By Joseph Rago
September 21, 2012 | Los Angeles, CA — The rich are different than you and me. Not only—yes, yes—do they have more money, but they’ve also heard of, and many have hired, Leslie Michelson. He’s their de facto primary-care doc, though he holds no medical degree.
Mr. Michelson is the CEO of Private Health Management, an ultra high-end company that borrows from concierge medicine, managed care, applied-sciences research and information technology while fitting into no neat category. The best analogue might be the investment and tax specialists that the affluent employ to run their finances; Mr. Michelson does the same for their health care. “Like private wealth management, just far more important,” he quips in his modern Beverly Hills offices, all green glass and steel, white walls, white floors.
Mr. Michelson—who sounds remarkably like the actor Michael Douglas—has spent 30 years in the health-care business and thinks he has learned what’s wrong and how to fix it. And how to profit from it. Thus Private Health, which he founded in 2007.
“We don’t have time to wait for the system to heal, so we cure it for our patients through sophistication, brute force and technology,” Mr. Michelson says. On one level he offers a glimpse into what it takes “to get people the very best health care in the world,” as he puts it. Yet the real interest may lie in what Private Health’s business model—reported in detail here for the first time—reveals about the future of U.S. health care.
Private Health caters to “high net worth individuals” and to businesses that retain its services for their executives as a benefit. Mr. Michelson says he serves between 12,000 and 15,000 clients, “principally in private equity, hedge funds, professional and financial services firms.” Private Health is closely held and doesn’t disclose its membership fees, though Mr. Michelson does say he runs “a business for people who can afford us,” the implication being that if you have to ask .
Strictly defined, Private Health isn’t part of the growing phenomenon known as concierge medicine, where doctors charge a retainer for more face-time and personal attention, and often take their practices off the commercial and government payment grid. Private Health isn’t an insurance company either and maintains no contractual or financial relationship with its doctors. “We don’t buy access,” Mr. Michelson says.
A large part of what Private Health does is simply match patients with physicians, which isn’t as obvious as it sounds. “People do not know how to choose doctors. It’s one of the most important things you can do to promote your own health and that of your loved ones, and it’s: ‘My friend’s cousin’s relative went to Dr. Smith, and he was terrific.’ Well, how do you know he’s terrific?”
So Mr. Michelson built a series of proprietary algorithms to distinguish “the few who are the very best” from “the many who are very good,” based on “the factors that predict excellence.” For example, the premier caregivers for metastatic cancer are usually academic researchers on the cutting edge, not general oncologists. The best orthopedic surgeons perform many procedures as they master the clinical learning curve, ideally for a single injury.
His referral database includes 2,200 specialists across 160 medical fields, “reified into far finer groupings of disease than is standard practice.” He says that “the world becomes so much clearer when you are able to identify the physician with the deepest and narrowest expertise in exactly what you need.”