How does Sharecare make money?

Steven Loeb · June 11, 2021 · Short URL: https://vator.tv/n/5277
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Most of Sharecare's revenue comes from selling software and services to employers and health plans

Healthcare fragmentation is a big problem; with different systems and providers unable, or unwilling, to work together, the ones that truly suffer are the patients. It makes their care cost more, and it leads to worse outcomes, with the patients who experienced the most fragmentation in care having an average total cost of nearly double those patients who experienced the least fragmentation.

Solving that problem is the mission behind Sharecare, a digital health platform that helps people manage all their health data in one place.

This is how Akshay Sharma, Executive Vice President of AI at Sharecare, explained what the company does to VatorNews on a recent podcast

"Healthcare is extremely fragmented, which means that your data could be in many different places, and getting them to a single point of view is very difficult. And it's not just the data that is siloed; even the care is siloed. So, what Sharecare does is it takes this fragmented version of the healthcare ecosystem and tries to unify all of this into a single point of view for the consumer by working with all the relevant stakeholders," he said.

"By unifying and aggregating this data from multiple sources, we can create a personalized health and well-being experience for the person. That's really what Sharecare is all about: it's a digital health and wellness platform."

The company offers what it calls the RealAge test, a health assessment tool that assesses a variety of behaviors and existing conditions of its members so it can provide them with a metric for their physical health.

"Using RealAge as a person’s baseline, our algorithms power a data-driven dialogue with the member, creating a content-rich, personalized experience that presents them with relevant benefits programs, resources and providers for those needing healthcare and well-being support. As members change their behavior, the platform refines its predictive analytics to provide increasingly compelling recommendations," the company wrote in its filing with the SEC.

Sharecare takes data from smartphones, eligibility and claims, social determinants of health, and medical records, along with self-reported data, to recommend personalized resources, tools, information and programs for each individual member.

Members also get access to lifestyle or disease management and coaching programs, including diabetes management and smoking cessation; well-being solutions, such as financial health and anxiety management; and care navigation tools, such as find-a-doctor, prescription savings, clinical decision support and medical records.

"Our product design philosophy uniquely positions us to drive meaningful engagement while also aggregating a critical mass of behavioral data, to which we apply AI to more accurately personalize recommendations to predict and influence positive outcomes for each individual."

How does Sharecare make money?

In the first nine months of 2020, the company made $240.4 million in revenue, down 3% from the $248 million it made in the same time period in 2019. Its revenue, which comes from software development, licensing or sale of software and services, is broken down into three legs, depending on who is being sold to: enterprise, providers or consumers.

The largest of the three streams is enterprise revenue, which involves providing employers and health plans with health management programs for their employee base or covered population. That includes digital engagement, telephonic coaching, incentives, biometrics, and patient care managed health.

This revenue is recognized on a Per Member Per Month basis, or it's based on member participation, which is determined by multiplying the contractually negotiated member rate by the number of members eligible for services during the month.

Revenue from enterprise clients came to $142.4 million in the first three quarters of 2020, or 59% of total revenue. The amount of enterprise revenue declined $9.1 million, or 6%, year-to-year. 

The second largest leg is provider revenue, which is primarily based on the volume of health document requests that the company fulfills for the physicians on its platform. Revenue also comes from subscription fees for services that include performance and risk-adjustment tools, billing contract compliance and enhanced patient care.

The company made $59.5 million in revenue from providers, or 25% of total revenue. This revenue stream increased 1.3% from 2019 to 2020. 

Finally, the company makes money from consumer solutions, which includes its suite of digital products and medical expert knowledge that gives its members personalized information, programs, and resources to improve their health and well-being. This revenue mostly comes through ad sponsorships and content delivery. Content delivery revenue is recognized when the content is delivered to the client, while ad sponsorship revenue is recognized when the contractual page views or impressions are delivered to the client.

"By contributing to the vast amount of content and targeted programs available on our platform, medical professionals, sponsors and partners have the rare opportunity to integrate their brands into our member experience and market themselves in a highly relevant and engaging environment. Our approach yields deep, targeted insights into patient adoption, engagement and behavior change," the company wrote.

In all, consumer solutions brought in $38.5 million in the first nine months of 2020, or 16% of total revenue. It was up 1.4% year-to-year. 

Sharecare was founded in 2010 by WebMD founder Jeff Arnold and Mehmet Oz, in partnership with Harpo Productions, HSW International, Sony Pictures Television, and Discovery Communications.

It had raised $425 million in funding before announcing plans to go public in February via a SPAC deal worth $3.9 billion.

(Image source: sharecare.com)

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