Self-funded employer health plan Centivo raises $75 million

Centivo’s health plan is offered in 14 states, and is used by over 160 employers

Employers and employees are stuck in a cycle of negativity when it comes to rising healthcare costs: with annual premium rates increasing by double digits, employers are caught in the middle of wanting to protect the health and well-being of their employees, while also fighting ever-rising headcount costs.

This dilemma tends to result in higher deductibles for employees, supplementing the higher rates for the employer, said Ashok Subramanian, CEO and co-founder of Centivo, a self-funded employer health plan that brings benefits to both employers and their employees, which announced a $75 million round of funding on Tuesday. 

"For employees, higher deductibles often translate into a fear of using their plan and avoiding primary care. In fact, 28% of US adults skipped medical care in 2022 due to cost. In turn, this forces people to seek more drastic measures, such as emergency room and urgent care visits, for issues that could have been identified and treated through regular primary care," he said

"Skipping primary care not only worsens health outcomes but also drives up health plan costs for employers. This vicious cycle keeps employers and employees trapped in a system with constantly rising costs, bringing us to today’s healthcare landscape."

Centivo is addressing these challenges by providing affordable, high-quality health plans.

From the standpoint of the employer, they're able to partner with the Centivo team to gain control of their health plan and offer employees comprehensive health benefits; Centivo works closely with these employers to customize a health plan with offerings that meet the needs of their employees while balancing quality and cost. 

From an employee perspective, Centivo provides access to the best providers, with free primary care and fixed, predictable copays. The company offers support for members, guiding them through health plan options, and helping them to make informed decisions. On top of traditional healthcare coverage, members of Centivo also have access to virtual care programs and mental health offerings.

Currently, Centivo’s health plan is offered in 14 states and its virtual primary care offerings are active in 22 states, with over 160 employers under its health plan.

Under Centivo’s health plan, the average annual out-of-pocket spending for employees is $409, compared to the national average of $1650, meaning employees are saving $1,241. Employers under Centivo’s health plan also experience average savings between 15% to 30%.

The company is able to reduce costs for its members by adopting a primary care-centered healthcare model, which is also its differentiation, Subramanian explained.

"This structure places an emphasis on primary care providers, which serves as the first line of defense in diagnosing, managing, and preventing chronic illnesses, ensuring early intervention, and maintaining overall health. Without accessible primary care, the entire healthcare system becomes less effective and more costly," he said.

Centivo’s also health plans have fixed copays, meaning members know exactly how much they will pay for a doctor’s visit or procedure, even before leaving the house, which not only allows members to proactively plan their healthcare expenses but also increases utilization, ultimately leading to reduced financial burdens for all under the health plan.

"By prioritizing pay transparency and cost efficiency within our plans and offering easy-to-comprehend payment structures, Centivo has built strong relationships with our members which has allowed them to proactively plan not only their healthcare but the rest of their lives," said Subramanian.

"Centivo’s network contracting strategy plays a central role in maintaining our competitive edge. While other broad-based PPOs focus on contracting with the largest providers, Centivo takes a calculated strategy, creating smaller, integrated networks for their members. This tailored approach allows us to create relationships with high-quality providers that align with our priority of value-based care."

The new $75 million funding round included both equity and debt financing: the financing was provided by new strategic investors Cone Health Ventures and MemorialCare Innovation Fund, as well as existing financial investors including B Capital, Cox Enterprises, F-Prime Capital Partners, Ingleside Investors, and Morgan Health. Debt facilities were provided by Trinity Capital and ongoing banking partner, JPMorgan Chase. Including this most recent round of funding, Centivo has now raised $225 million in total.

The capital will allow Centivo to enhance and scale its products and technology, incorporating enhanced mental health services and its in-house virtual primary care practice, among other improvements. At the same time, Centivo will continue to grow its network of strategic partnerships with health systems.

"This financing round is a crucial step to ensuring that more hard-working Americans and their families get the healthcare they need without worrying about how they will pay for it," said Subramanian.

This new funding comes only a few months after Centivo announced its acquisition of Eden Health, a national virtual and in-person primary care provider that leverages technology to connect patients directly to a dedicated team of providers that manages their primary care, mental health, and care navigation needs.  

"We recognize the serious flaws within our nation’s healthcare system, and our mission is not finished until all employers and employees have access to affordable health plans. To Centivo, success looks like continued savings for employers, growth for member companies, and getting hard-working employees the healthcare coverage they deserve," Subramanian said.

"With the recent acquisition of Eden Health, we are proud of the broadening offerings under Centivo’s health plan and look forward to forging new strategic partnerships with providers, to continue delivering benefits for employers and employees alike."