Starting a new insurance plan can be time-consuming, costly and difficult. One of the challenges is building systems to process claims, keep track of enrollment, and manage other administrative tasks.
While some insurers look to build these features in-house, it can be costly and time-consuming. Others partner with a third-party administrator (TPA) for this work.
Flume Health, which bills itself as a tech-forward TPA, is looking to make this process easier for insurance companies.
The New York-based startup, which was founded in 2017, initially worked with self-insured companies, such as a construction business in Indiana and an auto dealership in North Carolina. Now, the company is looking to work with insurers.
“Right now, building a health plan is like asking people to build a server farm in the basement,” CEO Cedric Kovacs-Johnson told MedCity News. “… For you to get to market, you had to build all this infrastructure and raise a bunch of money to do it. That’s a huge barrier as an entrepreneur to overcome.”
His goal is to streamline that process, by managing claims processing, enrollment, compliance, and payments to providers, brokers and point solutions.
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.
Currently, Flume works with a few insurance plans. It’s partnering with primary care startup Firefly Health, which recently launched a virtual-first health plan directed at small- and mid-sized employers.
“Firefly Health had this really compelling virtual primary care offering,” Kovacs-Johnson said. “They realized that their ability to affect downstream behavior was limited by the fact that they were plugging into health plans that had no context on what they were trying to do.”
Firefly Health CEO Fay Rotenberg said in a prepared statement that without Flume, the company couldn’t have launched its health plan in less than a year.
Flume also partners with stop-loss insurer Radion Health, which caters to small- and medium-sized businesses.
Health plans are changing. They’re including an increasing number of point solutions and apps, and thinking more about how members navigate their benefits. But the fundamentals, for the most part, have stayed the the same.
“The administrative layer feels like the big elephant in the room when it comes to healthcare transformation,” he said. “We feel that all of these solutions are sitting as a bolt-on on a very old system.”
In the future, he expects to see more health plans launch, some tailored to specific communities or groups of patients. His goal is to make it easier for them to get started.
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