Episode #515: Transforming Healthcare-Cyrus Massoumi's Journey from Zocdoc Founder to Dr. B Innovator

0:00 I am super excited to announce that we now have a formal partnership with the prospect wizard. And when I say wizard, I mean wizard. Obviously, you have a website. This allows you to convert your website traffic visitors directly into leads. It's not just another chatbot and it's not AI, but it allows a visitor to call, text, or leave a voicemail immediately goes to you, your sales team, or anyone else in the club instantly. MIT shows a study that if you contact the lead within 10 minutes, chance of them converting goes up 9 times that of the average. We got the Atlanta Clubs on it, Vida Fitness, Gold's Gym, Mountainside, City Fitness Philly, College Park, Become one of the next halo companies to deploy the wizard. It's easy to use.

0:49 Go to the prospectwizard.com. Get a free 30 day trial. Talk to my boy, Dave Gallon. He will get you all set up and let the leads flow based on the wizard. Go get them. This is Pete Moore on Halo Talks NYC on location Los Angeles Convention Center. I am here with a fellow New Yorker, Cyrus from Doctor. Beat. We are gonna talk about revolutionizing HSA, FSA, getting people into the clubs. My Cult Soul Cycle is on the Talk to Me program, so we are now officially affiliated. Welcome to your first Halo Talks. Thank you for having me. Awesome. So start off, let's talk about the name first, and then let's talk about and, how you kind of arrived in the Halo sector and your your, your participation and, and guidance and, leadership is is welcomed. So thank you for joining the crew. Thank you very much. So the name, doctor b.

1:45 So we doctor b got started really during the heart of the pandemic. And I have a family history of having doctors for many generations. Everyone in my family who either you you were a a doctor or you're someone who wasn't smart enough to be a doctor. I was in the latter category. Got it. But my, my maternal grandfather, was a physician during the Spanish flu, and he used to treat patients in his private practice a few days a week and treat patients in his non private not his public practice, his nonprofit practice 3 days a week. And he would, basically made sure that everyone was treated regardless of their ability to pay. K. And doctor b was pretty much grounded in that foundation. We started by treating COVID, patients for paxlovid and lumupiravir treatments, and people pay us $15 for those treatments. And if they can't afford $15, we also treat them at no cost. Was this remote? It was it's all remote. Everything we do is remote. But his my grandfather, they would call him doctor Bubba, which meant doctor dad. Okay. So doctor b is a hat tip to my paternal Love it. My childhood grandfather. So, know, we do we don't, you know, don't get entrepreneurs that have built huge businesses to then kinda enter our space. So thank you for coming in. Talk about Zocdoc and what you identified there, and then why you decided to come into this sector and say, hey. I could disrupt something else. Well, I started Zocdoc out of a need. 2007, I was flying across the country. I had a really bad sinus infection. My plane landed in New York and I ruptured an eardrum. Gosh. And I needed to find an

3:16 ENT doctor. I went to my insurance company website. I started calling down the list of doctors. Some of the phone numbers didn't work. 1 of the doctors was actually dead. And I'm like, this is such a horrible way of being able to access healthcare when I come from a family of health of health practitioners. So I thought that, there need to be a better way. And so we built Zocdoc to enable people to find and book doctor's appointments instantly online. When I would talk about how Zocdoc would improve access to care, and we helped, millions of people access their doc find doctors, book doctors, get them when they didn't know who was gonna be available. But when I would talk about how we're improving access to care, some people would ask, well, what about those 100,000,000 Americans who either have no health insurance or can't afford the health insurance that they have? Mhmm. And never really had a good answer to that.

4:03 But then enter, of course, COVID and the updating of various state telemedicine laws. And all of a sudden, you could practice health care in different ways, namely asynchronous telemedicine, which is what doctor b does, where the patient goes through a dynamic, interaction with, our chat based platform and, that then gets routed, to medical provider who then provides treatment where applicable. And so we do that by by leveraging this technology, you can make this type of health care very affordable. So we charge only $15 for each medical treatment. And, if someone can afford $15, we treat them at no cost. And we're the only medical provider in the US that does that anywhere in the US. Now So keep going. So we, we've been doing this now, for 30 different treatments across, 4 different medical specialties and and have wanted to figure out how we can encourage people to do more preventative care. If you sort of think about the miracle treatment that would help a most a wide variety, at least, of of medical conditions, everything from cancer to insomnia to anxiety to all the the the major culprits, diabetes, hypertension, high cholesterol, if you could prescribe one thing, it would be exercise. Mhmm. And there are, huge issues obviously in this country with people who are not being active, huge crisis with obesity. It's probably the biggest pub public health crisis, that exists today in America. And we wanted to create a way

5:37 for our basically, for Americans to access, these those who need these types of, need fitness and need the extra encouragement where maybe economics is a barrier to them accessing the the fitness they want Right. To enable them to use their FSA or HSA dollars to pay for these fitness expenses, which, of course, I know you and others have been involved in, the FIT Accords we're huge supporters of, but it hasn't passed yet. And now there's a solution where immediately today Yeah. People can pay $15 and they'll get the letter of medical necessity within 3 hours if they qualify. So so let me just to close the loop on Zocdoc. So so you sold the Zocdoc, or is that still is that still It's still a private company. I remain a very large shareholder in mid support.

6:21 Full time to to doctor b as your own new entity. Correct. I I I'm very passionate about health care access broadly. So Slava, who you know, has been, a great friend of mine since college. And we sort of grew up together as entrepreneurs, so we actually invest together as well at the venture fund called Omnvision. I spend most of my time, focused on doctor b. I'm also involved at Columbia and the public health school, where I've, learned that pretty much every cause that I care about that's not, business and and my family is probably public health. So I I'm very passionate about that. Got it. So let's explain to people, you know, what the definition of the IRS code that changed. Start with that. Talk about what the actual sequencing or, like, if I'm a I spoke to a health club operator yesterday, and I was telling him about the HSA FSA, a $150,000,000,000. He's like, what do I do next? I'm like, alright. I'm gonna I'm gonna hook you up with doctor b. Tell tell me. I make that call. You you get an email intro from the guy in New Jersey. What happens?

7:20 So we, the IRS has long held that medical expenses across the board are permissible to be used, with pretax dollars. What is your requirement for that is to receive a letter of medical necessity. And we the technologies that have come about because of COVID have made those medical interactions with medical providers significantly more accessible to the masses. These letters, it's not a complicated thing, but you have to write them in a very specific way because FSA administrators, HSA administrators want them to be in a very specific format, etcetera. Treated and also personalized that you it's not just like a form letter that you get off, like, legal Zoom or something. Right?

8:00 Exactly. And and it needs to tie back to the condition that patient has, and that condition needs to be something that benefits from the what's being prescribed. And so I think that, really the efficiencies that have come about from health care as a result of COVID have now unlocked this as being something that's much more affordable and done in a very streamlined way for people for whom it, they have a qualifying condition. This is Pete Moore. I wanna let you in on a little secret. There's this company called Promotion Vault, and what they do is they give out rewards from retailers that allow you to incentivize your members without having to do 0 down and 1 month free or giving away shakes or giving away t shirts.

8:44 What you wanna do is build a rewards program that lasts, that people value, and that doesn't discount your own products and services. So here's the deal. There's something called rewards vault. The rewards vault is going to allow a member to set up their own profile. They are going to answer questions. You are gonna get those answers. You're gonna be able to target those members, and you're gonna reward them inside your club, inside your spa, and outside of the club and outside of the spa to get them to become loyal, to get them to pay their monthly dues, and to be rewarded properly for the actions. A lot of companies are cutting back on rewards. You shouldn't be. Promotion Vault's your answer. Trust me. This is real.

9:29 So so let me ask you a question. So Ed calls you. Right? And and you're like, okay. I'm gonna get all of your members and your prospective members to be able to get a letter of medical necessity. Once they have that, now they could pay for your health club using their HSA, FSA account. Do you put a button on the on the, do you change their EFT electronic fund transfer from that credit card that you currently have that's Visa, and now it's the HSA card? Is it a checkout button on the actual website or the payment processing Talk us I I wanna make sure everyone knows this is exactly how you do it. This is how easy it is. Once it hooked up, roll. So I think most groups want us to understand. They've been asked about this for a long time. They haven't understood how it works. So the easiest thing that we can do, we stand up a microsite. It takes us minutes to stand up, and it's specific to whichever fitness partner is working with us. And the initial way in which we introduce we're introduced, in SoulCycle, for example, is simply through an email that they're sending to their members saying, hey. You may qualify for a letter of medical necessity if you have one of these conditions.

10:30 And, after you get the letter, expenses that, you have after that moment are now qualifying for, using a pretax dollars. And so I think that the it's really at no cost to the fitness studio or the gym. It's something that is very, very quick for us to put together. There are 2 models where either the member, our patient, will pay us $15 or in some cases, certain equipment companies, certain, gyms want to pay for this on behalf of their members, and we have that applicable as well. A deeper level of working together would be exactly what you're talking about, enabling FSA, HSA cards, which is something that, we're able to help them facilitate as well. So should are you actually do you actually set up an are you, like, the, the the merchant processing payment of that HSA, FSA checkout? So we would work with whichever, gym or fitness studio wants to work with us, and we would help them through their existing, relationship with their merchant processor process it. So we you're not trying to take, like you're not trying to become, like, hey. You build everything through, let's say, like Yeah. ABC Fitness. Right? One of the larger players here, and we're happy to introduce you to anyone you don't know.

11:46 And then we're we're taking that HSA, FSA. You're saying, like, look. I'm not gonna I'm not trying to disintermediate anything you're doing. Correct. With your current, I'm basically gonna make sure that they figure out how to put your HSA, FSA checkout card attached to whatever requisite card or debit card you have from your employer that's gonna allow you to use this, or I'm gonna give you a receipt, and then you can expend you know, go back and, like, expense it, I guess. Exactly. Those are the two pathways. Okay. One of the things I think that's really important for people to understand is there's a lot of interest in this area. And one of the things that we are very adamant about is you need to do it in a compliant way. And that means that there are a number of things that vary state by state, and you can't just have a one size fits all. So for example, you need to have a dynamic interaction with the patient. You can't just ask a woman if she has erectile dysfunction or a man if he has, if he's pregnant. You have to actually verify that the patient is who they say they are, which means you have to, in the majority of states in the country, check an ID and do a selfie of the patient. You can't just write a letter from Mickey Mouse and have that be a valid letter. Got it. Okay. All these things are tied to building a valid patient doctor relationship. And something that we as a brand believe, and if you speak to the IRS, if you speak to FSA administrators, if you talk to any significant health care regulatory attorney, they would tell you that establishing a valid patient doctor relationship is absolutely critical for this to be valid. Got it. Okay.

13:07 And not everyone in the industry is, understands and appreciates this, and it's one of the things that sets us apart. Yeah. Okay. Well, hopefully, if there are people that are cutting corners or, you know, going around the process and and and templating this out, like, bad actors destroy bad good things. So, hopefully, like, that gets regulated at some point or people kinda fall in line and know that, like, hey. When I got bad press too, like, there's gonna be word out on the street that, you know, this isn't valid, and maybe the employ employee might be have some liability associated with that because it might know. Well, I think the the it may even be more extreme than that for the the the party that introduces both if it's, not done in the correct way. So it's it's very it's a huge opportunity, I think, for this industry, but it has to be done responsibly, and, we think that we provide that solution. Now the doctors that are actually doing the letter of medical necessity for you, are they full time employees of doctor b? Is it a network similar to Zocdoc where it's like, I've got these certified doctors. I could vouch for them and they're doing it. How is your system set up? So we have doctors and nurse practitioners that cover all 50 states plus DC. And we part of what we do is match make sure that we're matching the patient with a doctor or nurse practitioner who's licensed in their state. Okay. And some of them are employees. Some of them are 10 90 nines. And the whole goal is that we want to provide this treatment within 3 business hours, 7 days a week. And, we we sort of have to augment our medical staffing at various moments to make sure that we hit that. Let's talk about, like, the magnitude

14:38 of money that people have built up in their HSA f FSA account. They might not even know it. Yeah. What do you see on that front? So there's a $150,000,000,000 a year that's in these FSA, HSA cards. I think it's upwards of $15,000,000,000 that goes just poof at the end of the year because people don't it's the FSA card specifically where it's time limited. HSA, you obviously can keep that. That's why you get those emails that say, like, if you don't use your FSA, like, use it for these items or else it's gonna Exactly. Be gone. So the HSA does have a rule forward. Right? You can't approve. Correct. It's it's considered a retirement benefit as such. Right. And and there's I don't know the facts on this yet, but there's, like, 2 or 3 companies that are, like, kind of, like, holding those assets on behalf of companies right now. I don't know if there's, like somebody mentioned to me in one call that I had that there's, like, 3 companies and they're basically making a float off that money, and they really don't have any incentive to have that burned down. Is that that's not necessarily the case. So they I mean, interest rates are a little bit different now, so maybe float's more interesting than they were 3 years ago. But, I do think that the most administrators actually they make money on the merchant processing fees as well, when you actually go and process, a transaction. So they for the HSA card. After the h s Okay. Gotcha.

15:48 Gotcha. So they they very much like that. And the money that goes unspent doesn't go to these companies. It generally goes back to the employers. And employers generally use that money to pay for, these programs and other benefit programs as a way of offsetting it. But I think most HR departments would say that they would rather their employees make full use of the benefit that they've put their own money into to allocating. So if you take a look, and I don't know if you have this data. I looked for it the other day. I couldn't find it. What does the average person have that's, like, let's say, 40 years old or 50 years old in a company that they have an HSA account that roll rolls over, would you say? So I don't know about the HSA side, but I think in terms of the allocation per year, it's generally 1500 to $2,000 that a a consumer would have on average. Got it. For those that So if we did the math, like, a $150,000,000,000 divided by a 100,000,000 people. I don't know the math on that.

16:43 15,000 could be, like, built up their HSA account over time. So I think that the, well, generally, they they wanted to accrue and and for it to be a health benefit. But, you know, if you if you look at the, it's if you one way to look at it is just the percentage of people that are on high deductible plans. So in order to have an HSA, you have to be in a high deductible health plan. 15 years ago, that was, like, 30% of the country. Now it's, like, 60%. 60% of the commercially insured people have one of these high deductible plans, which enable them to have an HSA. And so it's a pretty, and it's gonna be a growing portion of the country as as health care continues costs continue to go up. Employers want to shift the early part of that risk to the consumers that they're more measured with how they spend their dollars. And this is you know, I think what's great about that is no one there's really not an incentive in the health care ecosystem for payers to really invest in people's, preventative care. Sure. Sure. And partly because people change jobs so often. So if I invest, you know, $5,000 in making you healthier and 2 years later you leave Aetna and go to Cigna. Did I really get an ROI in that that spend where it's really lowering my cost 20 years from now? Yeah. Yeah. Yeah. And I think so that there's always been that weird economic reality. And I so I think that the great thing about these HSA accounts specifically is it it is pretty much the best v no one's gonna invest in your preventative care. On the payer side, you have to do it yourself, and this is sort

18:14 of one way that people can. Got it. So so one way that that we can be helpful and that you're targeting is groups that already have established membership basis Mhmm. That we think is beneficial for them to get a letter of medical necessity. They'll be able to use the HSA pretax dollars. They'll probably be able to they'll they'll probably spend more because it feels like it's an account that's kind of like use it or lose it whether it's is or not. We saw a company that we work with, this company right here, did an extra $1,000,000 in January in sales because HSA FSA approved on the on the couple websites. Nice. Material. And I think part of that was people don't necessarily these are high dollar products, but I feel like people say, like, this money's here. I'm not really sure how it got here. I think I paid for it. Not sure if I did. I know my company kinda paid for it, but, like, let's use it. And let let's use it, you know, to on things that I actually get value out of. You know, I think also attracting new members or people have churned keeping them to doing what they're doing or people who previously churned. Maybe cost was an issue, and they have one of these qualifying conditions. And they can come back and actually receive receive better, better treatment because they're looking at it holistically. Right. And then what about going after so so you're basically so so to to give everyone an update here. So I got an email from SoulCycle. They said, hey. Sign up with doctor b. You can get your letter of medical necessity. I'm gonna go through that process, and then I'm gonna be able to use my pretax dollars, HSA fund to buy my Soul Cycle classes, which I never discounted. So it's, like, $34 a class. From a standpoint of you going to a health insurance company

19:46 and go to, like, Humana. Right? Would though are those companies in a position to basically say, look, I'll send out an email to 20,000,000 members and say, get a letter of medical necessity, or is it coming from where where's the inertia? Is it coming from the bricks and mortar, like groups that are that have membership base? Is it coming from health insurance companies saying, like, yeah. I'd love you to burn down your HSA account because it's not gonna cost me more on my premium costs. Yeah. So, I think largely we've been focusing on partnering with fitness brands, what albeit, studios, gyms, fitness equipment companies. I think that's where, we've, seen the greatest amount of immediate demand. I think for an insurance company themselves, you you raise a great point. It's kind of a no brainer for them to actually come and say, here's something where it's not even part of your insurance.

20:33 It's separate. These FSA administrators are separate. Like, Fidelity and and I guess Optum is part of United, but it's still a separate legal entity. And so I think it's a great way for them to introduce their members to a benefit that, doesn't really affect their p and l as you articulated. This is Pete Moore. Here's the last tip for you of the podcast. We are partnered up with a company called Higher Dose, higherdose.com. They are the leader in workout recovery products, infrared technology, LED light masks, neck enhancers, and other products such as PEMF mats and sauna blankets. If you have not gotten on the workout recovery train yet, your time and your stop is now. You gotta get these products in there before these workout recovery and spas end up saturating your market, having your members walk out of the club and going into one of their locations for $200 per month where they're paying 39 to you, let's become an expert in workout recovery if we are already an authority in workouts. Higher dose, check it out. There's a wholesale code, and we look forward to helping you augment your products and services to meet the demands of your members. And, hey, let's get people happy, healthy, and sweating, and the recovery should be just as good as the workout.

22:04 When did you start issuing letters of medical necessity? Was there was there a certain trigger date? So q 4 is when we first rolled out. Okay. Have you and me so if you say I don't wanna share any data, you can say that, but then you can tell me. No. I'm just kidding. Yeah. Have you seen if you, like, cohorted this data out, what age groups are participating the most in getting who who would like the first movers in letters of medical necessity from a from a person standpoint? 25 to 50 year olds. I think it's, skews slightly more women, 60% more women. That's true of everything digital health, to be honest. Zocdoc was that way. Mhmm. Doctor b broadly is that way. But, obviously, having started in COVID, we had a little bit of an older demographic there.

22:47 People that I mean, we, of course, treated 20, 30, 40 year olds, but it went all the way up to 70 or 80. I haven't looked at the specific age demo, in terms of how far it extends, but it generally it's a bit of a younger group. Got it. And, you know, from a standpoint of you've got a lot of investments. You've you've built several companies. Is this a company that you're trying to line up to get either venture capital or private capital? Do you say, hey. Look. I got my relationships inbound. The the calls are coming in. I'm gonna walk around the show, pick up a 100 different, you know, establishments through me making 4 introductions to you or you you rolling around here. Because you're getting $15, but it's not you don't have, like, a recurring revenue stream with this business. However, you got a 100,000,000 people. So maybe it's not necessary.

23:30 It's even more, like even people who have health insurance use doctor b because it's cheaper and faster. $15 is less than your co pay. And if your doctor is not open on Sunday, and we are, just that much more convenient. So you're so you're not just doing letters of medical necessity. You're you're you're providing basically a a a tele doc service under under doctor b. Correct. We we have 30 different treatments. So a quarter of the reasons why you go to primary care doctor, this is one of them. But we're a broad based, telehealth provider. And I think for us, you know, I'm I'm very passionate about making health care more accessible, and I wanna figure out ways. It's pretty much my reason for breathing. And Yeah. I I I Breathe away, my friend. Welcome. Yeah. And I and I think that this convergence though of wellness and health, which obviously the new name for Ursa, the Health and Fitness Association, I think, is an example of that. Yeah. Sure. And I think, this is only, you know, our our our goal here is not just to offer letters of medical necessity to members, but also to be health care partners for all of these gyms and fitness studios that are interested in making that leap and understanding what that looks like and how do you do it in a responsible way and make sure that you can really make people's lives better more holistically. And I think that's that's that is a very large, I think, need and something that, will keep us busy for a very long time. I'd say the first time that we spoke, you know, several months ago, I didn't fully appreciate that the the what you were trying to do. I I thought it was more of like a, an outsourced

25:01 health opportunity for franchisors or franchisees or locations. Basically, plug in and say, like, hey. I'm affiliated Teladoc. Yeah. The fact that this HSA, FSA is is basically all I'm preaching right now besides setting up programs for GLP 1, you know, call it like PLG, and, like, we're gonna reverse the effects of, like, the negative effects of, like, muscle, you know, atrophy. Those are the 2 things I'm talking about right now that are important. It's like real revenue helps a member. Everyone's aligned, and you gotta get on the front end of this because it's gonna it's gonna be material. Somebody told me they signed up a 173 people last month related to his HSA FSA usage. I mean, that's a lot of money. Yeah. I mean, we we've seen, literally, there are thousands of people coming Yeah. On a regular basis. And it's it's there's a huge amount of demand for it across the board. And I think we're just, it's a great industry to be a part of. I I like, having spent lost lots of my career going to health care conferences, having this opportunity, everyone's so I think maybe because they work out more, everyone just seems so much happier and higher energy. And, it's just great, it's a great industry to be partnering with. Yeah. Well, look. We use the term halo. We we we don't like the word wellness. It was started in 19 fifties by a guy at the, Mayo Clinic. Okay. His name's doctor Halbert Dunn. He was a biostatistician, and he was trying to come up with the opposite of illness. Yeah. So that's how the wellness movement started. So if you're not sick, you're okay. Yeah. You know? And I was like, dude, like, that no one's ever come to me like, I got this awesome wellness idea. It kinda drops like a TED bike. Yeah. So we're playing around with some letters. I'm like, holy shit. The word halo, health, active, lifestyle outdoors, we're gonna create the halo effect. Yeah.

26:35 Obviously, you're you're a big part of that inertia. So what we're trying to do is tell people, like, you're a halo company. And and all everybody here is fine for kinda like the halo movement, halo sector, trying to get rid of the word wellness because I don't want you to be well. I want you to be amazing. Like, why can't I? Like, I know physically what I need to do, and I know what you need to do. And if you're disciplined, and I could give you it in a cost effective way through doctor b, you really have no excuse to be amazing. So welcome to the industry. Happy to make intros. Use the t halo term as much as you'd like. We'll help you, you know, get more and more people on this. And, you know, we're excited that you've, you know, made the leap into our market. And it's guys like you that are gonna really, like, change things. So Awesome. Thank you, Slava. Appreciate it. William, Washington Capital, Jersey next time I see you. Hi, Slava. Hope you're listening. Nice, Tanner. Talk to you soon, buddy. Later. Cheers.

27:21 Thank you.