Issue 010.

Welcome back to E&O Wednesdays, the enrollment-focused digital health newsletter from Exits & Outcomes — for paying subscribers only. This every-other-Wednesday issue digs into digital health companies that sell to self-insured employers as well as others that rely on enrollment-based distribution for their digital health programs.

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Tullman on Transcarent’s cost-savings business model, 60-second-chat, and more

This week I had the chance to talk to Glen Tullman. The news you know: He just announced his new gig will be CEO of a recently formed startup named Transcarent.

Like Livongo, Transcarent started up by acquiring a company: 13-year-old surgery concierge BridgeHealth Medical. (I’ll get into more details on how Transcarent will build on BridgeHealth’s model — plus a bit of BridgeHealth’s history and revenue numbers — toward the end of this article.)

In Issue 008 I wrote up a few notes from Tullman’s recent talk at Wharton’s digital health event, where he shared his thoughts on Haven, what the HAAC SPAC will focus on (hospital-at-home was my takeaway), and what turned out to be foreshadowing remarks about his move to Transcarent.

Transcarent is offering a few things to self-insured employers at launch:

In addition to Tullman, the Transcarent team is a worth story in its own right. A chief of staff from Haven. A head of product from Glassdoor. A Chief Medical Officer from bundled payments pioneer Signify Health. And a key executive from Mercer.

While I could have justified a deep dive into the team or the user experience that Transcarent is hoping to create, for this article, I’m going to mostly focus on how Transcarent plans to charge employers.

Transcarent will offer employers a chat-based health service that Tullman calls their “60-second-chat”. The “60-second” refers to how long an employee should expect to wait before a Transcarent care navigator or provider responds to their request to chat, meaning text-based messaging. Tullman believes people will increasingly prefer to text with health providers vs. hop on a video call, but, as noted in the block quote above, Transcarent will offer a range of ways for members to conduct virtual visits.

Episodes of care: Transcarent will charge an employer every time one of their covered lives starts a chat, but that initial point of contact will kick off a seven-day episode of care. During those seven days, the employee will be able to freely chat with Transcarent about anything else that comes up, and Transcarent will aim to re-connect them with the same person they spoke to originally, if possible. (That’s something Tullman said Doctor on Demand already does well.)

Less expensive usage fees plus a cut of the savings: Transcarent plans to charge less for its seven-day episode of care chats than the average cost of a video visit. Tullman didn’t give me hard numbers but he ballparked it for me. If video visits cost $50 on average, the episode of care chats will cost $40 in total.

Tullman said that Transcarent will also keep tabs on those savings.

So every $10 saved by the employer that uses a Transcarent chat instead of a video visit goes into a running tally of all the savings attributable to Transcarent. At the end of an agreed-upon time period, Transcarent will share the total cost savings with the employer and invoice them for a percentage of those savings. (Again, Tullman wouldn’t share the exact percentage but he said “call it 30 percent” to illustrate how the model works. “But it’s not 30 percent,” he said.)

The real shared savings will start to add up with Transcarent’s surgery concierge offering. Remember, Transcarent was formed in part via an acquisition. BridgeHealth Medical works with self-insured employers to find high-quality (and thus lower cost) options for scheduled surgeries. Tullman said BridgeHealth only works with providers in the top quartile based on quality measures.

Based on a few sales presentations and customer agreements I found, prior to the acquisition, a key piece of BridgeHealth’s business model was a PEPM fee on the order of $1.25 to $2.70. As a part of Transcarent, there will be no more upfront fees.

Instead of collecting fees from providers for sending them surgery patients, Transcarent will only collect fees from its employer customers based on how much they saved them. So, if an employee is flown out-of-state for a consult with a surgeon and that surgeon does not recommend surgery, then Transcarent would count that as an unnecessary surgery it helped prevent. It would then collect a percentage of the savings.

Similarly, if Transcarent manages to help an employee find a lower-cost option for surgery out of state, it would compare that cost to the average cost of the surgery locally and take a cut of the savings.

Importantly, in some cases where those savings are significant, Transcarent may also share some of those cost savings with the employee. Tullman gave an example where an employee might receive $1,000 of the $10,000 Transcarent saved their employer.

While some of the cost savings arrangements Tullman suggested seem straightforward, a few were harder for me to grasp.

Tullman said that Transcarent’s running tally of cost savings might include part of the cost of a prior agreement with a benefits navigation vendor — if Transcarent replaced them for the employer or if the employer considered working with one but went with Transcarent instead.

In any case, it is early days at Transcarent. I’m curious to see how this business model evolves.

Estimating BridgeHealth’s annual revenues

For a number of years, BridgeHealth disclosed its annual revenues in press releases after it won awards for being one of the fastest-growing companies in the US. Since those press releases also included three-year growth rates, I put together some estimated revenue figures for BridgeHealth between 2011 and 2017, which was a year the company’s revenues dipped.

While it’s not on the chart below, BridgeHealth seemed to have a strong 2019. It added some 300,000 covered lives that year and boosted its total members to around 1 million. Considering its PEPM business model — and the fact that the company said it hit 500,000 covered lives by mid-2016 — it seems possible that BridgeHealth topped $20 million in revenue in 2019, the year before it merged with Transcarent.

F500 Digital Health Stack: UnitedHealth Group

Digital health companies love to boast how many Fortune 500 customers they have. This recurring feature of E&O Wednesdays digs into a different Fortune 500’s digital health stack.

So far, in past Wednesdays issues, I’ve written about the digital health stacks of nine big companies: Walmart, Activision Blizzard, JP Morgan Chase, The Home Depot, Boeing, 3M, Chevron, BorgWarner, and Bank of America.

This week, I dug into UnitedHealth Group’s digital health stack. To be clear: this is a run-down of the digital health benefits that UHG offers to its own employees, but, yes, it also looks a lot like the list of digital health initiatives I dug into for E&O’s UnitedHealth Report earlier this year.

Virtual Visits from Teladoc, American Well, and Doctor on Demand: Virtual visits are some of the only digital health benefits provided by third parties that UHG offers to its employees. UHG tells its employees that “With Virtual Visits, you can save time and money” and “there’s no need to make an appointment” plus “doctors can even write prescriptions for you to pick up at your local pharmacy.” UHG describes virtual visits as “perfect” for conditions like allergies, bladder infections, bronchitis, ear pain and other relatively less complex medical issues. Employees are directed to the myUHC website to register to start a virtual visit. They can also use the myUHC app. Notably, UHG does not send them to any of their virtual visit partners’ sites or apps. While some plans require no payments for virtual visits, elsewhere UHG says employees should expect to pay “$50 or less”.

Stride is UHG’s wellness programs hub: Most of UHG’s digital health benefits are nestled under the brand “Stride,” which is what UHG refers to as its “well-being movement.”

Level2 for diabetes management or reversal: UHG’s diabetes program is now available for employees who are on a Bind health plan and have a Type 2 diabetes diagnosis. This is UHG’s Livongo and Virta Health clone and it includes a CGM and a Fitbit device.

Sanvello for mental health: This is another UHG acquisition, formerly named Pacifica Labs, focused on mental health. “Sanvello is an app with on-demand resources to help with stress, anxiety, depression and other conditions – and improve overall mental well-being by helping us develop self-care routines, habits and strategies in our day-to-day lives.” Sanvello is available to all UHG employees regardless of their plan.

Talkspace: While UHG-owned Sanvello is featured in various places on UHG’s benefits documents and on its Stride site, Talkspace is featured alongside Sanvello as a popular tool available through UHG’s EAP, Live and Work Well. It promises 24/7 access to chat with an in-network therapist.

Real Appeal for weight loss: This is the evolved version of UHG’s diabetes prevention program, which has gone by many names over the years. It no longer positions itself as a DPP, but it offers something similar:

Foodsmart by Zipongo: Zipongo appears to be one of the only digital health partners that UHG works with that it doesn’t own.

Quit For Life: This is an Optum-created smoking cessation program that uses phone call-based coaching and online education.

Rally health rewards: UHG incentivizes employees to take a health survey ($25), complete a biometric screening ($75), or earn the full $600 by completing the health actions that Rally suggests based on the survey and screening: “The recommendations may include a condition management program, telephonic or digital coaching across a variety of topics, cancer screening, or a new fitness program called Rally Stride where you can earn money for meeting monthly step goals.” The Rally site has also recently added a “Rewards for Health Marketplace” where employees can spend their rewards dollars, and it intends to add charity donation options later this year.

The Well for on-site clinics and care navigators: UHG has about a dozen on-site clinics available to employees under the brand “The Well”. While these clinics are offering virtual visits during the pandemic, they are also a resource for employees looking to talk to a Health Care Advisor about care options. These advisors are the RNs who work at the clinics but they also help UHG employees “navigate the healthcare system by helping employees: resolve claims and benefits questions, identify quality providers and schedule appointments, identify lower-cost, high-quality treatment options.”

Well, that’s a wrap on UHG’s stack. (If you want to learn more about these programs, E&O’s UHG report goes into each of them in greater detail.) Some of these stacks are easier to figure out than others (so no promises), but let me know which company’s digital health benefits you’d like to learn more about by hitting reply to this email. And if you happen to work at a Fortune 500 company (and I know that’s a lot of you), then please send me your benefits information.

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