If innovation comes in waves, then the managed care industry may very well be in the midst of a tsunami.
The last seismic shift in the industry was arguably back in the nineties, resulting from legislation like the Balanced Budget Act—which imposed new payment structures, stricter compliance, and increased incentives for efficiency. Health Plan operation and administration was forced to adapt, and even though this period coincided with the explosion of the internet—emerging technologies were underutilized due to the complex and heavily regulated nature of managed care. Fast forward to recent years, and we have an industry that has been on the cusp of disruption for over a decade.
The global prevalence of cloud and mobile technology, the Affordable Care Act, and a steep consumer demand for quality and access have all aligned to catalyze this new wave of technologies and businesses aimed at finally evolving managed care. It’s a perfect storm of regulatory change and technological capability, and talented entrepreneurs have taken notice of the opportunities to improve user experience, efficiency, transparency, and price.
Within our own portfolio, we have companies applying technology to healthcare to improve hospital experience for patients (Docent Health), help individuals and families manage their care (Welltok and CareZone), and even access doctors on demand (Pager). And of course there are the companies specifically making waves around insurance such as Stride Health, which empowers consumers with data and direct access to insurance markets; Collective Heath, which provides a complete healthcare solution through the employer channel; and now Bright Health, which is launching a new kind of individual health plan that will be tightly integrated with local health systems.
The individual and Medicare Advantage markets combined are estimated to be greater than $100B—a massive opportunity no matter how you slice it. The consolidation of incumbent providers (Cigna acquired by Anthem, and Humana acquired by Aetna) has also driven consumer demand for differentiated plan options. Bright Health partners with hospitals to empower them to become EPOs (Exclusive Provider Organizations). This means that patients within a particular area have the opportunity for unified, enhanced access to care, while maintaining some of the flexibility of a traditional PPO (Preferred Provider Organization), and enjoying the lower cost of an HMO (Health Maintenance Organization). This structure truly provides benefits to all constituents:
- Affiliation throughout healthcare chain
- Increased profitability
- Better patient retention
- Less competition
- More affordable
- Better benefits
- Increased accessibility via technology
- Better customer service
Bright aims for its plans to go live in initial launch markets starting in 2017. Partnerships with regional health care networks will allow Bright to power plans throughout hospitals, health centers, surgery centers, physician practices, clinics and more.
As if the market and launch opportunities weren’t exciting enough, the aspect of Bright that shines strongest is the team. At the helm is CEO and Chairman Bob Sheehy, former CEO of United Healthcare and one of the most respected operators in the managed care industry. Bob is joined by President Kyle Rolfing, who brings valuable expertise gained from founding two other successful consumer health startups; one of which, Definity Health, was acquired by United while Bob was CEO.
At a time when Healthcare IT startups have been surfacing at rapid speed, maybe too rapid, we have put a strong focus on being thorough and patient. With an opportunity this grand, we wanted to be sure we partnered with the right company, the one that could best combine technology and experience to drive innovation. Along came Bright Health: more than a health plan, they’re revolutionizing the structure and delivery of managed care. We’ve grabbed our boards and suited up. This is a wave we don’t want to miss.