This startup is daring to bring on-demand services to health insurance

Bind offers insurance to U.S.-based self-insured employers such that employees get “Core” coverage for primary care, specialty care, and other needs, but can purchase “Add-Ins” to get on-demand coverage as needs arise.

Getting almost anything on demand is the order of today’s world. Television and movie streaming services (think Netflix) have driven out brick-and-mortar businesses (think Blockbuster Video), while Amazon makes it possible to order everything from books to furniture with the click of a button. Meanwhile, companies like DoorDash enable instant satisfaction of food cravings. And of course, Uber and Lyft make it easy to order a ride right from your phone.

Although on-demand services are ubiquitous in most aspects of our lives, bringing that model to the healthcare world seems like a joke. After all, it’s an industry known for its archaic ways and notoriously long wait times. But one company — Minneapolis-based Bind— is daring to bring an on-demand way of thinking to one of the field’s biggest stumbling blocks: health insurance.

Founded in 2016, the startup offers insurance to self-insured employers in the United States. On its website, the company is careful to note it is not an insurance company, as its programs are employer-sponsored, self-insured health plans. It relies on UnitedHealthcare’s networks, as well as its data and analytics capabilities.

Here’s how the service works: Bind’s “Core” coverage encompasses primary and specialty care, preventive care, emergency and hospital care, chronic care and pharmacy needs. Maternity care and cancer care are included. There are no deductibles or restrictions on pre-existing conditions.

Bind also offers “Add-Ins,” or extra coverage outside the core offerings. For instance, if an individual needs a knee replacement, he or she could purchase additional coverage for it. Employees can buy add-ins at any time. Just like adding channels to your cable line up or streaming services like Sling.

In addition to on-demand services, another aspect of the consumerization of healthcare is price transparency. Bind aims to deliver on the latter too.

The Minneapolis company enables users to see their potential costs from the get-go. After logging in to Bind’s website or its mobile app, people can type in a certain condition or need, such as “ear infection.” The app will tell them whether it’s covered under their plan. Additionally, it indicates how much a specific treatment costs at different types of locations, like a retail clinic,  primary care office and urgent care center, enabling the user to pick the most affordable option. The Bind app also gives provider-specific cost information.

If an individual types in a condition that isn’t covered under their plan, the app informs them that there’s additional coverage they can buy. Additionally, the tool seeks to remind users of alternative treatment options or aspects of their core coverage that could solve their condition so they don’t have to purchase an add-in.

In a phone interview, Tony Miller, Bind’s CEO and one of its founders, explained the rationale behind structuring the company this way. When he and his team asked consumers what they want out of health insurance, they found that people think about insurance based on their individual health conditions. For instance, if a person has fibromyalgia, he or she would want a plan built around that, Miller said.

The on-demand structure is also more conducive to the way most people use the healthcare system.

“We want to find the most efficient provider … and then get back to our everyday lives and not have this deep, personal relationship with the healthcare system,” he said.

Part of the startup’s ultimate goal is tackling the hefty costs associated with healthcare. By offering add-ins and price transparency, Bind wants to prevent people from using expensive services — like the emergency department — if they can go somewhere cheaper for the care they need. By structuring its coverage this way and giving consumers a better picture of the price tag up front, Bind claims to be helping employers save 10 to 15 percent on health costs.

High-deductible health plans were meant to tackle high care costs, but Miller said that approach is bad for the risk pool. In the Bind model, no one needs a deductible for cancer or diabetes. Bind switches up the coverage model by focusing on conditions instead. Individuals receive the majority of coverage through their core plan, but can then buy add-ins for anything they have time to plan for.

The company benefits clinicians as well, Miller said. Providers who have made investments in groups like clinically-integrated networks want to see the healthcare system become more transparent to the consumer. Teaming with Bind enables providers to target specific employer groups and establish their pricing without having to negotiate.

This isn’t Miller’s first step into the world of health insurance. He previously co-founded and served as CEO of Definity Health, which led the way in consumer-driven health benefit programs. That company was acquired by UnitedHealth in 2004 for $300 million, according to The Wall Street Journal. Another Definity co-founder and former CEO, Kyle Rolfing, went on to found RedBrick Health, a corporate wellness and employee engagement company, and health insurance startup Bright Health.

Bind makes revenue in a few ways. The first is by charging employers an ASO (administrative services only) fee, which Miller likened to a SaaS business model in which Bind gets paid to operate the plan. Additionally, the company provides stop-loss policies, particularly to smaller employers. Organizations typically purchase such policies to protect themselves against large claims and unpredictable losses.

The Minneapolis startup is backed by funding from UnitedHealthcare, Ascension Ventures and Lemhi Ventures, where Miller serves as managing partner. To date, Bind has raised a total of $72.5 million, according to SEC filings.

Ryan Schuler, managing director at Ascension Ventures, said his firm has known Miller for over a decade and believes Bind’s model has the potential to reward providers for high-quality care, lower costs for employers and employees and empower patients to make more informed healthcare decisions.

“[The Bind] team has been incredibly thoughtful about innovating insurance [and] rethinking the underlying business models that support insurance,” he said in a phone interview.

Thus far, Bind has launched with a few employers, including Little Canada, Minnesota-based Slumberland Furniture and Wisconsin-based Dove Healthcare, which operates healthcare, skilled nursing, and assisted living facilities. Dove was the first employer to offer Bind.

In a phone interview, Jennifer Risinger, Dove’s regional director of human resources, explained that the rising costs of health coverage drove the organization to look at new options. It switched from offering Medica plans to Bind plans as of January of this year.

Of the approximately 1,000 employees at Dove’s 10 locations, about 500 are eligible for benefits. About 275 are participating in the Bind health plan, which is the only plan Dove offers.

The company, she said, has been helpful in solving any questions that arise. Though Dove was initially concerned with whether its employees would understand Bind’s product, the startup answered employees’ questions and followed up if they didn’t immediately have an answer.

“Typically with an open enrollment process, there’s a lot of chaos that goes on,” Risinger said. “Really, this has been one of the smoothest that I’ve ever had or could have anticipated.”

Moving forward, Risinger said Dove will continue to examine the benefit setup and which procedures may be considered add-ins. As of mid-July, the organization was looking at its renewal process. Risinger said all signs indicate Dove will likely renew with Bind for 2019.

As intriguing as its concept is, Bind has a long way to go. It has to add much larger corporations to its roster of clients to make any noticeable dent in the way health insurance works. Miller notes that he expects to launch soon with a few Fortune 500 employers.

Stay tuned …

Photo: Bind