Healthcare x Fintech

Healthcare is the second-biggest line item on most companies’ P&L statements. The typical small business founder spends 60 hours a year managing their employees’ healthcare. But even though they’re spending all this time and money, the employee experience is still really bad.

There are these really powerful healthcare payment rails—the HSA, FSA, HRA—but everybody’s eyes glaze over when you start talking about them. So even though in theory, you can create compelling discounts from this alphabet soup of healthcare, the technology on the fintech side is holding us back from mass adoption.

I was exposed to the healthcare system early on—I lost a parent to cancer when I was 6. So I knew from a very young age that this is where I wanted to make an impact. When I met my cofounder, we talked to a bunch of patients and the same thing kept coming up: Paying for healthcare is really painful, whether that’s understanding a bill, affording a procedure, or just figuring out how to save for it.

Founders should be able to give their employees great healthcare in less than 10 minutes. Our platform aggregates the payment rails around the movement of money; we see financial technology as the secret sauce to increasing access to care. So instead of having to talk to an insurance broker or poll their employees, a founder can plug in basic information about their business, set the budget that they want to spend on healthcare, and connect their payroll system. Then that budget goes directly into the hands of the employees, who can use a Thatch debit card to personalize their healthcare experience.

Patients should be empowered to make choices across the healthcare ecosystem, whether that’s the hospital you visit, the insurance you choose, or the digital health products you use. We want to give patients the flexibility to vote with the healthcare dollars they get from their employer, so insurance carriers start to care about building loyalty based on the experience they provide.

One in four Americans have a treatable mental health condition like depression, anxiety, or PTSD. Most don’t get care, and the number one reason is price. Meanwhile, most therapists don’t accept insurance. If they did, therapy would be accessible for a $20 or $30 copay.

Ultimately, this is an infrastructure challenge. Medical clinicians have been consolidated into large hospital groups: for every medical doctor, there are three billing admins manually filing insurance claims. Therapists, on the other hand, are offices of one. They’re fragmented and they don’t have billing admins, which is often why they don’t accept insurance

The genesis of Headway was that I was a patient. My life totally changed when I saw a therapist who helped me deal with the depression I was going through at the time. But when I moved to New York and tried to find another therapist, I couldn’t find anybody I could afford who accepted my insurance. Turns out, that’s a ubiquitous problem.

The issue that’s lesser-known is that access to mental health care is also top-of-mind for payers. Every payer in the U.S. is scrambling to invest in their mental healthcare offerings because it’s something that can drive top-line and bottom-line results.

Our tech platform makes it really easy for therapists to accept insurance. They see patients, they get paid. In turn, we have this connected network of 20,000 therapists and behavioral health clinicians across the country who accept insurance through our platform.

Our business model is like a reverse mullet: party in the front, business in the back. For therapists, it’s the party in front: a one-click, consumer-grade tech experience where money appears. For payers, it’s business in the back: we’re the largest behavioral health provider group—aka, doctor’s or therapist’s office—in the U.S.

Our health system was designed to provide transactional, in-person care. But the vast majority of death, disease, and healthcare costs in this country are driven by chronic behaviors. In addition, many people can’t access in-person care because of geography or work schedules. They self-triage, or worse, end up in the ER. When people lack strong PCP relationships, health outcomes suffer.

The process of accessing and paying for healthcare services is unaffordable and opaque. It’s become a leading category for viral memes as a result. When the easiest way to remove costs from the system is to either deny care to patients or push more of the payment burden onto patients, that’s what happens.

We offer virtual-first primary care and a healthcare plan that enables us to pass savings directly to employers and members. I used to say we were “Marie Kondo-ing” the healthcare system: removing everything—unnecessary medical procedures, unnecessary buildings, unnecessary in-person visits—that does not result in better patient experiences and lower costs. And we take a full-stack approach to care delivery, network navigation, and coverage.

Everyone should have their own concierge care team that they can access instantaneously for physical and mental health that they know they can afford. That’s how you improve chronic conditions, drive preventive care, and keep people out of the ER. Pair it with a health plan that sensibly facilitates care and payment, and you reduce stress and confusion. We want to create a convenient, affordable healthcare experience that restores trust in the system.

Everyone seems to have a story about a crazy medical bill. And I always ask, “Do you remember getting an estimate? Do you remember knowing what it would cost beforehand?” By and large, everyone says no. Nobody knows the price of healthcare—patients, payers, employers, even the providers themselves.

In my former life, I was a healthcare consultant. I became an expert in the nuances of payer-provider reimbursement contracts. What I didn’t realize at the time was that those were secret—there was a real information asymmetry. That was a really hard problem to fix until some new laws came out in January 2021 mandating that every provider and payer in the U.S. has to disclose the price of healthcare. We finally have access to all this data.

We build software that gives people the cost of healthcare in advance. This is easier said than done. Though these new laws require providers to share prices, those costs are specific to each patient, geography, coding system, and insurance product. It’s not like when you go to a restaurant and everybody gets the same menu. It’s more like we don’t really know what’s on the menu, and depending on what insurance you have, we may pay different prices for the same item.

Turquoise aggregates all this raw, messy data. We simplify and project that data to consumers on our website, for free. Then we contextualize those prices and package it so healthcare organizations can query it and compete on price.

In an ideal future, healthcare providers will be able to say, “Hey, this is the service you need, and here’s what’s affordable for you relative to your plan.” You’ll be able to lock in the exact price for care upfront—and pre-pay for it—then never see a bill again. And as a result, healthcare providers will compete on things like quality, access, and trust.

Between 5 million and 14 million people are expected to lose their Medicaid coverage once the COVID public health emergency expires in May 2023. That’s going to leave millions of people without healthcare. Experts and policymakers call this the unwinding—a terrifying term—but what is being unwound is the backbone of healthcare for a large portion of the country. Being able to reach these people directly, in real-time, is the single biggest business challenge facing healthcare providers serving low-income populations.

When I started Propel, the first product we built was a free smartphone app for people to check the balance and transaction history of their food stamp benefits. That was the tip of the iceberg. It was an example of how the American social safety net oftentimes doesn’t use modern software and doesn’t give people who are experiencing poverty the same types of consumer experiences that they would expect in the private sector.

In a survey late last year, 64% of Medicaid members said that they had heard nothing about the upcoming Medicaid redeterminations. It’s going to blindside a ton of people.

We’ve built this deep, trusted relationship with more than 5 million low-income families. Many of the people who use our app are checking it on a daily basis, oftentimes multiple times per day. We publish a benefits hub inside the app that helps people understand, state by state, what benefits do you qualify for? What’s the eligibility criteria? How do you claim these benefits and what do they actually do? We help low-income Americans, the vast majority of whom are using Medicaid, bridge that information gap and act in their own best interests.

By harnessing repeat engagement and multiple touchpoints, we can help millions of Americans—many of them families with children—get better care, especially as public policy changes. In the future, I hope we can use those touchpoints to help people understand that, hey, this is the right time to get a diabetes test, for example, or these preventative care measures are totally free through your plan.

The status quo experience of healthcare for seniors is highly disorganized, chaotic, and confusing. As a result, older Americans often don’t get the right care up front, which leads to way too many catastrophes and hospitalizations.

The U.S. spends double on healthcare, per capita, what the rest of the developed world spends and has outcomes that rank at the very bottom in terms of preventable illness and death. America spends way too little on primary care and way too much on acute care. The best healthcare in the world can be defined by a very precise formula: the right care, delivered at the right time and place, in a highly consistent, proactive way. If you do that up front, then you dramatically improve outcomes for older Americans while lowering costs.

We want to dramatically improve the health and well-being of older Americans. We realized that the only way to actually deliver high-quality, consistent care at scale was to build a full-stack, tech-enabled healthcare system as a service—which is a deeply crazy, but also logical thing to do.

So we have our own in-house Medicare Advantage health insurance plan. We created a tech-enabled concierge to guide members through their healthcare journeys. We built an in-house medical group of Devoted-employed clinicians—a virtual-first, value-based care provider for seniors. And all this runs on a software platform that is constantly building a custom profile of your health and proactively choreographing the preventative care you need.

Everyone’s healthcare is unique. Through software, we can pool and analyze data to understand what care service you need next, and next, and next. And we then deliver those services to you: Hour-long, comprehensive health assessments. Ongoing medication adherence and therapy management to make sure you’re on the right medications. Coaching to help seniors manage their diabetes or hypertension. A service that manages the transition from hospital to home, where a whole bunch of stuff can go haywire. Intensive home care. On-demand care for urgent situations. Collectively, all this helps seniors stay as healthy as possible.

Recurrent care clinics address everything from mental health to neurodiversity support to physical therapy. For such clinics, there are often real concerns around revenue cycle management. Providers find it hard to get paid for their services: there’s a lot of nuance in the process of submitting, tracking, and triaging claims. If insurance claims are delayed, they can struggle to make payroll. And payers don’t want to pay for services that are incorrect. And so we’ve entered this delicate dance where in order to receive care, patients often need to get multiple approvals or referrals. Ultimately, this leads to higher costs for everybody in the system.

I’ve personally had experiences in the mental health space and learned all the ways that providing a recurrent healthcare service is inherently different from physical care. The nature of recurring healthcare is low variation, high frequency—which naturally lends itself to automation.

Our aim is to help recurring health clinics get paid as quickly as possible for their services so they can focus on caring for patients. We do that by automating billing and revenue cycle management: we clean and validate a clinic’s data, batch it, and submit the claim. In the best cases, they get paid; in the unhappy case of denials or corrections, we work that out, too.

We’re currently focused on revenue cycle management for behavioral health clinics, but long-term we want to help streamline patient intake, scheduling, and more on the patient relationship side. We want to be a one-stop shop for recurrent healthcare clinics and patients.

There have been amazing innovations over the last 50 years on the medical side, but the administrative side of healthcare is still stuck in the ‘80s. You literally still have fax machines, checks being mailed left and right, and different parties fighting over what’s good for the patient or not.

Patients want to pay their bills. But the complexity and complication around medical billing makes it a painful experience even for those who can pay. And for those who cannot afford to pay, it can be literally life-threatening.

The impetus for Cedar was a terrible billing experience. My wife fainted on the street in New York and was admitted to the emergency room, where we paid a $250 co-pay. Then a month later, we received the first invoice. Another month later, the imaging center bill came, and a half a year later, a debt collector called to collect on a bill my wife had never received. That messed up billing experience caused her to lose trust in the medical side as well, which actually makes sense: trust is consistency over time.

We use machine learning and interactive technology to personalize medical billing outreach to patients, making it easier and more affordable for them to pay. For example, for some patients the problem may be understanding English. For others, it might be that they aren’t able to pay for an unexpected medical expense.. For another, it might be that they’re not typically at home to get a paper bill. We want to reach patients where they are in the most applicable method of communication, whether that’s a click-to-pay text message, an email in Spanish, or an every-other-week payment plan.

The grander vision is that the patient can focus on getting healthy and doesn’t need to be worried about all of this administrative hassle. In a country as wealthy as the U.S., we shouldn’t have people avoid the doctor because they don’t have the money for it, or because they don’t have transparency into how much something will cost.

There are ludicrous labor costs associated with processing a healthcare transaction today. For every doctor, there are around 10 additional administrative staff hired, which is insane. Administrative complexity costs the U.S. around $260 billion a year. And after all that, in many cases the medical bill is still incorrect—our research shows that about a third of patients will dispute a bill, and about 80% of them eventually get charges removed or reduced.

Between 2021 and 2022, the rate of bankruptcies for U.S. hospitals went up by 84%. Health system leaders realize that they need to do more with less, but their current tools are not up to the task. My personal view is that the technology industry in healthcare has failed them.

I’ve seen immense energy on the clinical side—people are building amazing companies and solving important clinical problems. But they always get stuck at some point of scale because they have to figure out how to plug into the insane financial system that exists in healthcare. It became apparent to us that these clinical approaches could have much more potential if we could unblock the administrative layer.

We help health system leaders do more with less, starting with automating revenue cycle operations. The revenue cycle is complex, with armies of people working on it: it includes everything from checking the eligibility of the patient and running prior authorizations to closing out the account between the hospital and the insurance company.

Within the revenue cycle, we’d like to get to a point where patients can easily understand and pay for medical procedures before they exit the doctor’s office or hospital, rather than waiting weeks or months to get a bill. One of the things I’m most excited about is the advent of large language models (LLMs) in healthcare. On one side, there will be large language models that deeply understand all of the clinical nodes in the healthcare system, and on the other side will be the operating system that healthcare actually needs to run. We intend to be the interface between the two.

Recurring healthcare providers often struggle to collect payment for sessions they conduct. This is particularly true for a specialty like autism, where there are a lot of nuances and there have been a lot of changing regulations around insurance and telehealth. For many autism clinics, for example, we’ve seen insurance claims taking weeks, months, sometimes years to come back fully paid.

No one starts a healthcare clinic to spend all their time doing paperwork. But in talking to recurring care providers, overwhelmingly we heard that they’re stuck doing administrative activities that are manual, frustrating, and repetitive. In recurrent healthcare, you’re seeing the same patients over and over again, often multiple times a week. And that makes the operational side—billing, dealing with insurance—ripe for automation.

We automate the operational aspects of running a recurring health clinic. We’ve served thousands of patients across many different insurance companies and payers, so we’ve been able to build up a robust knowledge base around what works and what doesn’t to get providers paid what they’re owed from insurance.

For such an old industry, there’s still so much opportunity for technology in recurring healthcare. If we can take time away from the most frustrating and manual parts of running a clinic, providers can better focus on the patient experience.