Carrum Health wants to change the way we purchase healthcare

Steven Loeb · March 17, 2016 · Short URL:

Carrum was the winner of the People's Choice Award at Vator's Splash Health event last month

At Vator's Splash Health event last month, we crowned three winners: our Judges Winner, our Honorable Mention winner and the People's Choice, who was voted on by members of our audience.

The People's Choice winner was Carrum Health, a bundled payments platform for planned surgeries.

Through the company's platform, self-insured employers,and their employees, can purchase planned surgeries directly from top-quality providers. In doing so, Carrum delivers up to 50 percent savings to employers, additional surgery volume to participating providers and a superior patient experience for employees.

I spoke to Sachin Jain, founder and CEO of Carrum Health, about how he is trying to change the way we pay for and deliver care.

The Origins of Carrum

Before founding Carrum, Jain had previously worked in the healthcare industry and the idea for the company came when he realized that, "despite spending the highest amount on per capita basis than any other country in the world, we are way behind in both patient experience and quality outcomes. Navigating healthcare is extremely complex, and it's even worse for surgery. Going to a top quality provider can literally be a life-saving choice," he said. "The challenge is that the quality of the provider is not clear, and the best provider may not be in your network. Even if you have insurance, there is limited visibility into how much it will cost."

In order to solve this problem, some of the largest employers in the country, such as Walmart, Boeing and Lowes, went to great lengths to identify the best providers, referred to as Centers of Excellence (COEs), and contracted with them directly, bypassing the administrative layers between employers and providers. These programs were very successful: they generated significant cost savings for employers, while dramatically improving the quality of care and experience for employees.

Such COE programs today are limited to a handful of Fortune 50 companies and implementing such a program is "prohibitively complex and expensive," according to Jain.

"No two programs look same. The reason traditional COE programs are so costly and time-intensive is the dozens of integration points and administrative processes that must be streamlined and put in place, which is difficult for most employers and providers," he said. "And for most employers, they don't have the scale of Walmart and if they contract with the provider directly they are not going to get the same attractive price." Also with large national employers, the employees often have to fly across the country to access a COE for surgery which resembles a medical tourism model.  

Carrum Health has solved this problem by building a COE platform and driving standardization, making the model scalable to employers of all sizes. Through their platform, Carrum curates quality data to identify the top-tier providers worthy of the COE designation, and then contracts with them directly using standard bundled payment arrangements. Carrum’s regional focus helps bring together employers and providers within the same geographic area, giving employees access to top quality providers without the cross-country flight. This is the key differentiator in making the model more effective and employee friendly.

"We want to make the enormous benefit of COE model available to everyone and not just a selected few," said Jain.

Benefits for Employers

"Employers can easily quantify the benefits of using Carrum Health. If they are paying for joint replacement surgery with little or no correlation to quality outcomes, they can now compare their historical performance against Carrum’s COE providers with full cost and quality transparency,” Jain told me.

"The ROI is a bit of no-brainer and is extremely tangible. We do not charge any per-member-per-month fee that often bristles employers. Carrum’s revenue is only recognized as a transaction fee for each surgery bundle. In this way, every time an employee uses Carrum Health for surgery, the employer saves money compared to what they were previously spending, even with Carrum’s fee. It is simply not possible to have a negative ROI under our model.”

Every procedure saves employers between 30 to 50 percent on average, depending on the surgery and their historical payments.

Employee Experience

Once an employer has signed up with Carrum, employees can use Carrum’s platform to shop for the best provider for their particular surgery. "They are no longer limited to their health plan network," said Jain.

The best part for employees is they typically don’t have to pay anything out of pocket if they choose a COE through Carrum for their surgery. They don't even get a bill, because the cost savings for the employer are so significant that they will pay for everything under Carrum’s COE program.

Carrum also provides support and guidance for the patient every step of the way.

“We feel strongly that creating an exceptional employee experience ties our model together. This unique experience combined with the increased volume for the provider and lower cost for the employer results in a true win-win-win situation for everyone involved. When was the last time that happened in healthcare?” said Jain.

Carrum offers a handful of high-impact bundles and is currently available in selected markets.

“The focus at the moment is to make the model highly repeatable, and we will be adding more bundles and markets as we grow,” he said.

About Carrum’s CEO, Sachin Jain

Carrum Health is Jain’s second startup. He is an engineer by training and did his undergrad in Computer Science from the Indian Institute of Technology, Delhi, followed by an MBA at the University of Chicago Booth School. His first foray into healthcare was at Accretive Health, a revenue cycle management company, where he “gained exposure to how payments flow in healthcare from the ground up, and realized the true level of inefficiency that exists in the industry."

Afterward, Jain took a position at the management consulting firm Booz & Company as part of the North America Health Practice.

"It was an eye-opening experience and I got the chance to learn directly from senior industry leaders. Most of my work at Booz was to work with health plans and health systems on healthcare reform issues. My specific area of focus was bundled payments" said Jain.

The inspiration for Carrum came back in 2013 when Jain came to the following realization that “bundled payments was an emerging concept but because of my Accretive experience, I realized its potential very early to bring tremendous efficiency to payment processes."

"When we started Carrum, most providers were reluctant to work with us on bundled payments,” he told me.

The breakthrough happened last summer when CMS decided to mandate bundled payments for joint replacement surgeries. Those providers that were not yet ready for bundle payments now had no option.

“There are a lot of tailwinds behind bundled payments at the moment.”

The future of Carrum

Orthopedic surgeries are the "lowest hanging fruit," according to Jain and he plans to expand the same bundled payment approach to other service lines including chronic care. 

"There is a lot of activity happening in the chronic care space, where people are trying to design bundles for diabetes and oncology. Any type of care that can be bundled can be added to Carrum’s platform and we will continue to drive cost savings, better quality outcomes and superior patient experiences across the entire spectrum of healthcare."

Jain summed it up by reiterating Carrum’s focus of ‘Matching Human Need with Medical Excellence.'

“We want to make sure everyone in US has access to the best care in their moment of need and we believe it’s an achievable goal.”

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Carrum Health


Joined Vator on

Healthcare is unreasonably complex and costly. At Carrum Health, we’re applying a common sense approach to simplify the payment model and produce greater value for employers and their employees. We do so by directly connecting progressive self-insured employers to top-quality regional healthcare providers through the industry’s first comprehensive bundled payment solution. Our innovative platform reimagines how care is paid for and delivered, improving the value of health benefits for employers and their members.

Good for employers. Even better for members. No tradeoffs.

Carrum’s solution is a “win” for all parties, a rarity in healthcare:

- Employers achieve significant cost savings and predictability without risk or hassle.

- Members receive top-quality care and a concierge experience for zero out-of-pocket costs so they can focus on recovery instead of medical bills.

- Providers gain streamlined administration allowing them to do what they do best – deliver expert care.

For more information about Carrum Health, please contact


Sachin Jain

Joined Vator on

Sachin Jain is a successful entrepreneur and passionate about redefining healthcare experience for patients, especially in their moment of need. Prior to founding Carrum, Sachin was a part of the North America Health Practice of Booz & Company.

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