As health insurance companies try to transform themselves into consumer friendly businesses, the ability to understand their members — their priorities and health needs — has become a sought-after service. White label health technology startup Zipari, which got started 10 months ago, launched its customer experience platform this week.
It sees a niche for its consumer services, with back office analysis, for the emerging group of Consumer Operated and Oriented Plans, CO-OPs. These new businesses on the health insurance scene are seeking insights on their members’ behavior to do a better job of retaining them.
CO-OPS were set up by the Affordable Care Act to provide more competition in the health insurance market. The non-profit organizations are formed at a national, state, or local level and can include doctors, hospitals, and businesses as member-owners. They offer insurance through the health insurance marketplace. About 23 have launched to date, but as Wharton healthcare management professor Scott Harrington, who did a report on the financial health of CO-OPS, their performance has varied widely and some have “virtually no enrollment.”
In an interview with CEO Mark Nathan, he noted that with the shift in purchasing decisions from company HR executives to consumers, within three years he estimated the value of these purchase decisions will amount to $650 billion.
It has rolled out a set of navigation tools to help consumers understand what different plans on private health insurance exchanges cover and know what to expect based on their needs and age. It also provides a way for members to look up providers based on specialty and view their ratings. A formulary app lets users look up whether certain drugs are covered by their plans and make price comparisons for out-of-pocket expenses.
It shares insights on “consumer sentiment,” an oft-repeated phrase that basically means the data analysis that provides customer insights to payers, something Zipari sees as a big value-add.
“We generate a member sentiment figure that reflects the engagement of users. By understanding member sentiment, we can drive it up and can improve re-enrollment,” Nathan said. “If you move the dial by 1 percent, that can make all the difference. That’s the power behind the customer experience platform. It is not just about the tools but capturing all this information about the members.”
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
As an example, Nathan pointed to the health questionnaires that users fill out. If users decide to stop before they’ve completed it, the software platform can recall the stage they quit and sends prompts queued up to that question.
He explained that because the co-ops have only been around for two to three years, they have the ability to create higher customer satisfaction. Of course by that logic, the opposite could happen for many of them, too. That’s the kind of risk that could help them attract more co-ops.
Nathan added that Zipari is courting small to midsized carriers. Eventually it will pursue large carriers but for now, it’s simply a matter of getting them to dip their toe in the water.
Given the reluctance of young invincibles to dip their own toes in the insurance coverage pools, does Nathan see its own company being able to help them get through the challenging health insurance jargon barriers?
Nathan’s optimistic and said it’s got a health literacy component that could help. He also points out that the issue is far from limited to young people. The newly insured are navigating a brave new world of sorts, one that inevitably raises more questions than answers. They also are learning which questions they need to ask to get the information they need.
He noted that the amount of time insurers are spending more and more time on the phone helping people new to health insurance navigate the basics. “There’s a lot of hand holding.”
It raised $500,000 in seed funding recently from Vertical Venture Partners. Although Nathan noted that it is generating income from customers it wanted institutional funding to support sales and marketing. When it got started 10 months ago it had 10 employees, and has since doubled its staff numbers. With the funding, Nathan projects it will add 30-40 employees primarily in sales, engineering and some product development. By 2017, it projects it will have 110 employees.
Nathan’s background has shifted a lot since he worked as a robotics engineer at NASA. He was later a director of professional services at Apple. He moved over to the insurance industry and worked for Guardian Life Insurance where he spent 10 years, most recently as the director of technology strategy, planning and governance. It has an inside track to the CO-OP market through Diallo Powell, who heads up business development. He worked in the U.S. Department of Health and Human Services on the CO-OP loan program in 2012. He led the development of the proposal and business plan that provided $341 million in funding to launch CO-OPS in three states: New York, New Jersey, and Oregon.
