Launch HN: Evry Health (YC W18) – Better health insurance for companies (evryhealth.com)

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?

Thank you!

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-...

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.

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.

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.

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."

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.

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.

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.

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.

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.

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.

> 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).

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.

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.

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.

I feel this. I pay $500 a month for insurance with a $6000 deductible.

I would have to have more than $12,000 in medical expenses every year before I would break even on this.

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 ;)

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.

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.

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.

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.

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.

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.

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.

> Getting ahead of this and trying to divert patients from this wasteful system is a fantastic and profitable idea for the insurer.

We try to provide on-demand care whenever reasonable and possible. While it increases utilization of things like mental health and telehealth and wellness for us in the short-term, over the long-term it yields benefits in the overall health of the member (especially when considered across a whole population).

> ACA

The ACA brought approximately 40 million net-new insureds into the marketplace who were previously uninsured. It was/is a hugely ambitious law, with (I think) good intentions, that had (to your point) some unintended consequences. Also, many of the initial assumptions going in on the ACA turned out to be far too optimistic.

@arpitrao, we’d love to meetup in Houston. Our @jstartz26 (COO) is based there. Currently we cover SE TX and Houston with a provider network partner, but we growing our directly contracted network too.

And for those of you willing to stick it out and help make change happen here, we are hopeful that our differentiated product, use of technology, and processes will stir dialog and stimulate change. There is a saying "eat the mammoth one bite at a time" or something like that - basically when a problem is so big the best you can do is take it in bite sizes pieces. We - by ourselves - cannot change how everyone gets access to healthcare. We can start small and build from there. Our objectives are achievable and objective in the near term, aspirational in the long term. Thanks for contributing your thoughts to the debate!

There are a lot of opportunities to partner with other innovators / startups. We are always looking for ways to do things differently. For you, it translates into a different experience with greater access and more convenience. It should also mean lower cost because of the shift to virtual and at-home care.

As for who - its a big universe. There are innovations in primary care, gut biome / nutrition, biometrics, physical therapy / activity, sleep, mental health, fertility / family planning, cancer, community resources / counseling, and so on. We have a running list of over 300 companies we have reviewed and have considered in terms of how to include. The hard part is to sponsor a mix that does not overlap too much. We've done that work.