Health tech startups Gravie and Stride Health, each with a slightly different business model, see money to be made in helping consumers navigate the often non-consumer-friendly new world of online health insurance exchanges.
“In other areas, online portals have helped consumers navigate through complicated decisionmaking,” Dr. Mohit Kaushal, a partner with Aberdare Ventures and an investor in Gravie, said. Gravie and Stride Health hope to duplicate that success in health insurance shopping.
The exchanges are not necessarily easy for consumers to use, found a team of researchers from the Robert Wood Johnson Foundation that navigated HealthCare.gov and state-based exchanges during the beginning of the open-enrollment period, for example.
Exchanges don't typically estimate costs of different plans for consumers, or provide integrated tools to search for in-network providers, they noted.
And consumers get confused about what they're buying. For example, a Commonwealth Fund survey conducted from April to June this year found that nearly 40% of consumers don't know what doctors are in their network.
For Stride Health CEO Noah Lang, the problem isn't just how exchanges present information, it's also the way healthcare presents information overall. “I'm really big on the vocabulary in this space. The word 'quote' is one I'd like to eradicate,” he said, citing one example of healthcare jargon that, cumulatively, confuses consumers. “A price is a price.”
Lang's company is building a recommendation engine for consumers based around key questions they ask.
“They want to know what the most affordable option is for them,” he explained. “They want to know if they can keep their doctor, or whether they can see a good one. And they want to know what their doctors and drugs are going to cost,” he said. “It's hard to answer those questions—unless you build an engine that gives personalized answers to everyone.”
Stride Health aggregates information such as historical claims, doctor networks, drug formularies, real-time drug pricing data and self-reported consumer data to arrive at individual recommendations for consumers shopping for insurance on an exchange.
It also can take personal factors, such as what drugs or conditions someone might have, and estimate costs based on patients with a similar profile.
Stride Health markets direct-to-consumer and has partnered with some so-called sharing economy firms, such as ride-sharing firm Uber, that use independent contractors as their workforce. Should it make a successful recommendation, it earns a commission, like a traditional broker.
Gravie targets small and midsize businesses, pitching the idea that their employees can get cheaper insurance—and have more options—if they go through Gravie's marketplace. About 30% of its clientele are individuals “off the street”, said CEO Abir Sen.
Gravie also helps customers manage their health experience. A consumer with a high-deductible health plan, for example, would be able to manage a health spending account and have options for telehealth through the firm's website.
“If you run into trouble, your claim gets denied, we can help you sort that out. If you got a bill from a hospital that doesn't make sense, we can make sense of it,” Sen said.
One of the features on the firm's app is called, “Is it covered?” It allows consumers to ask whether a given procedure or provider is covered by their particular insurance plans. If a consumer keeps asking questions and being told “no,” Sen said, the firm might mention during a subsequent enrollment period that there's a plan whose premium costs $40 more per month, but covers all the services the customer has been looking for.
Like Stride, Gravie makes money as a broker. Gravie raised a reported $10.5 million earlier this year.