Why I Quit Full-Time Medicine to Start a Company — to Fight PBMs!

“At the end of the day, if you follow the money, you can actually find the answer, what's really going on. So that’s what I did: I followed the money of prescription drugs. Where does each dollar go? And I just dug deeper and deeper.”

Dr. Simon Chang is a hospitalist and the CEO and co-founder of eNavvi, an online pharmacy platform. Since finishing his residency in 2022, Simon has been a part-time physician, splitting his time between clinical care and entrepreneurship.

On this episode of How I Doctor, Offcall co-founder Dr. Graham Walker talks with Simon about building a career in medicine and a pharma-tech company at the same time, interacting with other physicians as both angel investors and product users, and partnering with like-minded companies including Mark Cuban’s Cost Plus Drugs. Simon explains why he set his entrepreneurial sights on prescription drugs and how eNavvi helps remove pricing-transparency barriers created by PBMs (pharmacy benefit managers). He also makes a convincing case that physicians are especially well-equipped to solve the most complex and stubborn problems in healthcare.

Here are three takeaways from an episode with an extraordinarily enterprising early-career physician.

Being a part-time doctor has been central to Simon’s success.

“I can support myself financially while building my company. I don't have to take money if I don't have to, and I can keep on building a product the way I would like it to work for our colleagues.”

Simon was bitten by the entrepreneurship bug at age 12, when he made money selling Yu-Gi-Oh cards. That inclination toward business stayed with him. Simon has been a doctor-slash-founder since he began his career in medicine. He knew during residency that he wanted to start a company to help physicians find cost-effective drugs for patients. He also knew that physicians were in high demand, so he wouldn’t have trouble finding part-time work. Then, it was a matter of figuring out the right balance: How many days each month should he work as a hospitalist in order to carve out enough time to get a startup off the ground?

Within two years, it became clear that Simon’s first product was gaining traction. He figured out that the right clinical workload for him was seven days a month — he could make enough money to support himself and his entrepreneurial ambitions.

Simon didn’t make medicine his side gig because he was tired of it. He loves practicing and sees a full-time hospitalist position as a feasible fallback plan if he ever decides to step back from business.

Physicians have more than one edge when it comes to building healthcare companies.

“To solve problems in healthcare, you have to understand how it works and how clinicians work.”

A lot of research and thought went into the conception of eNavvi products. Simon’s first-hand knowledge of healthcare pain points helped him identify where physicians were struggling, and which types of products could make their jobs easier.

Simon homed in on an all-too-common situation in U.S. healthcare: A patient ends up in the hospital after going to the pharmacy and discovering they can’t afford the drug they need. He determined that pharmacy benefit managers (PBMs) help fuel this problem by influencing decisions about formularies (price-lists for drugs covered by insurance plans) and restricting access to them. That information shouldn’t be hidden, especially from physicians. So, Simon’s solution was to create a prescribing platform where physicians can see the cost of drugs they might prescribe and then prescribe them digitally from any device.

Simon is using partnerships to strengthen eNavvi’s footprint. The platform is integrated with Mark Cuban’s company Cost Plus Drugs, which negotiates with drug manufacturers directly (eliminating PBMs from the equation) to offer generic drugs at low prices. An integration with Single Care, a prescription discount service, is in the works.

Being an insider — a physician building for physicians — also helped Simon on the funding side. He knew there was an appetite to invest among physicians, but he wasn’t sure if they’d actually write checks. As it turned out, they were eager to get involved because they understood the value of eNavvi. So far, about 70% of eNavvi investors are physicians, and they’re spreading the word to other physicians.

To create stand-out healthcare tech, talk to users right away and keep following up.

“If you are trying to build something, get an MVP, talk to the end users, talk to a lot of end users to figure out if what you're building actually works.”

From the start, Simon kept the needs and preferences of physicians — eNavvi’s target users — top of mind. He knew that physicians often don’t get far when they try to point out problems with tech products, like EMRs. So he solicited their feedback while building tooling, making sure that user experience and design were a primary focus.

Also, even though doctors appreciate being asked for feedback, they’re really busy. So, if you want them to participate in product testing or UX research, you might need to reach out a few times to nail them down. Even if they agree initially, Simon says, always follow up. He also thinks that physicians are willing to do more for other physicians, so it’s smart to lead with that commonality.

Connect further with Simon on LinkedIn here.

To make sure you don’t miss an episode of How I Doctor, subscribe to the show wherever you listen to podcasts. You can also read the full transcript of the episode below.

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Transcript

Simon Chang:

At the end of the day, if you follow the money, you can actually find the answer like what's really going on? So where does each dollar go? And I just kind of dug deeper and deeper. Okay, pharmacy makes maybe like the processing fee. PBM makes clawback, makes like rebates, and then insurance company depends on how they set up. They may also get some rebate, but most of the time the PBMs are the one that's making money. So I follow the money and that's kind of how I eventually learned the system.

Graham Walker:

Welcome to How I Doctor, where we're bringing the joy back to medicine. Today, I have the privilege of talking with Dr. Simon Chang, a hospitalist and the CEO and co-founder of eNavvi. Thank you so much for joining me today, Dr. Simon Chang.

SC:

Thanks, Graham. Thanks for having me. I'm really looking forward to our discussion today.

GW:

Simon, let's dive right in. You're a DO, you finished residency in 2022, and you were an intern when COVID hit?

SC:

Yeah, my first year was in Long Island, New York where COVID hit around March. So I saw like the wave of COVID from New York City.

GW:

Simon, when did you decide, "Hey, I think I want to make a company"?

An early interest in entrepreneurship

SC:

I feel like I've always been an entrepreneur a little bit like when I was younger, like selling collectible cards to just later on in life, like doing all types of random stuff. Like I like the creative part of the business and so when I was in med school I've known that there are things that I want to do beyond just clinical medicine.

GW:

So as a kid you were selling baseball cards or Magic: The Gathering or Pokemon or what were you selling?

SC:

Magic: The Gathering, Yu-Gi-Oh cards. So okay, I did figure out one thing early on that kind of made me a lot of money as a kid. I was kind of hustling as a kid, like hustling at 12, watching for little things that people don't notice, and kind of lean on it a little bit to figure out, okay, this works.

GW:

So Simon, yeah, obviously a big difference between hustling Yu-Gi-Oh cards and deciding to do something in healthcare. I think a lot of physician entrepreneurs obviously focus on healthcare because that's what we know. But tell the listeners a little bit about eNavvi and where you came up with the idea because certainly a pharmacy or pharmaceutical guide is probably not top of mind for most doctors.

SC:

So I think like every doctor, if you ask any doctor in the country like, "Have you seen a patient that got turned away from the pharmacy or couldn't afford their medication and ended up in the hospital?" I feel like every doctor will say yes, they encountered that. I had the opportunity to go study abroad before I entered medical school. I wanted to take a year to figure out like, okay, what path do I want to go down? I want to have a career that's impactful and really like solving problems in the healthcare field. But I wasn't sure like research or being a clinician would be the way to go about it.

I learned that like in most European country, most developed European country, no patient gets turned away from the pharmacy because drug's too [inaudible 00:02:45] or not covered. We know every doctor in the country in the US knows someone that ended up in the hospital because of not knowing what drugs to cover. And in other countries where no one gets turned away and no one ends up in the hospital because a drug is not affordable or not covered. So what can I do to like tackle some of these low-hanging fruits in healthcare?

GW:

I think probably all of us have seen a diabetic who ran out of insulin or they were trying to spread out their insulin or they couldn't get their glipizide or their metformin or whatever and ended up in the hospital. Probably every single doctor has seen that because diabetes just leads to so many other bad problems. And then how did you decide, I mean the pharmaceutical industry and PBMs and this whole system is extremely complex. I get zero training or understanding of how pharmaceutical benefits and PBMs and what a copay is. That seems also like a really big area to decide, "Oh yeah, I'll tackle this."

To fight pharmacy benefit managers, physicians need to understand them

SC:

Yeah, it's like a black box. I think every doctor knows there's a problem with PBMs, but like what can we do about it. If we don't know how they work, we can't really figure out how to get rid of them or how to work with them. PBM industry and insurance companies, they're all basically control how doctors practice medicine nowadays. So it honestly just took a lot of learning on my own after years about reading, just following through, just trying to understand the whole system, getting formulary, where do they come from? Who sets up the formulary? Does the insurance company set it up or PBM set it up and who's making money? Like at the end of the day, if you follow the money, you can actually find the answer like what's really going on?

So that's kind of what I did. I followed the money of prescription drugs, where does each dollar go? And I just kind of dug deeper and deeper. Okay, pharmacy makes maybe like the processing fee. PBM makes clawback rebates and the insurance company depends on how they set up, they may also get some rebate, but most of the time the PBMs are the one that's making money. So I followed the money and that's kind of how I eventually learned the system.

GW:

This is becoming a common theme. You have to understand all the painful detail of like how the healthcare system works if you want to address it and fix it. And ultimately we physicians are the ones that are seeing all the challenges in the system and the impacts on human beings, on actual patients. So Simon, tell me, tell our listeners, what exactly eNavvi is and how it solves the problem that you identified.

SC:

So eNavvi, it's a end-to-end prescription support platform for doctors. So we kind of built like three products. The first one we did was Formulary Navigator, where we was able to gather like Medicare and Medicaid and marketplace plans and put it up in a website where a physician could go on and just select a plan that the patient has and figure out what drugs to cover, what's the copay, what's the cover alternative. That product was incomplete because PBMs didn't want to release private insurance plans, formulary and costs, so I couldn't finish that product.

GW:

So you're trying to build a product that helps a doctor figure out what medication is cost-effective and is not going to bankrupt the patient and you couldn't complete the product because the PBMs wouldn't tell you what's on formulary, AKA what's cheaper for the patient and the insurer and everybody?

SC:

Yeah, a lot of people get their insurance through work. So a lot of insurance are actually employment-based and employers go through a broker and the broker may work with the PBM, work with the insurance company, and then they may try to figure out, "Okay, what do we want to cover for the formulary?" And they don't want to share that information publicly. So learning that point made me pivot to a cash price marketplace where we just go by cash price medication. You know how much it's going to cost, you can look it up on our platform, kind of like GoodRx, but we add an extra step on top of that where we can e-prescribe. So you know the price as a physician, you can send it in and don't worry about it afterwards.

GW:

So I'm a physician, I've got an NPI number and a DEA number and whatever. I can go on to eNavvi, make an account, somehow I guess I get verified and then I could actually prescribe Lisinopril to you via e-prescribe via your platform?

SC:

Yes. That is the goal of the product. What eNavvi is trying to do first is to give physicians back their autonomy practice medicine wherever they go. So a ability to e-prescribe anywhere on a phone, on a laptop outside of work. And then we allow you to send prescription to our partner pharmacy and our partner pharmacy, our pharmacy who give us their price. So what we're different, it's the insurance group that we, every pharmacy that's listed on our site have price transparency.

Making medicine a side gig, right out of residency

GW:

So you finished residency, how did you decide, okay, I'm going to do eNavvi time full-time and I'll maybe work some, I know you work as a hospitalist kind of on the side. How did you decide, okay, I'm going to do my startup as my main thing and do medicine as my side gig versus the other way around?

SC:

I don't know if it was hard because I kind of knew I wanted to give eNavvi a try. So I do think like one of the benefits of being physicians is that there's no shortage of clinical work. Can I work enough as a hospitalist and then give me enough time off to also work on my startup? First I was working like 10 to 14 days a month as a hospitalist and then rest of the time my startup and for the first two years after I was in residency, I was slowly seeing, okay, how much progress do we make? Are we on the right track and is the product growing? And it wasn't until like the second year where I saw it was clear that okay, there is traction, there is a need, people do want to use this.

And then we were able to get an angel investor. So that also kind of helped me, okay, we are on the right track now, the benefit of being a physician is that I can support myself financially while building my company. I don't have to take money if I don't have to and I can keep on building a product the way I would like it to work for our colleagues. How many shifts do I need to do to support myself and then also give myself enough time to work on my startup. So eventually I landed it at seven days a month as a clinician and the rest of time my startup, that's my ideal setup.

GW:

I think that is a key point that you just said. You were able to use the money that you're earning from practicing medicine to support your ability to be an entrepreneur and you were, it sounds like to some degree, able to pilot eNavvi or start to build it for a year and then figure out, "Hey, does this have legs? Am I going to take a bigger risk?"

SC:

Exactly. I mean I love practicing medicine as well. I do love helping people and if I fail, my fallback is going back to practicing medicine full time. That's not such a bad thing to me.

GW:

Simon, do you find that your clinical practice now still informs either what you build or your opinions or your vision for eNavvi?

SC:

Oh, for sure. To solve the problem in healthcare, you have to understand how it works, how clinicians work, how much stuff we have to do. And now I'm working as a telehospitalist, so we're doing acute care for patients that are not too sick to be at home. And then with that I was able to see, okay, how do we bring equipment to the patient's home? How do we bring medication to the patient's home? You get to see the innovation that's happening. You get to see people try new things and learn about what's working and what's not working. Healthcare is just super complex.

GW:

I think a lot of people outside of healthcare expect that the rules would just kind of make sense. Do you get the sense that this entrepreneurial spirit or this interest in doing something outside of kind of quote unquote, "just clinical medicine", is this a Simon thing or is this a generational thing? Do you get a sense that this is something that your generation of physicians want out of their career?

SC:

I do think that my generation was a generation that was raised under the idea that you can do whatever you want. So I do think my generation is more hopeful in terms of trying to solve problems, but I think it's one thing to have ideas and then the other thing to execute.

GW:

And you're right, you do have to have confidence in your vision and your belief that this is a problem worth solving and that your company has a good solution to the problem as well. Tell me a little bit about your decision to get an angel investor, to get some crowdfunding. How did you decide that's the way I'm going to help to support this business?

Physicians are in a unique position to build healthcare companies

SC:

For me, building a product for physicians, like constantly I'm talking to my colleagues because I have access to physicians. So for the past like three, past four years, I've asked enough physicians for feedback and there's a lot of people who say, "Hey, when you're raising money, let me know. I'll invest." Because like most doctors talk about like investment, like what stocks they're buying or like what real estate are they investing. Everyone talks about investment. So knowing that part and having like people tell me along the way, "Hey, once it's up and running, like if you need investors, let me know." So I wanted to like test it. Like, okay, if I'm building a product for my end users, would they put money behind it even though they're saying they would, would they actually do it? So it turns out like about 70% of the investors so far are physicians and we're growing and they're sharing with their friends. So it kind of like validated the idea, okay, yes, doctors will put money behind something they think will be useful. So crowdfunding was a great way to test that.

GW:

Simon, let me ask you, I know you have a partnership with Mark Cuban's, Cost Plus Drugs. Tell me about how that partnership came to be.

Partnering with Cost Plus Drugs and other disruptive startups

SC:

It was about, I guess a year and a half ago where we were connected with one of their VP of business development at Cost Plus Drugs. Like we showed them, "Hey, we're doing this insurance thing where we show the copay, but you guys have this cash price available and sometimes like some medications are cheaper to pay with cash than copay. So can we partner together where I will list your medications on our site and if it's cheaper than copay, then maybe patients can go to you to get the medications." Their vision of this Cost Plus model and drug transparency, it aligns with what eNavvi is trying to do.

So it was kind of, I mean when we reached out to that, it was kind of like, okay, we're both trying to make healthcare better. We both are tired of this lack of transparency in cost, so let's work together. And it was kind of slowly where we worked with them to get their Cost Plus pharmacy medication on our platform. And now we expanded to Team Cuban card, which is kind of like a PBM coupon code where you can pick up medication at your local pharmacy.

GW:

So I can go on to eNavvi and say my patient has high blood pressure and I can essentially find the, I want to use Lisinopril or Norvasc, whatever it is, I can type that into eNavvi and one of my options will be Cost Plus Drugs for the lowest cost for whatever, 30 days of five milligrams of Lisinopril?

SC:

Yes, yes. And we're in the process of getting single care, which is kind of like GoodRx on board. So that will allow us to offer like basically all the medications and to even CVS, Walgreens, and Walmart. So our footprint will really expand.

GW:

What other things have you learned along this, along this journey?

SC:

So talk to your users, like talk to your users early on and don't listen to just one user. Get enough feedback to know what the real problem is. If you are trying to build something, get an MVP, talk to the end users, talk to a lot of end users to figure out if what you're building actually works. I do think focusing on user experience, user design, especially in healthcare, can get you far because at the end of the day, come on, all of us try to change things in Epic to make it better. I think doctors tried to point out issues, but a lot of us, our feedback are rarely taking into consideration when they're building these tools. So if you take that into consideration first and build a tool for doctors, then I think you have a better chance of succeeding.

GW:

So physicians are obviously really busy people. How have you gotten physicians to give you feedback?

SC:

If I ask you to do a favor for me to check it out, you say you want to do it, but are you going to actually do it that day? Probably not. Not because you don't want to do it because you really are just too busy. So you really just have to follow with them and just find a time to really asking once is not enough. Even though they say yes, follow up with them. I do think if you're a physician yourself, you get more credit, people will do more for you versus a non-physician. So I think that's our advantage where we are doctors, so other doctors will give us the courtesy, but you just have to try and be persistent. Finding a champion too, finding a champion that really believe in your cause and maybe they can ask around, that can also go pretty far as well.

GW:

Simon, let me wrap up here with, we've got some kind of rapid fire questions. What do you wish your colleagues, maybe outside of hospital medicine, other specialties, what do you wish that they knew about what it's like being a hospitalist?

SC:

I feel like sometimes hospitalist has been used as a dumping ground for patients for other specialty where they don't want to take care of the patients and they'll actually find excuses like, "Oh, this patient had diabetes, so we're not going to take this patient on our service." Well, but like end of the day we are all working together. Yes, like we're going to take care of the patients regardless, but sometimes consult us, like we're a team, like we're happy to work with you, but don't dump on it. Don't punt.

GW:

Don't just punt.

SC:

Don't punt. Yeah.

GW:

Don't dump. Yeah. Yeah. What's something you didn't learn in medical school but is crucial to your daily practice?

SC:

In med school we talk about communication skills, but it's different where in a real work environment there's tension, there's history, there's different things and different people have different ways of communicating. So learning how to deal with different personalities and learning like, figure out what each person cares about and how to make everyone work cohesively in the team. Those are soft skills I feel like you learn throughout life where if you played a sport, you work in different jobs. There are a lot of these soft skills working in teams where you don't really get that in med school.

GW:

Simon, what's the most ridiculous thing you've gotten dinged for in residency or as a hospitalist?

SC:

Yeah, so I got dinged for, because I chose the antibiotic duration for 10 days instead of 14 days.

GW:

Who dinged you for that? ID or a pharmacy or...

SC:

No, a different hospitalist dinged me for it after they took over my care. And then basically I had to provide the most up-to-date guideline, which I did 14 days with a negative procal, 10 days and with the downtrending procal that's normalized after five days, that's enough to stop. But older doctors, it's just like medicine... You practice medicine how you've been trained. So if you're always doing 14 days, someone does 10 days, you're like, "Oh, that's not enough." But the new guideline, new practices, new study shows that you can shorten duration based on some data. So I got a dinged for that, but I think I got a P0 for it. So not really a ding, but it's all good.

Hire people with passion for the work

GW:

Simon, do you have a lesson from a mentor or an attending in medicine that still shapes the way you talk to patients? Or think about heart failure or how you practice as a physician?

SC:

You cannot teach passion. You can teach people how to learn knowledge, but passion is what going to make that person wake up every day and do their job. So if you want to work with people, hiring people, find people with passion about the thing they're doing, about the job. So having eight players on your team, you can go way further than someone that will only do what they're told to do. So it's about finding the passion of people to work with you.

GW:

Simon, where can listeners find you and your work and support the work that you're doing?

SC:

Yeah, they can find us on enavvi.com, E-N-A-V-V-I, where you can sign up, see what we're doing. We'll update users at the end of the day. We are building a tool for physicians, so if any physician want to reach out to me, they can find me on LinkedIn.

GW:

Amazing. Thank you, Simon. Again, I really appreciate you taking the time today from your practice and look forward to seeing more what eNavvi is up to in the future.

SC:

Thanks, Graham, really appreciate you having me.

GW:

Thanks for joining me today. For interviews with physicians creating meaningful change, check out offcall.com/podcast. Make an account on Offcall to confidentially share your details about your work and sign up for our newsletter where you can hear more about the latest trends we're seeing in physician pay. You can find How I Doctor on Apple, Spotify, or wherever you listen to podcasts. We'll have new episodes weekly. This has been and continues to be Dr. Graham Walker. Stay well, stay inspired, and practice with purpose.