Advocare: From complaints to companies

When you're the boss, you hear all the complaints. Not every boss turns the complaints into a company, but that's what pediatrician  John Tedeschi did to establish his two companies -- which now employ 4,000 people and care for 1.7 million patients.

In our Leadership Agenda interview, published Monday in the Philadelphia Inquirer,  Tedeschi talked about how he started his companies, Advocare L.L.C. and Continuum Health Alliance, L.L.C., both in Marlton. The effort began in the mid-1990s.

John M. Tedeschi

"I've been a chairman in pediatrics and I’ve been chief of staff for many, many years for many hospitals," he said. (Virtua, West Jersey-Voorhees, Garden State Community Hospital). 

"In my role of chairman of pediatrics, I was seeing doctors becoming more and more dissatisfied with their careers," he said, quoting them, `Oh I wish we could do something else and we are working 10 hours a day and we can’t do this and we can’t do that.'

"Mostly everybody in the seven-county area knew me, so I wrote individually to everybody and I said, `tell me what’s bothering you.' At that time, I was focused on pediatrics. There were 107 pediatricians in the seven-county region and 85 of them wrote back and said, `We can’t stand the business of medicine.'

What they meant, Tedeschi explained, was basically all the paperwork, the reimbursements, the malpractice, the difficulties in hiring and firing personnel, dealing with insurance companies. Tedeschi had managed to figure all that out in his own pediatrician practice, which was very successful.

"I thought maybe I could help with that, so I came up with this: Why don’t I take the business away from doctors and let them be doctors?"

His idea was to create an amalgamation of group practices -- with each practice as its own profit and loss center. That way, the doctors who wanted to work all the time could, while those who wanted to work fewer hours could do that as well. "If you wanted to be at all your kids games at 5 p.m., it’s not going to hurt to me who wants to work to midnight, and if I want to work to midnight, I don’t have to pay you, who wants to work until 5 p.m."

The key was to get everyone using the same technology -- for billing, for medical records, for everything. Meanwhile, Tedeschi said, he was continuing to work as a doctor. 

I asked him if the business made money in its early stages.

"I really wasn’t running it as a business at that point," he said. "I was running it as an idea. It wasn’t important to me that the company was making money. It was important that the practices were making money. So, and I did it for nothing. But I love it. I really think I’ve made a difference in doctors’ lives."

How did the doctors pay for it? Tedeschi said he arranged for a company to handle all the collections and the doctors paid a percentage of  the collections. He got paid through money the practices saved through group-buying. 

At first, he said, he built the business for pediatricians. But other doctors heard about it and expanded, joining the big group that became Advocare. Doctors who didn't want to join could buy various components of the practice management separately. Or, hospitals could hire Tedeschi to manage the doctors' practices that they owned. That business became Continuum Health Alliance.

Now the part of the business that excites him the most is the possibility of using the data and the joined electronic health system to improve medical care. More on that Tuesday.