[HN Gopher] Launch HN: Evry Health (YC W18) - Better health insu...
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Launch HN: Evry Health (YC W18) - Better health insurance for
companies
Hello Hacker News! Mark, Jay and I are the cofounders of Evry
Health (https://evryhealth.com). We are a full-stack health
insurance company that reduces premiums by up to 20% for companies
while improving the health and wellness of their employees. People
and media constantly talk about the problems in our healthcare
system: prices are too high; premiums are rising faster than
household income; health outcomes are lower than the rest of the
developed world; mental health coverage is inadequate; and the lack
of transparency and accessibility creates confusion for us all. All
these are real problems, but they're symptoms rather than root
causes. We believe the root cause is that the U.S. system is rife
with misaligned incentives. For example, the fee-for-service
structure incentivizes overuse and volume-based billing, rather
than health. Thirty-five cents of every dollar spent goes to
clinical waste, unnecessary services, administrative bloat, or
fraud. (We could give footnotes, but doubt anyone needs
convincing.) We're building Evry to realign incentives for mutual
benefit. Our primary plan is an EPO (Exclusive Provider
Organization), which is like an HMO, except you don't have to
choose a primary care physician and you don't need a referral to
see a specialist. We have no deductibles, almost no copays, and
benefits that exceed the best plans from legacy insurers. We pay
most doctors and hospitals based on patient outcomes, not fee-for-
service. Telehealth is available for free 24/7. Members receive a
customized care plan that provides additional resources and offers
cash incentives on a debit card. All this is to remove barriers to
care and improve the health of each member at no additional cost.
On top of that, we reduce premiums by up to 20% for employers. We
can do this because we are a software company that owns an
insurance carrier. We automate roughly half the tasks involved with
claims, care coordination, underwriting and back-office operations.
We aggregate data from disparate sources (claims, clinical, pharma,
lab, and wellness data) to make superior decisions and aid
patients. Our technology helps members identify and treat
conditions earlier and more effectively. We also have a much better
user experience--a single portal to access telehealth, care
concierge, claims data, wellness plan, doctor lookup, rewards card,
etc. The industry is still fundamentally basing prices on 1960s
approaches to accounting (ChargeMaster pricing). 1980s tech and
accounting "advanced" the dialog to Diagnostic Resource Group
pricing. But insurers and hospitals alike are saddled with this
decades old technology and pricing that obscures transparency, adds
cost, and isn't tied to patient outcomes. There are software
businesses that focus on translating ChargeMaster to DRG to the
more recent idea of Reference-based pricing. That is not the way to
use technology to improve health care! We're going much deeper.
The caveat is that so far, we only provide coverage to businesses
with 100+ employees in Texas. We launched in our first market of
Dallas Fort-Worth. That's our beachhead, and we're working on
expanding into new states and markets (It takes a long time to get
something like Evry off the ground--there are large barriers to
entry). Since half of Americans get health coverage through their
employer, we're focused on companies to maximize impact. We've
built insurance, healthcare and fintech companies before. I founded
the insurer that invented per-mile auto insurance ("Drive Less, Pay
Less") and reduced premiums up to 50%. Mark (CFO) is a healthcare
actuary with 30 years' experience ranging from Aetna to Managing
Director in Big 4 consulting. Jay (COO) is a fintech veteran who
started in healthcare working with large hospital systems. What
inspired us to start Evry was that we lost friends and family to
the terrible dysfunction in the healthcare system. We felt we had
the skill sets needed to do something about the problems, and
ultimately decided we had to. There is a lack of innovation in
this space, and many things being tried--shifts to direct
contracting, direct primary care, self-funded programs for
individuals and SMBs--do not address the root problems. They are
temporary price-oriented solutions. These are a form of moving the
ball between cups--prices are better because coverage is impaired
in hidden ways that the average person doesn't discover until it's
too late. There's also a strong debate, of course, about
governmental reforms to U.S. health care. Many support Medicare For
All (MFA) for good reasons. However, MFA on its own may not be
enough to address clinical variation and some of the other root
problems in the system. In any case, in the absence of government
action, we believe private sector innovation can address some of
our shared problems. We'd be happy to discuss this, and the details
of what we're doing, in the comments below. We'd also like to hear
about your own ideas!
Author : aquaphile
Score : 40 points
Date : 2022-03-02 15:33 UTC (7 hours ago)
(HTM) web link (www.evryhealth.com)
(TXT) w3m dump (www.evryhealth.com)
| thallium205 wrote:
| 1) Are there deductibles and co-pays for members who visit an
| emergency room with an out of network hospital?
|
| 2) What is your national payer id? Do you support 837s with
| electronic attachments, 835, 270/271, and 276/277 transactions to
| help providers manage claims? What about corrected claims?
|
| 3) What kind of contract would an in-network provider expect to
| get from you all? Some kind of capitated/case rate thing?
|
| 4) Are you all using any third party administrators to do the
| dirty work of negotiations?
|
| _Edit_
|
| 5) Who is reinsuring you in the event of big losses?
| [deleted]
| jstartz26 wrote:
| 1. There is a $300 copay for an emergency room visit (both in-
| network and out-of-network). This is actually our only copay
| period. It is to encourage people to only use emergency rooms
| for emergencies. There are no deductibles for our primary plan
| though we do offer a HDHP as well (for employers with HSAs), so
| for the secondary product a deductible does apply. Emergency
| care is always covered as an in-network benefit and no copay
| would apply for inpatient care/admissions.
|
| 2. Payor ID is EH001. Yes to all except 276/277 for right now.
|
| 3. Naturally, this depends on the type of provider. We work
| with our providers to contract on a basis that is comfortable
| for them. Not all physicians are ready to accept something like
| capitation. We collaborate with physicians on the quality
| parameters to track. Some agreements are done as bundles for
| the entire episode of care. Some agreements are case rates or
| capitation payments. Some are still benchmarked off of Medicare
| but tied more closely to patient outcomes. For example, with
| primary care doctors we target avoiding poor control of
| diabetic A1C levels to be below 15% and to do depression or
| anxiety screenings for more than 80% (among other metrics).
|
| 4. Nope. We contract directly and do all the claims processing
| ourselves. Sometimes that means negotiations can take awhile
| (for large health systems) but it almost always means we reach
| favorable terms with a mutually beneficial structure.
| ahstilde wrote:
| > We believe the root cause is that the U.S. system is rife with
| misaligned incentives. For example, the fee-for-service structure
| incentivizes overuse and volume-based billing, rather than
| health. Thirty-five cents of every dollar spent goes to clinical
| waste, unnecessary services, administrative bloat, or fraud. (We
| could give footnotes, but doubt anyone needs convincing.)
|
| This is exactly what caused me to launch Wyndly
| (https://www.wyndly.com). It's simply not profitable for the
| existing medical infrastructure to offer our treatment through
| insurance, so there's an inherent inefficiency.
|
| It's awesome to see someone pushing this forward.
| jstartz26 wrote:
| Wyndly looks great. Allergies are a tricky problem to solve for
| a broad population. Why do you say it's not profitable? Is it
| because you are being asked by health plans for an expected
| ROI?
| troygoode wrote:
| Hey we're launch buddies. :-) Congrats on the launch!
| jstartz26 wrote:
| Thank you!
| jedgardyson wrote:
| Congrats on the launch! This seems like a great beachhead / GTM
| strategy for an insurer to get off the ground.
|
| Curious about the footnotes you mentioned: "Thirty-five cents of
| every dollar spent goes to clinical waste, unnecessary services,
| administrative bloat, or fraud. (We could give footnotes, but
| doubt anyone needs convincing.)" Is there any one good source, or
| a few good sources, on this breakdown?
| mjamilkowski wrote:
| There are several studies and analysis about waste in the US
| healthcare system. This one gives a great overview and
| summarizes several other studies as well.
|
| https://pubmed.ncbi.nlm.nih.gov/31589283/
|
| The waste usually comes down to (1) variation in clinical
| approaches, like a heart patient being treated differently by
| several different doctors, (2) administrative inefficiency,
| such as transposing from paper or using fax machines, and not
| working collaboratively, (3) abuse and fraud, like we saw in
| the news recently.
|
| Here's another one along the same lines about clinical
| variation
|
| https://www.bcbs.com/the-health-of-america/reports/study-of-...
| rmellow wrote:
| > We pay most doctors and hospitals based on patient outcomes,
| not fee-for-service.
|
| Wouldn't doctors be incentivized by this fee structure to walk
| away from difficult cases, where a treatment is risky but is the
| last hope for the patient, if they won't be paid for the likely
| bad outcome?
| aquaphile wrote:
| Good question, and thank you for asking it. The short answer is
| No.
|
| We have "escape" codes to make sure the doctor is not
| penalized. For example, if there is a risk of embolism or if
| there is an aneurysm complication during surgery, then the
| payment reverts to a fee for service. The point is to ensure
| patient safety and high quality of care, not penalize the
| doctor for events not in their control.
|
| If the care being sought is highly experimental or risky, we
| work with physicians to determine if there are centers of
| excellence that may provide higher quality of care.
| throwawayboise wrote:
| Any fee structure will have certain incentives; it's
| unavoidable. The trick is to try to find incentives for the
| providers that also align with positive results for the
| patients.
|
| Having the actual results align with the intended ones is
| easier said than done, as anyone who has ever tried to design
| and administer any kind of measurement-based compensation or
| bonus plan will tell you.
| mjamilkowski wrote:
| Yes you are right - And we recognize this as part of our
| outreach and contract development efforts. Our collaboration
| seems to be working and we are getting great reaction from
| physicians. We believe in a simple approach to keep it
| understandable and easy to administer to build that
| relationship
| lotsofpulp wrote:
| > The trick is to try to find incentives for the providers
| that also align with positive results for the patients.
|
| That part is easy.
|
| The hard part is aligning providers, patients, and the
| payers, since the patients cannot afford to align the
| providers with themselves. Enter politics, because you are
| now distributing limited healthcare resources with demand far
| greater than supply, meaning you have to either pony up more
| from the payers and/or ration various quality of healthcare
| to various populations, per their political power.
| dmcgee wrote:
| Good observation. This already happens within certain hospital
| systems, based on "protecting the numbers". So for instance a
| surgeon not wanting to take on a patient because it is a likely
| mortality on their record.
| mgkimsal wrote:
| > We believe the root cause is that the U.S. system is rife with
| misaligned incentives...
|
| Involving "employers" is one of, if not the primary, root causes.
| I understand you're building a business, and ... you're playing
| in the same space as others. That may make sense financially, and
| allow you to take away from business from legacy insurers and
| save some companies 20% on existing costs.
|
| But this doesn't seem like it's getting at the actual root
| problem, which is most people aren't actually involved in buying
| or paying for medical care (or... not until it's overwhelming).
|
| I realize this is a national political issue, and not something a
| startup can actually address. The large companies, which could
| affect real change, have no incentive to legislate themselves out
| of business.
|
| This (employer-provided health insurance) seems a perpetually
| intractable problem and seemingly unique to the US (based on my
| limited understanding of the problem space).
|
| As a self-employed person, I'm basically an outlier and generally
| get little day to day benefit from any 'health insurance'. I paid
| $900/month (2 people) last year. 2nd covid shot caused a
| blackout, and I was ambulanced to an ER (I was actually only
| 'out' for less than a minute, but in less than 5 I was being
| driven away). 3 hrs in ER - nothing obviously wrong, so I was
| released. I got multiple bills over the next month for $4000.
| Insurance company graciously 'negotiated it down' so I only had
| to pay $2000, on top of the $11000 I already pay for this 'deal'.
| mjamilkowski wrote:
| I'm sorry to hear about the bad reaction you had to the vaccine
| and then the terrible experience you had with the care system.
| You are correct, individuals do need to have better
| understanding and connection to the cost of care, and the cost
| dialog is convoluted and lacking transparency for a long list
| of reasons. We are operating within the system but are looking
| to change it. What we can change is how you, as an individual,
| receive value from your insurance company. The most obvious way
| is to be protected against the super high cost of some
| catastrophic circumstance, like a massive heart attack or
| surgery. But another way to receive value is through incentives
| and rewards that support you in your pursuit of wellness,
| whatever that means to you, as well as making it easy for you
| to get access to things that are of interest to you that
| individuals or smaller employers do not typically get access to
| because there are no economies of scale to encourage these
| vendors to offer their products and services to the retail
| public. I understand and appreciate your pain as a self-
| employed or small group.
| mgkimsal wrote:
| > We are operating within the system but are looking to
| change it. What we can change is how you, as an individual,
| receive value from your insurance company
|
| But only if this is something an employer pays for.
|
| I understand it's a big problem, and you'd like to make
| changes to the system. I wish you good luck in your efforts
| :)
| mjamilkowski wrote:
| We are embedding several programs into the benefit plan and
| still charging a lower price. We think its the best
| solution to the employer demanding positive ROI on the
| disease management and telehealth based solutions
| smith-kyle wrote:
| Can you speak more to the "free mental health coverage"? I assume
| this includes psychotherapy.
|
| What kinds of therapy are covered? How did you build your network
| of therapists?
| aquaphile wrote:
| Chris (CEO) here. We approach the mental health dialog
| differently. We consider access to mental health to be an
| extension of primary care, a fundamental piece of the care
| continuum that is needed to sustain people in their pursuit of
| health and wellness. As a result we have not only contracted
| with physicians directly in the market but have also expanded
| access to care through teleheath and telemedicine solutions. We
| had a press release recently about the innovations we are
| making in this space (see https://lnkd.in/dDCTGaYs.
|
| "free mental health coverage" -> We combine our network of
| therapists and behavioral facilities with online digital health
| solutions that have their own providers. In person therapy is
| included as preventive care. No copay, no deductible, no
| limitation. We combine that with targeted digital solutions for
| specific mental health conditions (burnout, depression, stress
| management, etc.) These solutions, again, are made available to
| members usually without any costs (except for very specific
| programs). Engagement and participation is incentivized and
| rewarded with cash on their Evry card. We are making an effort
| to make therapy - of all kinds - accessible, convenient,
| affordable, and effective (whether digital or in-person).
|
| How did we build our network of therapists? -> Same as the
| medical providers (see other Q&A in this post). It requires
| time and "boots on the ground" having conversations, building
| trust, and creating contracts that avoid the traditional games
| played by both sides. We've had good success getting digital
| networks to work on PHQ-9 type metrics and outcomes, sometimes
| with 100% of payment being tied to a tangible improvement by
| the patient.
| adewinter wrote:
| > We pay most doctors and hospitals based on patient outcomes,
| not fee-for-service.
|
| I'm curious how you convinced providers to bill based on outcome.
| The metric seems very hard to quantify. How are the outcomes
| measured? How are chronic conditions handled (e.g. there is no
| clear resolution to the underlying issue)? Is it a sliding scale
| or a binary? What happens when a pt visit does in fact involve
| expensive labs and procedures?
|
| Anyway, congratulations on the launch! I'm a huge fan of anyone
| trying to improve the healthcare system.
| thallium205 wrote:
| Typically what they do is pay one time for a particular "case".
| So if you came into the doctor's office consecutively for the
| same symptoms for a week straight, they'd treat that as an
| episode of care and pay it as if it's one visit.
|
| Another strategy is to pay a flat rate for seeing a patient. So
| if they come in once or come in 20 times that month, they get
| paid the same.
|
| For hospitals what they like to do is pay only on discharge
| events. So again if you had a 9 day stay vs a 2 day stay, it's
| the same. They particularly like this because the third party
| hospitalists and all outpatient care have a difficult time
| getting the discharge data out of the hospital system resulting
| in many denials from the payers.
|
| This is by no means an exhaustive explanation of "value" based
| care.
| mjamilkowski wrote:
| Thanks for the great summary!
| mjamilkowski wrote:
| thallium205 does a great job of summarizing some of the common
| approaches insurers have used to try and get outcomes to be
| part of the payment of care delivery. We find that most
| physicians have not been asked what they consider to be
| critical outcomes related measurements and benchmarks. We are
| approaching the physicians we contract with on a basis of
| partnership rather than combatant, and as a result we have been
| able to achieve direct physician contracts with value-based
| metrics and payment components that they are comfortable with.
| We have the technology and analytics to support the timely and
| accurate reporting of the emerging experience to support them
| because quite frankly we are only successful if they are as
| well. To the point about chronic patients, we support the
| physicians with extensive care coordination capabilities and
| analytic support to identify gaps in care, opportunities for
| broadening the clinical team, and to leverage efficient
| solutions in telemedicine. We make sure all of the efforts are
| being communicated back to the primary care and/or specialists
| so they know what's going on with their patient when their
| patient is not in their office.
|
| There is a long way to go however because there is not a lot of
| trust and there are significant technology barriers. We believe
| our approach is a breath of fresh air.
| tstegart wrote:
| Have you thought about allowing different, unrelated employers to
| combine to insure one person? A lot of people find that a part
| time job does not give them enough hours to be insured, so they
| get a second job, but don't get enough hours there either, and
| end up working 40 hours with no insurance.
|
| What about allowing different employers to pay parts of
| insurance, and another employer pays another part, to allow the
| employee to get insured?
|
| A person just needs to come up with any amount of employers
| willing to pay the amount that adds up to 100% of the cost.
| aquaphile wrote:
| Chris (CEO) here. I'm not aware of anyone that has created a
| model to fractionally insure a single person as you have
| described.
|
| There are models and mechanisms for multiple smaller employer
| groups to band together. For example, association health plans
| are common with professional trade groups.
|
| While an interesting thought experiment, no, we have never
| thought about multiple employers combining and contributing to
| insure a single individual.
| tstegart wrote:
| Would it be difficult? If you market to consumers, you could
| give businesses a cost over the phone just like any other
| business, just on a per person level.
| aquaphile wrote:
| A pooling mechanism is needed. Additionally, the pooling
| entity would want to meet (or make sure the various
| fractional employers trying to insure "Hank" meet) federal
| ERISA requirements for the favorable tax treatment of
| paying a fractional employee's fractional health insurance
| premiums.
|
| The next challenge is non-payment of premium. Lets assume
| Companies A, B, and C each respectively insure "Hank"
| respectively for 50%, 25%, 25%. They respectively pay $50,
| $25 and $25 per month in premiums to PoolingEntity. What
| happens when any of A/B/C fail to pay a premium? The
| insurance contract would eventually be terminated for non-
| payment (after a statutory notice period), and poor Hank
| would be back to being uninsured.
|
| Technologically, I think it could be done. But the legal,
| regulatory, and administrative complexity would need to be
| addressed.
|
| Separately, a great resource for reading up on where/how
| Americans get their healthcare coverage is the Kaufman
| Family Foundation. Many Americans have more than one source
| for their coverage. https://bit.ly/3KazKNN
| [deleted]
| erehweb wrote:
| You say that MFA on its own may not be enough. What would be
| enough? What do you think we're missing that other countries
| have?
| jstartz26 wrote:
| I wouldn't necessarily say we're missing something that other
| countries have. Each system has strengths and weaknesses.
| Reform on this scale is difficult to do correctly even if your
| major political parties can compromise and work together on
| something.
|
| Personally, I'm more excited about the potential of MFA than
| Mark; however, I'm equally frustrated by the national
| conversation around it. It's a political battleground and the
| public debate lacks nuance or depth. MFA, in my opinion, solves
| a set of problems and introduces a set of unknown problems
| while doing nothing for certain root issues (clinical
| variation, potentially avoidable events, etc.). The focus on
| who pays and taxes is a very small part of a much larger
| conversation and many of the voices talking about it lack
| industry knowledge or experience. But the same can be said
| about a bunch of different controversial issues right now and
| I'm off topic.
|
| To actually get to your question - it's MFA+Medicare reform+a
| whole bunch of other reforms related to the delivery of care.
| MFA is not enough because it's just one piece of the puzzle. If
| we're missing anything as a country, is a political environment
| that would make this sort of widespread societal reform
| possible because it truly isn't as simple as switching to
| single payer.
| mjamilkowski wrote:
| Hi - Mark (Chief Actuary) here. Now we're talking.... _rolls up
| sleeves_ ...thanks for asking the fun question.
|
| Medicare for All (MFA) is a proposal to provide the Medicare-
| based basic basket of medical services as a baseline for health
| coverage. The common assumption is the reference here is the
| scope of services covered by Medicare Part A and B (hospital
| and physician related services, respectively). This is a
| limited basket of services. For example, there are restrictions
| on how many nursing days or physical therapy sessions, and it
| does not cover drugs. There is no oversight in the form of
| quality in its current form. There are thousands of search
| results for the search terms "OIG" and "Medicare fraud".
|
| And cost - _rolls eyes_ Funding is a political nightmare
| because of the need to increase taxes and likely a need to
| adjust physician fee schedules upwards (I.e. the inherent cost
| to CMS becomes higher). Most physicians look to charge
| commercial based business as much as 4 times what Medicare pays
| in order to offset what they believe to be as inadequate rates
| set by MedPac. That dynamic would not be sustainable in a
| system where Medicare was being used for everyone's basic care
| needs.
|
| We said MFA by itself may not be enough because it does not
| address clinical variation in care delivery or just quality of
| care in general, it does not address prevalence of fraud, and
| it does nothing to address the cost issue. We all would end up
| spending an extra $10,000 a year on taxes for what would likely
| be inadequate health benefits and still end up buying private
| insurance just like current seniors do with Medicare
| Supplemental Plans. BTW - the most popular MedSupp plans are
| Plan F, G and N, all of which cover the deductible of Part B
| and add pharmacy coverage.
|
| Comparisons to other countries is tricky because most other
| countries work from an appropriations model, I.e. in United
| Kingdom the government sets the budget for the National Health
| System, and the NHS in turn sets the budget for each region,
| which in turn sets the budget for each hospital in that region.
| If you need a knee replacement inside the NHS, the hospital you
| live near may not have the budget to buy one or you do not meet
| the priority based guidelines, you will be put in queue to
| wait. Its not an approach we have patience for, but hopping
| (!?) on a plane to get one in another country is not covered.
| As you can see, comparing countries health systems is difficult
| at best, and even misleading.
| aquaphile wrote:
| Chris here. Medicare is the current lightning rod, but in the
| US we have several federal health plans: 1. Medicare, 2.
| Medicaid, 3. Federal Employees Health Insurance Program, 4.
| Department of Defense / TriCare, 5. VA
|
| Personally, I'd love to have what we had as kids in DoD. As a
| kid in a US-military household, I had the benefit of full
| healthcare and dental care and vision care. Our great
| healthcare was paid for by taxpayers who funded the DoD's
| budget. Each child, irrespective of their parent's
| income/rank/station/race, received great care. Personally, as a
| society, I wish we could all agree that every child and young
| adult should receive healthcare without obstacles or payment
| fears.
| randomsilence wrote:
| Harvard Business Review on the disbanding of Haven, the venture
| to disrupt U.S. health care formed by Amazon, Berkshire Hathaway,
| and JPMorgan Chase:[1]
|
| >Perverse incentives. We still live in a world where the larger
| portion of hospitals' beds that are utilized, the more they get
| paid. Consequently, the U.S. health system is focused on treating
| sickness rather than preventing illness in the first place.
|
| It seems like your root cause analysis is broadly known. Do you
| expect the market to shift quickly once your approach gains
| traction?
|
| [1] https://hbr.org/2021/01/why-haven-healthcare-failed
| aquaphile wrote:
| Chris (CEO) here. Thanks for the HBR citation regarding
| incentives. I can hope the market will someday shift quickly,
| because that would benefit more people more quickly.
| Realistically, though, I think it will take at least 10-20
| years for a broad shift in the market. Large organizations
| (such as legacy insurers) are very slow to change - even when
| it is in their long-term interests.
| mjamilkowski wrote:
| I have a different take. Haven was an attempt to get 3 large,
| very different, groups to reach consensus on some very
| contentious issues. It was akin to asking everyone at the
| Thanksgiving dinner table to agree on a political issue.
|
| Were they able to come to consensus on anything? There was
| going to be winners and losers if they changed benefit plans to
| be on a common platform across all 3 organizations. Maybe one
| organization had more losers than winners.
|
| Then Haven made the Great Vaporware Mistake with a huge public
| relations and marketing campaign before they actually did the
| hard work.
|
| Then reality set in.
| lotsofpulp wrote:
| I do not understand how that analysis fails to mention the root
| problem of extremely high demand relative to supply of high
| quality healthcare. And of course, tort reform because there
| needs to be a ton of cover your ass work in the US.
| yowlingcat wrote:
| Very interesting. Couple questions:
|
| 1) I can see how this model works with an EPO, but do you plan to
| build any products that would necessarily support OON like
| PPO/POS? How does the model work there once you have to integrate
| with the rest of the healthcare value chain that may not see eye
| to eye with you right now or for a while (at least until the
| government forces them to)?
|
| 2) How do you package the pharmacy benefit? Are you aiming for
| employers that carve out the pharmacy benefit anyways, or for
| employers that need it packaged into a fully insured plan (which
| is common at the 100 lives size)?
|
| 3) What approaches are you considering for go to market? Are you
| going to scale up direct sales to the employer (direct but
| costly) or consider other approaches, and if so, what?
|
| I love seeing innovation in this space. You're right to call out
| the issues with self-funded programs for individuals/SMBs for not
| addressing the funny business in contracting. On the other hand,
| if you're building a provider network from scratch and not
| layering in someone else's, you are going to run straight into
| the existential risk of cold-start scaling up a two sided
| network, so I am curious how you are planning to avoid that.
| mjamilkowski wrote:
| Product: It is possible that in the future we would roll out a
| PPO based product to have a broader out of network option.
| Right now we do not have any plans to do so. Our target
| employer groups are focused geographically which fits nicely
| with our EPO approach. Sales to larger groups and greater, or
| prolonged work from home trends, may accelerate our
| consideration of PPO product development.
|
| Pharmacy benefit: We integrate the pharmacy benefit into the
| overall benefit plan. We are selling a full package, and to
| fully insured groups. We work with a great, NCQA/URAC
| accredited national pharmacy benefits manager. I think we
| provide pretty good pharmacy benefits (broad network,
| comprehensive formulary, decent prices) but it has been an
| interesting process to standup. Still not a lot of price
| transparency (even for the insurer). There is broad opportunity
| in this space for other players.
|
| Sales: We are using a combined approach of direct and brokered
| sales efforts. As Jay responded to another question, we have
| been expanding our broker relationships.
|
| Network: I am not sure I understand what you mean by two-sided
| network. We are building our network from scratch, which
| enables us to establish relationships with physicians and
| collaborate with them on the outcomes-based approach we prefer
| to use in our contracting. We use a national network to wrap
| around the direct contracted network so there is national
| coverage for emergencies. We do not believe high deductible
| plans and pervasive use of high copays translates into
| effective consumer use of healthcare services because at these
| levels the cost to the individual has become punitive and
| encourages delaying care not accessing care. incidentally, we
| have had a couple of self-insured employers' express interest
| in our approach because even with the high deductible plan,
| their stop loss expenses were so high that the combination of
| self-insured administration fees and stop loss protection was
| just as expensive as being fully insured (as we offer better
| benefits and more care support).
|
| There are employers and physicians that don't see eye to eye
| will not want to work with us on this basis. Regardless we have
| built a network that satisfies all regulatory requirements.
| Some things will always be more expensive because of the
| specialization. Neonatology, for example, will always be
| extremely expensive for us because of the limited number of
| medical providers.
| acesohc wrote:
| Congrats -- great post, new health insurance options are much
| needed! How did you assemble your provider network and how do
| major hospital options compare to other major carriers (eg. BCBS
| Texas PPO)? Does this EPO plan offer any out of network / outside
| of Dallas coverage? What is your target employee demographic? How
| has your experience been getting brokers to distribute this new
| plan?
| aquaphile wrote:
| Thanks! We've built our primary network ourselves. We have
| about half of the major regional hospital options working with
| us, as well many of the top specialist provider groups. It's
| narrower than the network of a BCBS but growing rapidly. An EPO
| does not support out-of-network coverage but we do handle out-
| of-area through a partner, so people don't need to worry while
| traveling, etc.
|
| The target employee demographic is younger/Millennial focus but
| we'll work with any employer group that has 100+ employees.
|
| For distribution, it took time to build trust with brokers. We
| went through a lot of introductions and meetings to find people
| we trusted, and to help them also trust us. It required a lot
| of personal interaction. Currently, we work with two commercial
| brokerages, and will continue expanding and growing our broker
| relationships. We are "broker-friendly."
| jedberg wrote:
| Do you have any plans to white label your software and license it
| to other providers?
|
| For example I use Kaiser, which is basically "full stack" where
| they are both the insurance and health provider. The upside to
| that is that they are big on preventative care, since they are on
| the hook for the cost if you get sicker.
|
| But their software still sucks, especially their billing
| software. I just lost my insurance for a week because of their
| billing mistake, and it took me a week to get it fixed (and it's
| still not settled but at least my insurance is active now).
|
| So for example I'd be really happy if Kaiser had better billing
| software, and they probably would too because their costs would
| go down.
| aquaphile wrote:
| Chris (CEO) here. What happened with your billing software
| experience is unacceptable, but it isn't the primary use case
| we are solving for.
|
| Yes, we'll happily white label/license our tech to other
| insurers, TPAs, etc. We can license tech, and we can also act
| as a TPA. We built the technology to solve our own problems,
| but in effect and to your point, we've created a platform that
| others could leverage. If other players want to imitate us or
| leverage anything we've built - great - it's a business
| opportunity for us and it helps more people.
|
| If Kaiser calls us and wants to use our software, we'll take
| their call ;)
| slashtom wrote:
| Curious on your medical and pharmacy trend combined, how does it
| compare to other insurance carriers like Aetna, United, Kaiser
| Permanente, etc.
|
| There is only so much you could do on the
| administration/retention side of the cost puzzle, I believe for
| KP it's around 3-4% of the total PMPM, a lot of the cost savings
| will come from
|
| 1) not participating in the government programs (medicaid,
| medicare, aca), which the commercial market largely subsidizes 2)
| controlling the provider costs, how much control/influence do you
| really have with a small membership base to negotiate from?
|
| Interesting concept, I think the legacy carriers are working to
| improve their tech stack and providing this on-demand type of
| care. I wish you a lot of luck!
| aquaphile wrote:
| Thank you!
|
| Medical + Rx trend: Our trends are a little lower than the
| published trend figures because of the shifts we are creating
| through embedded telehealth and telemedicine solutions. For
| competitive reasons, we cannot disclose exactly how much lower
| but it is substantial.
|
| Admin cost savings: A regional Blue Cross Blue Shield plan
| typically spends 12-15% of their revenue on general and
| administrative expenses (G&A). That number does not include
| Sales expenses - it is pure G&A. We are confident in hitting 4%
| or 5% thanks to all the technology we've built and automated,
| and we pass through the savings to our customers.
|
| Controlling provider costs: It's not all about controlling
| costs. You're certainly correct that our rates across the board
| would be better if we had a large membership base to illustrate
| how our programs help physicians be successful and encourage
| broader collaboration on the care coordination efforts that
| drive better outcomes and higher quality. Sometimes we end up
| paying more for a procedure. That's okay and working as
| intended! Good doctors should get paid more; bad care should be
| worth less. But even if we pay more for certain care, if
| outcomes are aligned and the patient is healthier, it will
| generate a financial return for us across a population. We
| offer up to 3-year rate lock-in agreements for employers so we
| can still capture the savings of, for example, reduced
| readmission even if it doesn't occur immediately.
|
| Legacy insurer efforts: Legacy insurers are attempting to
| address the situation, but their patchwork efforts cannot
| address the fundamental chassis that they are tied to. That
| legacy infrastructure and broader employment base is not easily
| transitioned to modern technology, value-based care, and
| virtual business models. Also, the innovation-based pilots they
| roll out may impact one market, like a specific city, or a
| specific market segment, like Medicare membership, and one
| service, like pain management for arthritis, but they are not
| necessarily rolling out solutions that impact their whole
| population. At the end of the day, the current system is not
| sustainable.
| pierre wrote:
| First of all congrats on the launch, we need more innovation in
| the space and I applaud your efforts. Here are some thoughts /
| questions if you want to answer them
|
| > We have [...] benefits that exceed the best plans from legacy
| insurers.
|
| You claim that your product is better than some of the
| competition, but do not demonstrate it (here or on your website).
| At this point it seems to me that every insurer claim that they
| have the best plan with no way for me to know easily.
|
| I think the key issue of the industry as a whole is that there is
| no way for client to compare insurance product beyond pricing. A
| product that could look better at covering lenses for example
| because it cover up to $2000/year vs another that cover up to
| $350 may actually be worse because of some widely applicable
| exclusion written into the contract.
|
| What are your thoughts on this point?
|
| > On top of that, we reduce premiums by up to 20% for employers.
| We can do this because we are a software company that owns an
| insurance carrier. We automate roughly half the tasks involved
| with claims, care coordination, underwriting and back-office
| operations. We aggregate data from disparate sources (claims,
| clinical, pharma, lab, and wellness data) to make superior
| decisions and aid patients. Our technology helps members identify
| and treat conditions earlier and more effectively. We also have a
| much better user experience--a single portal to access
| telehealth, care concierge, claims data, wellness plan, doctor
| lookup, rewards card, etc.
|
| You claim to be able to reduce cost because of your tech, and I
| believe compare to legacy carrier, your IT / Process are cheaper
| to run today (I believe that legacy carrier spend ~5-10% of their
| revenue on IT). From my observation the insurance industry is
| quite bad at getting ride of legacy systems (for compliance, once
| you decommission a system you sometime need to prove that the new
| system run the old policy the same way, or just because to many
| process optimisation software has been build on top of the legacy
| system making it extremely costly to sunset). How do you plan to
| maintain this cost down once you extend to new states / product
| /over time, to keep this cost advantage?
|
| > Since half of Americans get health coverage through their
| employer, we're focused on companies to maximize impact.
|
| I understand that B2B distribution is easier than B2C, but this
| can go against your mission of changing healthcare incentives for
| mutual benefits. You customer are the Employers, and their
| incentives are to reduce cost and to maintain their employee
| healthy short term, whereas employee would like to have better
| access to healthcare (higher cost) and to stay healthy Long term.
| How will you find balance here? What happen when a a major client
| as you to cut cost for their plan to the expense of the employee
| coverage and you need to keep them as a client to keep the
| company afloat.
| jstartz26 wrote:
| Product comparison: that's fair - only so much you can fit in
| an announcement post. We completely agree it is difficult to
| compare benefits (even for competent HR departments) but it is
| even more confusing for individuals. We try to make this
| clearer and transparent when working with employers during the
| quoting process. Benefit coverage gets boiled down to
| "actuarial value" and quantified as a number relative to the
| benefits mandated under the Affordable Care Act. This is
| presented alongside the financial quote and compared to
| competing bids. It also helps to actually read through our
| Schedule of Benefits Coverage- even at the individual level it
| is apparent what the differences are in our benefit plan vs
| every other SBC we have seen.
|
| If you were to judge the quality only by price (all else
| equal), underwriting for this segment is done at the employer
| level - so savings can vary significantly from company to
| company. We've had quotes that matched other bids, and we've
| presented offers as much as 35% less (on a cash basis, not
| actuarial) than other insurer's annual price hikes.
|
| Overall, I cannot agree more with your comment that comparison
| is hard. There is not a lot of transparency in this market
| segment because of the unique considerations that go into
| underwriting each group. Plus, a lot of the companies (startups
| included) that people find appealing are playing games with
| coverage, especially playing around with deductibles and
| copays. It's currently very difficult to make it super clear
| without just sitting down with the person/employer and talking
| through the benefits.
| pierre wrote:
| Regarding product comparaison it is possible to build a
| computable model of your policy and the major competitor, and
| from there automatically benchmark them to find key
| difference in coverage (what is the maximum delta) or running
| them through a set predefined claim scenario. It will however
| require ~3-5 day of work per policy to build the models.
| Beyond the marketing effort this models can also be reused
| for risk management / claim management / leakage prevention
| if implemented right.
| [deleted]
| [deleted]
| mjamilkowski wrote:
| Yes it would be possible - and I know of a couple of
| benefits consultants that have tried to do this, but bias
| and independence is a vexing issue. Keep the ideas coming!
| aquaphile wrote:
| > How do you plan to maintain this cost down once you extend to
| new states / product /over time, to keep this cost advantage?
|
| You are correct that the legacy insurance industry struggles
| with tech and compliance. I've had the fortune (misfortune?) of
| being a part of writing and managing policy, claims, rating,
| and other insurance systems. It is common for a large, legacy
| insurer to have tens of policy systems and tens of claims
| systems operating in parallel due to many years of acquisitions
| and mergers.
|
| Technology is a huge part of our cost advantage, but it isn't
| the only factor. We also benefit from our product design,
| underwriting, provider network structure, etc.
|
| Technology automation and efficiency allows us to a) lower G&A
| about 10 points and pass through the savings to our customers,
| and b) reduce delays and duplications in care.
|
| The pure technology cost actually decreases for us over time,
| on a PMPM basis, as we grow membership. Adding new states and
| products doesn't require new systems for us. We just have to
| make some configuration additions. Architecturally, we've built
| a federation of micro-services and we host on a cloud provider
| (Azure).
| mjamilkowski wrote:
| For B2B, it's worth noting that most Americans still receive
| their health coverage through employers, and this is especially
| true for the 200-2,000 company size segment. Meeting the
| majority of people where they are seems to be a reasonably
| impactful way of starting change. We can make a considerable
| impact for companies with 100 employees. We can make a massive
| impact for companies with more than 400. We currently are not
| geared to do much for individuals, but we'll get there.
| https://www.kff.org/other/state-indicator/total-population/
|
| B2B is scalable for launch, giving us access to information and
| leverage that is not achievable in the individual space without
| significant expense and economic loss. Starting in this market
| segment gives us a profitable platform to expand into other
| coverage areas and consider adjacent market segments. That
| said, we believe our approach which is intensely focused on
| quality will drive cost savings that satisfy employers. The
| 3-year rate-lock option helps to demonstrate results and builds
| confidence in our approach without demanding changes to plan
| designs that may be injurious to the employee's long-term
| health.
|
| I'm not sure I completely follow your question about changing
| coverage to keep an employer to keep the company afloat. Our
| plans are approved by the state and we cannot change benefits
| during the year. We cannot slash benefits to reduce costs to
| keep a client. That would be detrimental to the employer's
| business model too because it would severely impact their
| ability to attract and retain talent. Trying to reduce benefits
| would have the opposite effect and increase costs, like the
| delays caused by high deductibles.
| pierre wrote:
| Thanks for your answer. I'm not American so not really
| familiar with your health system. Agreed that B2B will be
| easier to scale given acquisition cost. However scaling with
| corporate client limit you in your ability to do good risk
| selection as I believe you will have to accept all employees.
| mjamilkowski wrote:
| Underwriting a whole group actually gives us protection
| from risk selection and creates a more population based
| risk which is more stable. Yes there will be individuals
| that have extreme expenses, which is why we have
| reinsurance. It is the principle of risk pooling and
| credibility.
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