It was amazing as you can imagine and I was hooked from that point forward!
So you got to see Crossover emerge from ideation to implementation?
Yes—but it wasn’t all smooth sailing. They didn’t just snap their fingers and everything fell into place. It was a long process for us collectively. We started from scratch, trying to figure out how to write contracts with an employer payer but keep meaningful separation from the care team. We had to work out complex arrangements with the likes of Kaiser and other providers who integrated into our practices, and then determine unusual privacy, compliance, and regulatory issues with the employer. It was a fast and furious, unrelenting pace—the team was winning more and more business while we were trying to lay the right legal foundation from which we could continue to build.
I can tell you that the cement wasn’t always dry but we developed strong processes and compliance/regulatory protocols. Of course, all of this had to be done with the member experience at the forefront—I still remember taking these long legalese contracts and simplifying them into plain English while still providing the necessary protections. Having that deep of a focus on membership experience—to the point where we were editing notices of privacy for readability—gave me a profound respect for how serious the team was about the details.
Your role has recently been formalized as General Counsel. What were the factors that led to this change and what will this role entail?
For many years, General Counsel was a de facto title because I was Crossover’s only lawyer in the early days. I served as legal counsel not just for regulatory, but in all kinds of areas, including connecting them to other attorneys with different areas of expertise for particular projects, and helping them manage those attorneys to make sure that they were getting what they needed. I became a bit more “official” when I was designated as the outside general counsel, a role I held for four years.
As Crossover grew, and the needs became more demanding, we began adding to the team, with our first in-house hire being our VP of Legal, Christine Wessel. She has a wealth of experience in multiple areas of law and she quickly became immersed in the day-to-day workings of the company. Later, we brought on Ariana Hawbecker as Legal Counsel, with a specific focus on employee relations law, litigation, and transactions. Both have done an outstanding job of creating a much more robust and stable legal function at Crossover. Late this fall, as the company was beginning to prepare for an even more aggressive growth phase, Scott asked me to come back as General Counsel, this time in an internal capacity. It won’t change a lot of what I’ve been doing but it will mean I’ll participate more actively in the leadership and board meetings, help coordinate with financial and partnership transactions, and have the opportunity to be more hands on in shaping the company’s growth during this next pivotal period.
What makes Crossover different from your perspective?
It starts at the top. The founders have certainly created a mission-driven company, which is what I bought into originally—that vision has never waivered and my enthusiasm for this work has never waned. I was a true believer from our first meeting forward. I also have always loved the member experience. Even though I don’t provide the care, I get so excited when we are able to have a tremendous impact on someone’s life. Our members really get to know and experience the difference when they have a true relationship with not just their physician, but their entire care team. And we hear consistently from the members who love that experience.
On the challenging side is translating that member experience so the payers and employers can see and understand the value we are creating with how we deliver care. I get to be involved in most of the client and partner negotiations and the role and the reach of our Primary Health services is not always understood. Translating the impact of our care all the way through to how that impacts their bottom line does require some work and effort to finesse.
Are there other healthcare companies out there doing a good job of communicating how they generate value for their clients?
I don’t think that anyone is really conveying the value of new systems of healthcare. Yes, they’re communicating access via virtual models, quick responses, and so on. We get to hear all the chatter from the various point solutions as well. But I can’t think of other companies that are effectively and consistently communicating to the individual the idea that you can build a long lasting, highly effective, and therapeutically aligned relationship with your own personal care team. That is the message that always resonates and differentiates Crossover.
You’ve been around Crossover for a long time. What role does its values play in its success and future?
The vision, mission, and values are something that I have watched in action for over a decade. The ethical core of the founders and the teams they have assembled over the years really radiates outward. Now that we’ve grown so much, in terms of legal and compliance, we need every single person that works for Crossover to buy into these guiding values and vision even more. I have worked shoulder to shoulder with Scott, Rich, and Nate so I have maintained a good sense of where those should take us. In my new role, I am still working to constantly convey these principles from every single health center, to every single department, to every single partnership. We always want our entire team to feel like it is their individual responsibility to support our legal, compliance, regulatory, and ethics which should always be aligned and consistent with our core values and operating principles. I do think all of these things contribute to an innate and shared “belief system” which is what I believe has helped Crossover be successful.
And, since this is vital to our past success, we can count on this being critical to our future success particularly as we scale moving forward. “Scaling the Magic” is a phrase that I take very seriously as an executive at Crossover. Iwant our values to be very clear to all of our team members so they can infuse their work with them. The trust the company builds with members is the same trust we need to establish with our new employees, especially as the company grows. We need a culture where people can expect that we will spend the time to train and educate, to have healthy and vigorous dialogue about issues, and then ensure that we use our ethics in how we solve legal, compliance, and regulatory issues as they come up. I want people to always be proud to work at Crossover because they know we will always do the right thing.
What’s something that might surprise people reading this about you? What are your other pursuits and interests outside of your profession?
Beyond soccer, which we have already discussed, I have a blast playing with my two sons who are 3 ½ and seven months old. My wife and I are very lucky if we can get a full night’s sleep but even with all the effort it takes to make sure their needs are met we feel pretty lucky! A surprise for people may be that my creative outlets over the years have been centered around music, science, and even starting a T-shirt company with one of my buddies. I am sure someday when my sons are older, I will have a bit more time to pursue some additional creative outlets, but for now, I’m just trying to get through the maelstrom of raising some energetic little boys!
Many thanks to Peter Heywood (one of our long-standing brand advisors and business consultants) who helped conduct these interviews. Please read Peter’s other Crossover Leader Series Interviews