“cracking The Health Insurance Code: Successful Approval And Claims In Australia” – Thanks to the 110+ people who signed up to the Out Of Pocket Slack. Unfortunately, I couldn’t accept everyone, but I will slowly add more people to the group over time, and I will reopen the app in the future. If you are in the newsletter, you will receive a notification.

I went through the first two parts of this graphic last week. Today I want to focus on the third step: selling to self-insured employers.

“cracking The Health Insurance Code: Successful Approval And Claims In Australia”

This creates a Catch-22. How can you find customers to demonstrate that your solution works if no one has tried it? Some people may enter into pilot projects with hospitals or insurance companies, but in many cases these people are destined to fail without real internal buy-in (and thus internal resources) and/or given small test populations that may not work for some reason inherent given population. .

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Plus, just because you’re running a pilot with someone doesn’t necessarily mean they’ll become a customer. There is a graveyard full of “death by pilot” startups where the company is used as a case study but not as a long-term partner.

Enter the employer who is insured (primer here). You’ve probably looked at some of these cute surveys about employers wanting to adopt new healthcare solutions and employees wanting to use more healthcare services and thought “hell, I’m the first to notice, I’ve cracked the code”.

On the face of it, going the self-insured employer route has a lot of benefits (nice ones). The sales cycle is more straightforward/shorter than selling to health insurance providers, including an integrated distribution channel through benefit brokers if you go that route. Additionally, there is generally a greater willingness to test low-risk products that will reduce expenses or increase employee satisfaction.

So the obvious plan is to go to some self-insured employers, demonstrate value and get some data, then go to larger self-insured employers or insurers with data in hand. Healthcare is easy.

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Customers are highly concentrated in the employer segment. About 4% of plans cover 65% of total lives. Big companies are crazy big.

Even among them, not a ton of these employers are very willing to try new solutions. You know it’s bad when Comcast is considered one of the more innovative companies in designing plans and trying solutions…

Innovative employers see a million identical offers for the same solution every quarter. This channel is much more saturated than companies think – no employer wants to hear another pitch where the whole value proposition is “give your employees telemedicine to avoid emergency room visits”. There are already a LOT of those companies.

Sales cycles for self-insured employers are also very varied. It can be very short or extremely long and the process for each company will be really different. For example, diabetes management company Livongo Health has average sales cycles of less than 6 months, with some deals taking less than a month and some more than 12.

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And you need to make sure you catch these employers when they’re setting their budgets for the following year, or you’ll have to wait until the next cycle. If you’re trying to REPLACE an existing solution that already exists, the burden of proof is even higher, as most employers prefer to hit the “auto-renew” button.

Part of this sales process is finding out who actually cares about your solution. In smaller companies, it might just be the head of benefits who does everything, and often they’re not healthcare professionals, but they think about compensation more holistically.

In most cases, self-insured employers will rely on benefits consulting firms such as Mercer, Aon, Willis-Towers Watson, etc. to help them come up with overall employee compensation plans that make the most sense that will include health benefits along with life insurance. , 401pc, etc. Some digital health startups choose to partner with companies with these benefits, but these channels are more saturated than most companies realize, and some brokers have… interesting commission structures to navigate.

There haven’t been too many great successes that have grown solely through the self-insured employer route, and almost all have used a benefits partner to do so (Livongo-Mercer, Castlight-Willis, Hinge Health-Meritain, Grand Rounds -Mercer, etc.).

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Instead, you could work with one of the health insurance companies that sell non-health insurance products to employers (eg plans that act as an employer administrator), but then you run into exactly the same problems selling to health insurance companies.

Even if you get a contract with an employer, you actually have to get their employees to use the product. Livongo says in its investor documents that these implementations take about 3 months and take 12 months to reach 34% of the total hireable individuals. Exits & Outcomes excellent report on enrollment talks about several issues that companies selling to employers have to deal with when reaching out to employees, including not having company email.

“During a recent deployment at an innovative airline, we devised ways to connect with every employee. Call? Get a compelling message to your team without corporate email addresses. Solution? Identify the places they visited each day. We were left with two good options: the dining room and the bathroom. We chose the first one. We co-opted tissue dispensers for one week to share bold, inspiring messages about a new benefit, all in the voice of a company leader.” – Omada Health


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