Oral health coverage is mostly left out of the broader healthcare debate. A budding dental insurance company called Beam wants to fill that cavity by following a model that aims to use technology to improve health and reduce medical costs.
"The entire dental services industry would run tens of percent more efficiently if there was an entity better utilizing data and technology,” said Alex Frommeyer, CEO and co-founder of Beam.
The Columbus, Ohio-based company, which has only 20 employees and has most of its business in three Midwestern states, announced Tuesday that it is expanding to small and large employers nationwide.
Beam's growth is largely motivated by the Affordable Care Act, which has indirectly created an incubator of healthcare startup companies that aim to improve the system, lower costs and potentially make some money along the way. Manhattan-based Oscar Insurance Corp. has been a poster child of relative unknown healthcare startups transforming into investor darlings.
Oscar bases its health insurance business on convenience for consumers and technology-based services, such as 24/7 video chats with doctors. The ultimate hook is reducing medical costs by eliminating unnecessary visits to hospitals and doctor offices. That is what Beam hopes to emulate. "We are big fans of what they've done,” Frommeyer said of Oscar. “Our brands are very similar in spirit.”
But while Oscar has captured appeal among millennials and dollars from investors, its bottom line so far has suffered. Oscar hemorrhaged $27.5 million last year and has only 40,000 members—yet it is somehow valued at almost $1.5 billion.
Venture-capital firm Drive Capital invested $5 million into Beam last year. Beam's calling card is its smart toothbrush, which has approval from the Food and Drug Administration and is part of its dental plans. People use the electric toothbrush in conjunction with Beam's app to monitor their brushing habits and statistics. Beam's app also works to schedule dentist appointments and find participating providers. Beam uses the national dentist network from Renaissance Dental.
Frommeyer said the company's policy costs about $30 a month for the average person in Ohio, and it follows a 100-80-50 model. Beam covers 100% of preventive services such as cleanings and X-rays, 80% of basic services such as cavity fillings and 50% of major procedures such as root canals. It's a common model for dental insurers but potentially exposes patients to hefty out-of-pocket bills for the major procedures.
Beam's plan includes an extra perk: toothpaste, floss and replacement brush heads for the smart toothbrush are shipped to members every three months. Beam essentially eliminates the need for consumers to shop for oral care products at big box retailers, and they also tailor to the needs of individual beneficiaries. For example, someone with sensitive teeth could receive specific toothpaste for that condition—all of which can be completed through the app.
Frommeyer said Beam's amenities cater to today's consumers. But more importantly, they incentivize preventive care and handling small health problems before they become large ones—the mantra voiced repeatedly by other health insurers and providers. “Many people that don't have affordable access to a dentist, guess what happens when their tooth decay becomes unbearably painful? They go to the emergency room,” he said.
Frommeyer knows Beam's future success is far from a slam dunk. He did not disclose the company's revenue or current membership. Beam hopes to have 25,000 members by the time the calendar flips into 2016.
“I hope primarily Beam draws a lot of attention to dental insurance,” Frommeyer said. “The Affordable Care Act has left a lot of opportunity on the table to address serious issues with oral health.”
Still, dental insurance has not gotten near the same attention as general medical insurance. From 108 million to 127 million Americans lack dental coverage, according to various industry estimates. Democratic presidential hopeful and Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.) have tried to address the issue in Congress. The two legislators sponsored a bill this year in each chamber that would expand dental coverage in Medicare, Medicaid, ACA exchange plans and the Veterans Affairs Deparment.
