Employee Benefits, Payers

Efficacy of benefits programs in question, but Humana pumps $20M into benefits-tech firm Accolade

Humana hopes to improve employee engagement through its partnership with employee benefits tech company Accolade even as research shows that many benefit programs are not effective.

Benefits-technology firm Accolade Inc. is counting on a new investment from health-insurer Humana to advance the growth of its products, which are designed to drive consumer engagement with their employer-sponsored health benefits.

The two companies have been working together since March on a program known as Humana with Accolade. Last week, Humana said it invested $20 million into the partnership and that it has been testing the Humana with Accolade program in two Midwestern cities: Milwaukee and Cincinnati.

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Humana provides insurance and other employee benefits, such as its Go365 wellness program, while Accolade focuses on helping people understand and access their benefits. To do so, the firm relies on a mix of machine learning, data integration and human navigators, including doctors, nurses and pharmacists, as well as non-clinical assistants.

“We think that is the combination that consumers really need to make smart decisions in health care,” said Stephen Barnes, CFO of Accolade, which has dual headquarters in Seattle and Plymouth Meeting, Pennsylvania, a suburb of Philadelphia.

The pilots in Milwaukee and Cincinnati have shown some promising results, Barnes said. And the Humana with Accolade program is expected to be available in more markets in 2020.

Humana has “invested in a handful of some great, innovative companies, and we’re really proud to be one of them,” Barnes said. He noted that the two companies share a focus on creating a personalized experience that helps consumers make better healthcare decisions, which can lead to better outcomes and lower costs.

This kind of partnership between a benefits health tech firm and a payer is not uncommon. Castlight Health has a relationship with Anthem, by which Anthem uses the San Francisco public company’s tech platform to help employees of self-insured employers manage benefits. The goal of these payer-benefits-tech collaborations is to improve employee engagement, which historically has been low, and reduce costs. Some research has shown that these programs bring little benefit. In fact, one recent study found that while employers are not seeing results from investing in these efforts, they continue to spend the money.

However, Louisville, Kentucky-based Humana is betting that its partnership with Accolade will bear fruit.

“Accolade is doing highly unique work in the healthcare space, as their connected platform and personalized service create impressive member satisfaction and value for employers,” Chris Hunter, president of Humana’s group and military segment, said in a statement. “Given our existing relationship, we see the opportunity for Accolade to emerge as a key element of the value proposition for Humana’s employer group business, further enhancing the benefits of the service to our joint customers and their members.”

Founded in 2007, Accolade employs slightly more than 1,000 people at four offices, including Prague and Scottsdale, Arizona, in addition to Seattle and Plymouth Meeting. Accolade has attracted previous investments totaling about $217 million. Its backers include Andreessen Horowitz, Madrona Venture Group and McKesson Ventures.

The company initially focused on large, self-insured employers. Its customers include Lowe’s, Comcast and American Airlines. They pay a monthly fee per employee. But over the last few years, Accolade has been developing lower-cost versions of its products that can appeal to middle-market companies with less than 5,000 employees, Barnes said.

“We’ve invested a significant amount of capital, both people and dollars, in building a technology platform … in order to enable us to have these multiple price-point offerings,” Barnes said, adding that middle-market firms have been a source of growth for Accolade. The company serves nearly 1.5 million consumers overall.

The company mines billions of medical claims to generate recommendations and questions for consumers who interact with its human assistants. The Humana investment will cover work to integrate the two companies’ systems, easing the flow of claims data between them, among other work, Barnes said.

Accolade also has a partnership with Philadelphia-based Independence Blue Cross, Barnes added.

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