Less than 15 months after digital health disrupter Glen Tullman’s Livongo was purchased by Teladoc for $18.5 billion, he’s raised enough funding to have his new startup, Trancarent, already valued at $1.62 billion. And yes, so welcome another company to that less and less exclusive and rare category of the healthcare unicorn.
The company helps self-insured employers give workers access to doctors 24/7 through the Transcarent app, and get medical services and medications at a price that’s discounted for the employer, with nothing out of pocket from the employee.
On Tuesday, San Francisco-based Transcarent announced its latest round of funding: a $200 million Series C investment led by Kinnevik and Human Capital, with Ally Bridge Group and top health systems including Northwell Health, Intermountain Healthcare and Rush University Medical Center also contributing. That brings the total raised by the company in just over a year to $298 million.
Other companies like Accolade and Collective Health are also working with self-insured employers scrambling to manage healthcare costs, with the aim to make things easier and more economical and ultimately improve care for employees with innovative solutions. But those companies are in the world of care navigation, a term that Tullman is no fan of.
“Health consumers want an experience they can understand and feel comfortable with, that provides unbiased information, trusted guidance, and easy access to high value care and that always puts quality first,” he said in the news release announcing the investment. “They want better solutions for everyday care, for medications, for surgeries, for care that is delivered where and when they need it, ideally at home and not always during the day, and for high quality solutions for complex care like cancer. And they want all of that in one place.”
Transcarent will use the money to invest in research and development initiatives. It also plans to expand its own team and explore additional markets, such as Medicare Advantage. According to the company, it currently works with more than 80 self-insured employers, re-envisioning the healthcare experience for over a million 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.
In October, Transcarent announced it was partnering with Walmart to make care more affordable and accessible for employees of self-insured companies. Under the partnership, employees are able to access everything from vision centers to testing and telehealth offered by Walmart. Instead of charging companies per employee and for all employees insured, Transcarent makes money by getting a cut of the discount its able to offer for healthcare services and medications. So when Walmart uses its buying power to lower the cost of medications, for example, self-insured employers get them for less and Transcarent gets a portion of the savings.
Investors in the round were full-throated in their endorsement of the company’s vision.
“For years, we’ve been anxiously waiting for more wide-ranging reform towards value in the healthcare industry and felt it has never been fully addressed – mostly because no one entity was willing to build a better end-to-end health and care experience from the ground up,” Christian Scherrer, investment manager for Kinnevik, who is co-leading the Series C funding round, said in a statement. “We see Transcarent as the first company to address the challenge head on in a new and different way that is focused, first and foremost, on the consumer.”
Other heavy hitters in healthcare agreed.
“Northwell Health has long been committed to doing our part to drive health reform in our region. It’s why we launched Northwell Direct to deliver high-quality employer health services tied to new payment models,” Michael Dowling, CEO of New York’s largest health system, said in the news release. “Today, we’re proud to be partnering with and investing in Transcarent as a way to accelerate our efforts on a national level.”
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