Ventured Growth with Hercules Capital · Hercules Capital

#25 – From Physician to Founder: Scaling Iora Health to a $2 Billion Exit | Rushika Fernandopulle

·33 min·2 clips
Iora moved from a $40-a-month retail model to employer contracts, Medicare Advantage, and direct contracting.
1. Ventured Growth with Hercules Capital features Rushika Fernandopulle discussing Iora Health’s attempt to redesign primary care from scratch. 2. Katie Sagan interviews Rushika Fernandopulle, a practicing physician, co-founder, and former CEO of Iora Health, because his company scaled to about 50 practices and 50,000 patients. 3. The episode asks how a doctor moved from a failed-feeling clinic day to building a business that changed payment, delivery, and culture in healthcare. 4. Rushika says he became a doctor because he liked people, liked science, and wanted to help people work with different kinds of patients. 5. He describes a February day in Boston with 32 patients booked, an electronic health record that required “four pages of points and clicks,” and two extra hours of note-writing after dinner. 6. A colleague’s line, “Every day I lose a little piece of my soul,” convinced him the system itself was the problem. 7. He rejects what he calls the “incremental change model” and argues that healthcare may be “rotten to the core.” 8. At Harvard, he asked Gary Pisano how other industries made big leaps and got introduced to the Skunk Works idea. 9. He recounts the Lockheed jet-fighter story, including the P-51 Mustang, to show why new airframes require new designs. 10. He says he went to the Brigham, Mass General, Mount Auburn, and the BI asking for one practice to prototype a new delivery model, and they all declined. 11. Rushika says Iora was created to change four things at once: payment, delivery, IT, and culture. 12. He says fee-for-service creates a transactional system, so Iora moved to a relational model that paid per patient per month. 13. The delivery model included team-based care, a personal health coach, and integration of mental health and social needs. 14. He says Cerner and Allscripts were built for transactions, not relationships, so healthcare also needed a different technology platform. 15. Iora started with one practice in Arlington, Massachusetts, and later expanded across the country. 16. Early challenges included getting doctors, patients, health systems, and payment systems to try something new, followed by resistance from the “medical-industrial complex.” 17. He frames Iora’s broader strategy as a “Southwest Airlines Theory of Change,” where a credible new entrant forces incumbents to respond. 18. On business model evolution, he says Iora began as a retail model, moved to Boeing through Mercer, then shifted to Humana and Medicare Advantage, and finally to direct contracting with the federal government. 19. The interview is conversational and example-driven, with repeated analogies to airlines, airplanes, and biology to explain scaling. 20. People interested in healthcare startups, primary care, and venture-backed care delivery will get the most value; listeners wanting lightweight business talk may skip it.

As heard by us

A grounded look at value based primary care and the business logic behind it.

The physician founder’s move from practicing doctor to co founder and former CEO of Iora Health gives the episode its structure, and the discussion stays focused on the mechanics of value based primary care: how it gets paid for, who pays, and how it grows.

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Follow a physician-founder through the business model behind a $2 billion healthcare exit.

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