Michael Kopko | Pearl Health
MICHAEL KOPKO
Co-Founder & CEO of Pearl Health, a company enabling primary care practices to thrive by compensating providers for improving their patients’ health.
What Is Pearl Health? Tell Us About Your Company, How It Works, And What You Do Differently.
Pearl Health is fixing healthcare by enabling primary care doctors to transform their work with value-based care, starting with Medicare’s Direct Contracting program. To do this, we’re building the most trusted platform for enabling primary care providers to bear and capture value from risk while delivering life-improving care to their patients. As a technology-first company, we offer a physician enablement platform, alongside our risk marketplace, that will help physicians manage patients’ total cost of care.
We’re excited to release the first iteration of the Pearl Platform in the first quarter of 2022, aimed at enabling physicians to decide how to deliver better patient care at a lower cost — while capturing more value for themselves. This includes:
Easy-to-understand financial reporting and payments management
Strategic visibility into patient panel health
Dedicated expert support to ensure success
In contrast to the flurry of acquisitions of physician practices by health systems, PE groups, and other self-purported physician enablement companies, at Pearl Health, we aren’t seeking to have greater control over practices. We offer a clear alternative to those providers who wish to remain independent, instead giving them greater access to economics that are more in line with the value that they generate for the healthcare industry. We believe that primary care providers can best serve their patients when they’re allowed to remain independent. At Pearl Health, we aim to enable and empower them to take that opportunity — and to take a bet on themselves.
What Is Your Background? What Led You To Starting Your Own Company, And How Did You End Up In This Space.
I grew up in central Connecticut, and I was raised in an extremely entrepreneurial and hard-working family. I caught the entrepreneurial bug early, starting my first business in 3rd grade: selling magazines. It was fun to help my classmates — a fun-loving and rapidly expanding salesforce — generate more than their lunch money. This was a great experience that taught me how aligned incentives and teamwork are the lifeblood for a rapidly growing business. I worked hard with my Mom on weekends, spending hours building pricing catalogs and tools to help our salesforce grow. It’s probably fair to say that my Mom was my first co-founder.
As I got older, I was lucky to be the first member of my family to earn a spot in an Ivy League university, Harvard — a point of pride for my family. After Harvard, my luck continued, and I went straight to Columbia Business School after receiving the Feldberg Fellowship.
After business school, I had the opportunity to work at Bridgewater Associates, the largest hedge fund in the world, where I led a team of 60 hedge fund researchers and reported to Ray Dalio, its founder and co-Chief Investment Officer, and Greg Jensen, its CEO and co-CIO. My time at Bridgewater taught me how to tackle big problems with smart, committed people.
From Bridgewater, I joined Oscar Health with several other Bridgewater alums and Josh Kushner, a serial entrepreneur and now world-class investor whom I met at Harvard. When we first met, funnily enough, Josh offered to invest in a startup that I founded in college. This time around, we were intent on making the collaboration happen, and I’m grateful that we did.
Helping build Oscar from a team of 20 people to a publicly-traded company gave me the opportunity to have some of the coolest and most educational experiences of my career. It also gave me incredible insight into our healthcare system. My fantastic team and I were responsible for distributing Oscar’s health plans across the country, then building complete networks to serve them. After that, I managed the Oscar’s largest P&L — greater than $2.5bn — to help make Oscar more sustainable.
My time at Oscar reaffirmed the critical lesson that incentives matter — and, more specifically, that we had devalued our primary care layer in healthcare across the country. It was sad to see, but it hinted at a huge opportunity.
When I learned of Direct Contracting, a new and innovative model out of the Centers for Medicare & Medicaid Innovation and I met with the team at AlleyCorp — including Kevin Ryan, Jeff De Flavio, and Ankit Patel — I felt that we were on the precipice of a huge idea that was going to make a national impact. Pearl was born shortly thereafter.
What Was The Inspiration Behind The Company Name?
Pearl Health is a reference to the notion of “clinical pearls”, which are small bits of free-standing, clinically relevant information based on experience or observation. They’re part of the vast domain of experience-based medicine, and can be helpful in dealing with clinical problems for which controlled data do not exist.
We’re helping doctors focus on this irreplaceable impact that only they can provide, and we’re striving to free them from the burdens that currently overrun their lives.
I also love the idea of how a pearl forms in nature — the beautiful result of irritants around it. It’s a great metaphor for the contribution we’re trying to make in healthcare.
What Have Been Both Your Favorite And Least-liked Parts Of Your Entrepreneurial Journey? What Have Been Your Most Challenging And Most Exciting Moments For You And The Company?
I deeply enjoy bringing people together to solve hard problems that make the world a better place.
At Pearl, I feel fortunate to have the opportunity to do exactly that. We’re building a team of world-class talent, and we’re laser-focused on making healthcare more sustainable. Every member of the team shares a deep-seated passion for making an impact and building something great. I personally never feel like I’m working when building Pearl with our team. Instead it feels like we’re assembling a big orchestra that will produce beautiful, incredible things for the people around us. It’s been magical to watch it unfold.
Our best moments have been meeting with physician practices across the country and introducing them to the power of Pearl and the future of a value-oriented healthcare system. I love meeting our clients and building relationships with new ones. I think the best clients challenge us to improve and get better, which helps create a virtuous cycle. Needless to say, primary care doctors are remarkable people. They genuinely care about their patients, and they’re working hard to find new sources of value for their patients, their staff, and themselves.
I don’t have a least favorite part in entrepreneurship. I genuinely love solving problems at scale — and with the right team and resources. Being an entrepreneur somewhat guarantees that you won’t have all those preconditions, so it forces you to be creative and inventive with less. I think that push can generate creativity and innovation, which I love.
If anything, I empathize a lot with the obstacles that our clients face. So much about our current system gets in the way of what they want to be doing most: caring for their patients. The flipside of that is the incredible opportunity that we have to help doctors — real-life unsung heroes – deliver better healthcare at a lower cost, making both them and their patients happier and better off.
Tell Us About Your Co-Founders And How Their Skills Supplement Yours.
Jeff De Flavio brings a ton of clinical experience, having launched other companies in the healthcare space focused on making peoples’ lives better. He’s founder of Groups: Recover Together, the national leader in value-based care for treatment of opiate addiction. Jeff earned his MD from Dartmouth College of Medicine, along with his MBA from Tuck School of Business at Dartmouth. Most importantly, Jeff is a relentless optimist, and sees every stumble in the road as an opportunity for a new path.
Ankit Patel brings lots of healthcare policy experience, previously as a Senior Advisor at CMS Innovation Center, where he worked on different value-based payment models, including the Pioneer ACO program and Maryland All-Payer Waiver. Most recently, Ankit led Provider Alignment at Clover Health, building programs and software to engage providers to achieve better health outcomes at lower costs. He started his career as a healthcare attorney for an academic medical center, after earning his BA in International Studies at University of South Carolina - Columbia and his JD from UNC at Chapel Hill. Ankit is a hustler at heart, who tries to see opportunity in challenge and won’t be fooled by healthcare nonsense. He also likes to give hot takes, which the team finds refreshing and engaging.
Kevin Ryan is one of the great entrepreneurs of our time, having built game-changing businesses across a breathtaking variety of industries. At Pearl, we feel lucky to find ourselves alongside the likes of MongoDB, Gilt Group, Zola, Nomad Health — all of which benefited from Kevin’s energy and intensity, which I absolutely love. I deeply value that Kevin has been both an operator and an executive, and I admire his incredible focus, drive, and desire to live life to the fullest. I enjoy spending time with Kevin, and always find myself incredibly impressed by his vision.
What Was The Fundraising Process Like For You? Tell Us About Your Investors And How You Use The Funds You’ve Raised.
The fundraising process for Pearl was extremely exciting and stimulating. It came with highs and lows, but ultimately resulted in a wonderful set of partners to join us on our journey — and enabled our team with the resources to accelerate and propel our vision and the future of value-based care forward.
We started by doing pitches to prospective investors. We were also having our first team retreat at this point, so the whole company had the chance to listen to the pitch, which seemed like a special experience to share with our early crew. I had been at Oscar for a very long time, but I had never had the chance to see a fundraising pitch. Sharing that with our first ten team members seemed like a fun, remarkable start in our commitment to transparency and inclusion.
We ultimately decided to move forward with Andreessen Horowitz and Vineeta Agarwala, MD. That process was incredibly special, as we had many great firms who wanted to support us. After meeting with Vineeta, her team, and Marc Andreessen — and, really, the entire a16z healthcare team and many of their partners — we were convinced that we had a very special community and platform to build Pearl within. The a16z team have been exceptional partners, every step of the way.
We were also extremely fortunate to have Kevin Ryan and AlleyCorp participate in our Series A fundraise. The AlleyCorp team is incredibly supportive and dedicated to the future of healthcare, and has expanded our thinking at every interaction.
We will be using our funds to accelerate product development, continue to build out our team of world-class talent, accelerate growth and expansion, and help facilitate and support our physicians to succeed in value-based care models as they make this shift.
How Has Growth Been Over The Last Year? Anything Exciting Launching Soon?
We’re loving it and have exceeded our own expectations. At the start of 2022, nearly 10,000 lives will be managed by more than 100 doctors through our physician enablement platform across 51 ZIP codes in 13 states.
For 2023, we will expand significantly, focusing first on increasing density in existing markets to help us provide even more resources to our PCP partners to help them deliver better care at a lower cost.
Looking forward, we’re building a marketplace that connects providers and payors in risk-based arrangements, where providers can increasingly bear and capture value from risk and transform their practices to value-based care. We’re actively building partnerships to realize this vision.
How Has COVID-19 Impacted Your Business And Operation? Have There Been Any Significant Changes Over The Last Few Months As Things Have Gotten Better Overall?
COVID-19 was horrible for our country in so many ways. Our team rallied to find the silver lining during those difficult times, and we invented new ways to find and hire great people — you can work with us anywhere! COVID-19 also served as a forcing function for solving important physician problems, like the challenge of decreased in-office visits on primary care practice’s finances, while also not losing the humanity and personality that’s required to build a human-first healthcare business.
We’re excited to have incredible talent across the country — and the world(!) — join us on our mission. A remote-first culture has enabled us to have a broader set of perspectives at the table than a geographically-focused organization, which I see as a competitive advantage.
As COVID-related conditions have improved, we’ve seen a growing desire for our team and our clients to come together, and we’re developing systems and strategies to enable that collaboration and togetherness safely.
How Do You Think Your Industry Or The World In General Will Change Post-COVID?
COVID-19 demonstrated the fragility of our healthcare system and the ways in which we take for granted the providers that make it run. We need to empower and support them more effectively going forward, and part of that is helping them realize a greater portion of the value that they bring to the healthcare system. For too long, individual primary care providers have been kept at a distance from bearing risk and capturing downstream value that they create for our healthcare system. Instead, rewards from shared savings line the pockets of insurance companies, health systems, groups, or whoever else disintermediates doctors from risk. Or, perversely, fee-for-service incentives have been aimed at rewarding volumes of activities, instead of outcomes, disincentivizing doctors from making meaningful connections that don't neatly fit into maniacally managed schedules. This has to change, and it starts with changing the way we recognize the value that individual doctors create. The first step is giving them back their autonomy and time, and that starts with fixing their incentives.
COVID-19 also underscored the challenges of running critical healthcare systems without integrated data infrastructure or, even worse, with paper-and-pen processes. It’s been hard to effectively operate in any industry, and it was especially true in healthcare. When it comes to helping to keep their patients healthy, one of the biggest obstacles that providers face — especially primary care physicians and their staff — is their lack of visibility into patients' health care journeys. Data exist but are scattered across constellations of different systems in different formats, making it next to impossible for doctors and staff to know how their patient is doing when she goes through the system, from whom and where she's receiving care, and whether ongoing care is aligned with the patient's best interests. That's why we're building a platform that aggregates and visualizes data to enable primary care physicians with strategic visibility into patient panel health, alongside easy-to-understand financial reporting to help them allocate and manage resources.
What Is One Thing About Building A Business You Did Not Know That You’ve Learned So Far Since Launching Pearl Health?
People make choices because of people, at least in the early innings of your venture. You are the brand, and you are the reason people say ‘yes’ or ‘no’.
Tell Us About Your Typical Workday Schedule. What Are Your Morning And Evening Routines?
I’m currently working long days. Emails typically start around 7:30am, and I typically sign off just before midnight. I only do it because I enjoy it and it’s all building toward something, so I don’t feel like I’m working the same way it might feel for others. If I didn’t feel that way, my “schedule” would be impossible. In general, we try hard to take weekends off as a team. I believe in the restorative process of some time away and time spent with family and friends. Even though we work hard, it’s important that people “relax hard” too.
In the morning I usually work out. For me, exercise is critical and highly related to my mood throughout the day. I’ll have a coffee in the morning and spend some time with my 2-year-old daughter, Charlotte. She’s my greatest gift in the world.
I make an effort to take a few 5-10 minutes breaks throughout the day to move around, see Charlotte when she’s back from school, and clear my mind.
Every day I also try to write three appreciations, something I’m thankful for. This simple technique, which I’ve been doing for many years, helps me start my day with thanks and optimism, instead of agitation or disappointment.
I’m probably doing too many meetings right now, but I’m committed to being available and up-to-speed with what’s going on across Pearl and beyond. That said, this is something I’m thinking more about — and how to balance it with the increasing demands on my time.
I’m increasingly using a paper journal to write down insights and important things, so I can reflect a little more. I’m also trying to reboot my daily meditations, which I’ve been doing for the better part of eight years now.
What Are The Top Qualities or Skills You Believe Entrepreneurs Need In Order To Be Successful? Also, What Advice Do You Have For Entrepreneurs Who Are Just Starting Out?
Relentless determination. Tenacity and conviction, coupled with an openness to seeing reality, enables one to identify and realize what is possible.
Continuous optimism. There’ll always be obstacles, and you have to have an optimistic mindset to endure the hamster wheel of problems and not get discouraged. Most obstacles are tests to help you and your team grow and establish who is meant to be on the other side versus who simply wishes to be on the other side.
Be trustworthy and know your business. Work hard to do what you say and say what you do. First impressions and your areas of focus define you.
For entrepreneurs just starting, I encourage you to enjoy the experience and be ready to put in the hard work. Entrepreneurship can be found in many places, so don’t create a false idol of what successful entrepreneurship looks like. It’s rarely what you read in the news, and it’s never the same thing twice.
Tell Us A Story Of Something That Happened To You, Something You Heard, Or Something You Saw, That Either Made You Laugh Or Taught You An Important Lesson.
The birth of my daughter was the most significant moment in my life.
It taught me to enjoy the moment more and appreciate my time with the people I care about. I am so lucky to have Charlotte — not only because she is awesome, but also because she’s so loved, brings happiness to everyone around her, and will always be my wife’s and my baby.
Her constant joy and excitement has helped me re-experience the world around me.
Becoming a father to a baby girl was such a special and transformative experience. It rewards me each day. I’m excited to get out of bed in the morning to see her, and I love the adventures that we get to go on together.
If You Can Have A One-Hour Meeting With Someone Famous Who Is Alive, Who Would It Be?
I’m lucky to have one of them as my mentor of nearly 20 years: George David, the Chairman of Raytheon. I love my time with George, because it gives me the opportunity to ask questions that I struggle with but are hard to share with others. He also has a genuine care and concern for my development and growth, and he sees a big enough world that he knows how to separate what’s important from distractions. I have other heroes too.
More generally, I encourage people to reach out to those who they think are great. You might get lucky and have one of them in your life.
What Is Your Favorite Quote And Why Does It Resonate With You?
“We will either find a way or make one,” said by Hannibal of Carthage upon his famous excursion through the Alps. I think it captures the grit, ingenuity, and confidence that is required for the entrepreneurial journey.
Is There A Parable That You Often Think About? What Is It And What Lesson Does It Teach?
I love the real-life parable of the Stockdale Paradox, which I first came across in Jim Collins’ Good to Great.
Admiral James Stockdale, a Congressional Medal of Honor recipient and former prisoner-of-war, said of his multi-year stay in a POW camp: “You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
It’s a poignant lesson for all people, not just entrepreneurs, about the paradoxical need for both relentless optimism and intellectually honest pragmatism. Both are required to endure the ups and downs of entrepreneurship — and to build a path to the other side of what may seem like insurmountable obstacles.
Who Is Your Role Model?
My father has been a great role model in my life. He was able to build and create a lot having come from humble beginnings and invested in his children, his colleagues, and his friends. He’s an optimist and an entrepreneur at heart, and I’ve enjoyed learning from him and spending time with him from being a little boy to an adult.
What Do You Do In Your Free Time?
Working out
Time with my wife, daughter, and rest of my family
Seeing friends and doing outdoor activities with them
What Does Success Mean To You?
Success is the progressive realization of a worthy goal. I think that, while anybody can achieve success, it takes a willingness and a discipline to drive toward it every day. For my part, I’ve enjoyed specific missions that I think are important for the world. In this chapter of my life, it’s helping Pearl’s vision manifest into reality and enabling the United States to get much more out of our healthcare system at a lower cost and with greater satisfaction. For my family, colleagues, and friends, it’s helping them achieve their ambitions and dreams, however best I can, so they live a life of abundance and adventure without regret.
Michael Kopko’s Favorites Stack:
Books:
1. How the Economic Machine Works, by Ray Dalio (technically a video)
2. The Firm, by Josh Grisham
3. The Phantom Tollbooth, by Norton Juster
Health & Fitness:
1. Run on the streets
2. Citibike over the Brooklyn Bridge and all around Manhattan and Brooklyn
3. Walking around with my daughter Charlotte
Brands:
1. My Pearl hoodie
3. Nice pair of dress shoes
Products:
1. Airpods & iPhone
2. American Express
3. Robinhood & Audible
Newsletters & Podcasts:
1. The New Yorker
2. The Strangest Secret (YouTube)
3. NY Times & WSJ & StrictlyVC
Upcoming Vacation Spots:
1. Salvador, Bahia, Brazil. My wife Marcela’s family loves seeing their granddaughter, and we love seeing them.
2. Clinton, Connecticut. It’s the beach town where I spent my summers as a kid growing up.
3. United Kingdom, Scotland
4. Ireland
5. Marcela and I still want to make it to the Maldives.
