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Glen Tullman, founder of Livongo, became CEO of Transcarent in March
The digital healthcare space has been on a tear since the beginning of the pandemic; what was once a growing, but still somewhat niche, segment of the overall healthcare ecosystem, has now become essentially a must have for all players.
As we all know, though, healthcare is expensive and it's difficult for the average person to navigate. Bringing healthcare closer to the patient, and rethinking what actually constitutes health, is a great step in the right direction, but more telehealth, apps, and tools don't solve actually those underlying, fundamental problems.
Transcarent is a company that think it has finally found the solution: it offers a consumer-directed health and care experience for employees of self-insured employers and their families, with increased transparency.
"Self-insured employers, who pay for almost half of the healthcare expenditures in the U.S., are frustrated. Healthcare is a huge expenditure for these companies and costs have escalated year over year, with no real corresponding improvements in the quality of care for the employees and their families," Krishnan Sridharan, the company's President, told me.
"We started Transcarent to improve the quality and value of care by giving employees of self-insured employers and their families greater control of their healthcare decisions."
On Thursday, the company, which is led by Glen Tullman, the founder and former CEO of Livongo, who took over the role of CEO in March, announced a $58 million Series B investment led by General Catalyst and 7wireVentures, with participation from Merck Global Health Innovation Fund, Kleiner Perkins, Leaps by Bayer, GreatPoint Ventures, and Threshold Ventures along with existing investors Alta Partners and Jove Equity Partners.
Transcarent raised a $40 million Series A funding round in October of last year, and this round brings its total funding to $98 million.
Founded in 2020, Transcarent acts as a single-stop health platform, addressing many of the most important and frequent health needs of a typical Member; that includes 24/7 access via chat, phone, and video to a personal Health Guide, expert second opinions, medication review and management, physical therapy, and full surgery management.
"We ensure members get the best care in the right setting: whether virtually, at home, or in the community at surgery centers or hospitals. Transcarent is also focused on moving care from hospitals to home, which is more convenient and safer for people, shows better quality outcomes, and is more cost-effective," said Sridharan.
"Our mission is to empower people to stay healthy by providing them with 3 things they get in every sector outside of healthcare: unbiased information, trusted guidance, and easy access to high-value care, when and where they need it. And, we allow them to share in the financial upside of their health decisions. But the key is we put them in charge."
In the current healthcare system, if a patient needs knee surgery then will would have to start by figuring out where the best place to go would be, despite not really being sure about the quality of care at each place. They would also have to figure out how much the surgery will cost; they may know that they will be responsible for 20 percent of the total cost given their insurance, but it’s still hard to predict what that amount will be due to a lack of transparency.
Transcarent alleviates this burden on the patient by setting them up with a free second opinion to ensure they actually need surgery since, in many cases, providers will find it’s actually unnecessary, Sridharan explained. If it is determined that surgery is necessary, Transcarent will then provide the patient with information on the best places to get it done.
"This access to high-quality care has traditionally been reserved for the CEOs of companies or only those who could afford it. Transcarent connects you with best-in-class providers, and will even fly you there, because we know that quality care can improve health outcomes and reduce the cost of care for both the employee and employer. It’s a totally new and different healthcare experience," he said.
Another use case for Transcarent would be someone who is sick in the middle of the night; the patient can connect with a doctor via text, call or chat in an average of 60 seconds. That allows them resolve the issue, get their prescription called in, and have a record of the appointment outlining their treatment plan without having to go to an urgent care center, or waiting until the morning to get care.
Despite only officially launching in March of this year, Transcarent already has over one million active members, and over 160 Centers of excellence. It also has 100 employer clients via its acquisition of BridgeHealth, a provider of surgical advocacy and centers of excellence (COE) programs, last year. So far, through the Transcarent platform, 21% of patients have received a change/correction in diagnosis, while 40% of patients avoided unnecessary surgeries or procedures. In addition, Transcarent’s surgery solutions provide an average overall net savings of 25% to 50% per procedure.
Transcarents customers are the self-insured employers, and the company is able to create greater savings for employers and their employees through it negotiated bundles, integrated services, and promotion of appropriate care, as well as its ability to reduce redundancies in pricing and care drive down costs.
It also allows employees, and their families, to share in the financial benefits of their health decisions, Sridharan told me.
"Applying this value-based care model across more of our clients’ health encounters allows us to align incentives with our clients by offering at-risk pricing options. We get paid when Members actually use high-value health services and when we help our clients achieve savings, which we measure on an ongoing basis using a methodology we mutually agree on with our clients," he said.
The big change in healthcare in recent years, and especially the last 18 months or so, has been the move toward care consumer-centric moving forward; what Transcarent is betting on is the that trend will continue, especially now that patients have gotten a glimpse of what that care could be like for them thanks to the pandemic.
"The pandemic has been a forcing function, and consumers aren’t likely to go back to the traditional ways of seeking care now that they’ve gotten a taste of how convenient it can be. The future of care will be meeting patients where they’re at, and providing care in a way that’s convenient to them," Sridharan said, comparing what Transcarent does to companies like Travelocity or Amazon, which removed the middlemen, to give the consumer a better experience.
The ultimate goal, then, is to remove the barriers that currently exist with the healthcare system to make it easier for people to get and stay healthy by giving the patient more control.
"We trust our Members to make the right decisions —decisions that are best for themselves and their families — if we provide them with the right information, tools, and incentives," he said. "Even for people with resources, it’s way too difficult to seek quality, affordable care. Success is connecting consumers with the right kind of care, how and when they need it."
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