Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Insurance – Zero Deductibles, Free Primary Care | Centivo CEO Ashok Subramanian
75 Plays1 month ago
In this episode, we sit down with Ashok Subramanian, founder and CEO of Centivo, a company rebuilding employer-based healthcare to make it radically more affordable. Before founding Centivo, Ashok launched Liazon, a benefits marketplace acquired by Willis Towers Watson, and began his career at McKinsey.
Ashok shares how Centivo is tackling the root causes of rising healthcare costs by centering plans around primary care, eliminating deductibles, and aligning incentives between employers, employees, and providers. He explains why the current “one-size-fits-all” model of employer coverage fails a diverse workforce, and how a more personalized, coordinated approach can improve both cost and quality. Finally, Ashok offers a vision for the future of employer-based care: one where affordability, access, and trust define the healthcare experience.
Recommended
Transcript
Introduction to the Podcast and Guest
00:00:00
Speaker
Welcome to the Healthcare Theory Podcast. I'm your host, Nikhil Reddy, and every week we interview the entrepreneurs and thought leaders behind the future of healthcare care to see what's gone wrong with our system and how we can fix it.
00:00:16
Speaker
Today's guest is Ashok Shubhamanian, the founder and CEO of Centivo, a health plan that's reimagining employer-based health insurance from the ground up. Before launching Centivo, Ashok founded Liaison, which is a pioneering benefits marketplace that was acquired by Willis Towers Watson.
00:00:31
Speaker
And he began his career at McKinsey advising insurers and providers. The U.S. healthcare system, especially the employer-based insurance model, often fails to help the people it's meant to serve.
Innovative Health Plans and Incentives
00:00:41
Speaker
We discussed this episode and how he's on a mission to make healthcare care radically affordable by centered around health plans and primary care, and limiting deductibles and aligning incentives between employers, employees, and providers.
00:00:54
Speaker
Hi, Ashok. Welcome to The Healthcare Theory. Thanks for having me. Of course. And before we really get into what you're doing today with um Centivo, you started your career at McKinsey working closely with health insurers and providers.
00:01:09
Speaker
And looking back, were there any projects or moments that really made you question whether the system was actually working for the people was supposed to serve?
00:01:19
Speaker
Yeah, so Nikhil, first of all, ah congrats on putting this together. it's it It sounds like something that's really necessary to to educate people about all the things that are happening in this world of healthcare, employer healthcare, care health insurance, however you want to define it.
00:01:33
Speaker
um So from ah for my time at McKinsey, I learned a lot about in In many ways, it's almost ah it was postgraduate education in in how to think, how to structure problems.
00:01:49
Speaker
um And I learned about different parts of the industry. i didn't do a lot of work ah specifically in the pair provider um angle of
Founding Liaison and Employer Roles in Healthcare
00:01:59
Speaker
things. So I would say in terms of understanding the pain points and the problems and things that led to um starting First Liaison and now Centivo,
00:02:11
Speaker
Those, I think, came from realwor real world practicing um and you know getting in front of people and talking to employers and talking to um providers and and and other stakeholders.
00:02:23
Speaker
So you know for me, i think the opportunity that I got at McKinsey was more about um determining that I really wanted to try startups and And now I've done a couple since the 18 years i left McKinsey. It's long time ago.
00:02:41
Speaker
But less about sort of the the problems in the ecosystem, as as as you asked about. Of course, yeah. And your morriss your most um recent venture before Cintiva, Liaison, um was eventually acquired by, of course, as you know, Willis Towers Watson. And it was all about empowering employees to make smarter choices about their benefits that they get through their employer.
00:03:01
Speaker
And I'd love to hear, like what was that journey like building Liaison? And what did you learn from building that company that shaped how you think about employers' royal and role in healthcare care today, especially within the U.S.?
00:03:12
Speaker
Yeah. So every every journey is tough. Every journey has its ups, has its downs, has its moments of um near-death experiences and and despair and and obviously moments of of success.
00:03:24
Speaker
So the the real learning was employers, for the most part, you want to do better. like they They want to a be able to offer cost-controlled products. They want to be able to offer um more choices, more advice, the ability to be more personalized to their increasingly diverse and heterogeneous workforce.
00:03:46
Speaker
But they don't feel like they have the tools to do that. And so Liaison was an early step into a technology-based solution that would create a shopping environment, a marketplace that would allow people to ask um and And get answered a handful of questions to better understand themselves, their families, their risk tolerance, um what other income that they might have in case of need.
00:04:07
Speaker
and And we were really able to, through that, do a couple of things. One is we were able to help people. better personalize a variety of products to what they actually needed from a benefits perspective.
00:04:19
Speaker
And the second is I think we surfaced that there were real opportunities to help address that people's needs are often very different than what their human resource teams or what the insurance consultants or brokers might believe that their needs are in the areas of healthcare. care um and And I think those opportunities to personalize, those opportunities to scale, those opportunities to use technology to drive it to better outcomes were all things that we definitely got a lot of experience at at Liaison.
00:04:47
Speaker
Of course, yeah. And it's very unique that in the US, we have employers really being in this care process. Like think about the UK, Germany, Canada, either it's a single payer or you have a variety of pairs, but it's not connected to the
Challenges in the US Healthcare System
00:05:00
Speaker
employer. where And when the employers are connected,
00:05:03
Speaker
it really messes up the incentives where they have incentives to like cut costs, but also provide care. And you don't have patients picking their own care, which creates a whole host of problems, which of course is like fundamentally kind of difficult in the US. And I'd love to really hear your thoughts on how kind of the US's healthcare care system, especially within employer care, is one of the systemic problems with that. And how do you think it's fundamentally misaligned from what other systems in other countries might be?
00:05:29
Speaker
Yeah, so one thing that's important to keep in mind is employers do have a role in a number of markets, usually at the level of supplemental coverage. So in the US, what is unique is the that it's not single-payer, that there's multiple private payers.
00:05:44
Speaker
and that the health benefit is primarily, not counting Medicare, you delivered through employers. Whereas in France, in the UK, even in Canada to some degree, there is a base level of coverage from the government, and then there is the opportunity for employers to enrich that as a means to attract and retain talent through supplemental programs.
00:06:08
Speaker
So I think the, what are some of the problems as you laid out? So the first is the workforce is not one size fits all. Employers have to often try to come up with a carrier, a network, a level of coverage that tries to cater to the, ah you know, ever elusive average person, but no person is the average, right? People, some people are younger, some people are older, some people have families, some people are single, some people are heavy utilizers.
00:06:37
Speaker
Some people have the ability to um use ah income or wealth to offset a near-term cash flow issue. Most Americans have no money in a bank account in in an effort to address ah an emergency situation.
00:06:51
Speaker
So the employer is really in this impossible position of trying to make everybody happy. And more often than not, they often lead to having nobody be happy when they're trying to cater to a one-size-fits-all answer to a heterogeneous population.
00:07:05
Speaker
In healthcare, care and I'll pause on this, but in healthcare, care it's even more exacerbated because at the end of the day, most healthcare local. Virtual care might change some of that, but ah healthcare, care doctors, hospitals, urgent care are delivered on a local level.
00:07:20
Speaker
And employees are obviously local, but employers are having to increasingly make decisions for ah workforce that's distributed across 50 states. Right, yeah, of course. And it's really hard for employers to solve this problem, which is why we have like brokers as intermediaries between the system. But it's also interesting. I mean, your first startup was really about adding as much choice as possible, letting employers or employees be able to navigate and pick their own benefits, whatever if fits their interests. But also when you provide people too many choices, it can also make them hard for make it difficult for them to pick the right decisions, both for the employers and the employees.
00:07:56
Speaker
So within employ and the employer care market right now, like what are employers doing to ensure like what was the predominant solution before Centivo that um they're using to navigate this problem and really provide the best plans for their patients? Because, of course, there was no best solution, but i' would love to hear what was the incumbents looking like.
00:08:14
Speaker
Yeah, so the the the premise behind liaison was as any good marketplace with some decision support, there were millions of combinations of products and networks and services that could be provided. And we really expanded the definition beyond just health insurance to various forms of other coverage, what's known as voluntary benefits, supplemental coverages, accounts of putting money in your HSA, putting money in an FSA if appropriate, and other forms of protection, pet insurance and and and so on.
00:08:44
Speaker
So we really tried to take the information and display it as packages to get to the first, second, and third best option. And people could could navigate those or they could choose to build their own and and and build from scratch.
00:08:57
Speaker
But that was our attempt to create some order out of the chaos, as you mentioned, when you give people a lot of choice. um Centivo is different. So Centivo um has been an effort to basically say, as good as a navigation or marketplace model might be, the fundamental generational issue of our time is healthcare is simply too expensive.
Centivo's Cost-Reduction Strategy
00:09:19
Speaker
And by being too expensive, we are crowding out the corporate dollar that is should be going to compensation, should be going to other discretionary forms of um talent and rewards strategic initiatives, and is instead being eaten away in the form of healthcare care inflation.
00:09:39
Speaker
And from an employee perspective, um again, large swaths of the American workforce have not had a raised net of inflation ah Due to many reasons, globalization, automation, ai increasingly nowadays.
00:09:53
Speaker
But oh, by the way, healthcare care costs is and is is a non-insignificant reason why people have not been able to live and have a better quality of life than frankly there um their parents were. So we've attacked this different from a navigator solution by basically saying you can offer a first dollar coverage plan, a to use technical parlance, a 95% or better actuarial value plan.
00:10:19
Speaker
You can do that while reducing costs by 20%, but you have to do that by attacking the root of the cost problem. And the root of the cost problem, we attack in two ways. The first is lowering unit cost by directly contracting with those providers in markets that are of appropriate quality but are more cost effective than others.
00:10:39
Speaker
And number two, by centering the plan experience within either a virtual or a physical based primary care model and enabling the primary care relationship and the trust that people have with their primary care teams to better manage the utilization that people have in their program.
00:10:54
Speaker
So lowering price times lowering quantity typically leads to lowering cost, last I checked. And that's what we're experiencing at Cendigo. Of course. Yeah. And soon, I really want to get into why our current system is not really centered around value-based care providers and the importance of centering it around primary care. But before we do that, I mean, you had this problem where it's it hard for employers to get a one size fits all solution to fit a heterogeneous population.
00:11:20
Speaker
What made you decide to work on a health plan instead of maybe have, have you seen startups with the help that are AI enabled to help startups that, sorry, you see startups that are AI enabled to help employers pick other plans.
00:11:32
Speaker
And you see a lot of other startups in different areas of this healthcare insurance stock. And what made, what made you think that healthcare care plans was the place that you wanted to go after your first venture out liaison? Yeah, um it was from the experience that healthcare care costs were eating up most, if not all, of the benefit dollar that um the employee was putting together in their benefits package.
00:11:56
Speaker
So when you really gave empowerment to people to see how much money an employer was spending on their behalf and the full price tags of the cost of those plans, what eventually you basically could not come to terms with, there's no way to get around the fact that all the dollars are going to health insurance and all the dollars are going to health insurance. And, you know, we'll get to it, as you said, in relatively ineffective and inefficient ways.
00:12:23
Speaker
And, and so that sort of created the opportunity to say, once you find a new problem, let's go attack that with a potential solution. Right. Yeah. Cause that, that is the root cause behind this entire issue, right? It's better probably to kind of create that health plan instead of making solutions that are a bit adjacent, might well tackle the root cause. And that's great.
00:12:41
Speaker
And I really want to hear, I mean, value-based care providers, right? They're the ones that care is generally supposed to be centered around. They're the ones you do that's who you build a relationship with. But for most people, that's not exactly where their care is centered around. They have like ad hoc visits with others and that's just generally is inefficient in the care system. So we'd love to hear how, um I mean, i know you spoke around like how there's a great awakening about like primary primary care being the bedrock of an effective health plan.
00:13:09
Speaker
We'd love to hear more on this. Like why is primary care so integral? to providing good health care at low cost? And how does that lead us in TiVo kind of navigate that, making sure the best value-based care providers are the ones that enrollees are seeing rather than others that might drive up costs and be more inefficient?
00:13:34
Speaker
are you muted um is your bit Sorry, Sorry, I cleared my throat. okay Just restock and edit that part out. Don't worry.
00:13:44
Speaker
So Nikhil, there's two or three parts to your question that are important. And I think first is the typical employer spends about 5% on primary care. Actually, at Centivo, the typical employer spends about 12% on primary care. We'll get to that in a second.
00:13:58
Speaker
But while primary care is a is a small portion of total spend, primary care actually controls through referral patterns and otherwise about two thirds of spend.
00:14:10
Speaker
So the opportunity to better navigate, better manage spend through an entity with which a person already trusts and therefore will, no pun intended, follow doctor's orders.
00:14:23
Speaker
Certainly we find more effective than a third party navigator or worse picking healthcare and getting advice through billboards, Yelp, word of mouth, um those tend to be very ineffective.
00:14:35
Speaker
So in trying to corral both the combination of cost control as well as high trusted leverage, you know we came back to primary care as the right place to center the plan.
00:14:48
Speaker
In fact, we believed in it so much that in addition to working with local primary care through our provider partnerships on the ground, we also first incubated and then decided to scale through an acquisition. We bought a company last year, Eden Health,
00:15:01
Speaker
the ability to offer advanced primary care, you know, 50 states ah completely through the cloud in ah in a digital first modality. And we found that about 22 to 25 percent of our total patients actually like to use digital primary care, virtual primary care as their medical home, as opposed to assuming that they have a relationship locally that they might want to use.
00:15:25
Speaker
So what we found is really through the combination of centering the plan on with primary care and removing the barriers to use primary care, what we're finding is a 34% utilization increase in primary care relative to the typical plan, a two and a half increase.
00:15:44
Speaker
X increase, 250% increase in the amount spent on primary care, which is paying itself back through ah three to five to one ah ROI.
00:15:55
Speaker
So that is reducing yeah ER visits substantially, inpatient visits substantially. It's improving medication adherence. And therefore, what we're finding is not only a year one cost advantage, typically 15% or more, but we're actually finding a year over year trend improvement that from typically 4%, 6%, 7%, 8%, 9% based on your size of company to we're finding a typical annual trend closer to about 2.2%.
00:16:22
Speaker
So lots of advantages from a primary care perspective. Year one cost, year two plus cost increase control, and being able to leverage that establishment of trust between person and primary care is helping drive a lot of other really positive clinical access outcomes.
00:16:40
Speaker
Of course, yeah, because I guess what most people don't think about is, of course, you see your primary care provider, but they're the ones referring you to the more expensive procedures, whether they're inpatient, outpatient, or whatever they might be.
00:16:51
Speaker
And that's what drives up the costs. And we'd love to actually get into details, though. I mean, you have this overall plan with Centivo that's structured around the employer, and they're the ones centering care, making sure it's allocated, patients get good outcomes at low cost.
00:17:04
Speaker
But tangibly, like, what does this plan look like in terms of the deductible, which um well a lot of will surprise a lot of people? And then, of course, the other details
Centivo's Plan Structure and Accountability Model
00:17:12
Speaker
of the plan. We'd really love to hear you get into that and how exactly, um like, what was the first principles that used to rethink what this plan should look like? Like, what were they structured?
00:17:21
Speaker
Yeah, I love the question around first principles. So we really tried to start with, if you're going to build a new modality, almost like going from the horse and buggy to the to the automobile, yeah lets let's not assume that everything has to be the same.
00:17:36
Speaker
So while we are flexible and we'll work with employers to meet their own objectives on on all fronts, um We come to the table with some with some core principles. So the first principle is that all primary care should be free, regardless of whether it's a sick visit or a well visit.
00:17:53
Speaker
That's very different from where we've lived the last 15 years of having all well visits covered, but then all sick visits subject to deductible and coinsurance. The second is we ah zero out the deductible, so taking away financial barriers to care.
00:18:11
Speaker
And the third is to remove coinsurance and replace them entirely with copays. The idea is that predictability signals affordability. If I know exactly how much something is going to cost before I walk into the office, um number one, it'll feel to be affordable as opposed to guessing 20% of what unknown number.
00:18:30
Speaker
And two, I'm more likely to adhere to a care plan if I know that the follow-up visits are co-pays. We have some employers who have gone taken that all the way and they've basically said, i actually like zero primary care, zero deductible, and zero co-pay.
00:18:45
Speaker
So the only out-of-pocket costs are urgent care and emergency room. We have others who um have been a little bit more traditional. But it's been really gratifying to see the fact that two-thirds of our members on the plan who adhere to those 000 principles, two-thirds of them are spending less than $100 per year in out-of-pocket cost. It's a remarkable level, dare I say, a radical level of affordability.
00:19:14
Speaker
Yeah, and that's incredible because a lot of the times I think people's deductibles in certain years can be multiples higher than their savings. And of course, as you mentioned, I mean, wage growth is being outpaced by healthcare care cost growth, which of course we don't want to see. And one thing that I thought was really unique is that there's no, generally there's no deductibles with the plan of centivo.
00:19:32
Speaker
And this is a big departure from the norm. One of our guests who we'll be speaking with later, Dr. Newhouse, led a very famous study with the Rand Insurance Experiment, basically seeing what, had two patient groups, patients with a high deductible plan, patients with no deductibles. And he found that when you increase the deductibles, it doesn't necessarily, people use more healthcare, care basically, right? when Because when you lower costs, basic econ, when you lower costs, demand goes up.
00:19:58
Speaker
But what he did find out was that when you do lower costs, it doesn't necessarily mean care will be better because um oftentimes people um end up using, like they use less, they use more of inefficient care and they use more efficient care simultaneously, right? Because they don't know exactly what the best care is to use.
00:20:17
Speaker
And it seems like, i mean, how do you guys navigate this to ensure that when you're lowering costs, people are using care more effectively and only working on more efficient forms of care instead of, of course, like the famous example, like going to the ER for a headache.
00:20:29
Speaker
Yeah. So the main reason, the main we do that by managing the supply side and the demand side. So on the demand side, it's telling an employee, look, zero, zero, zero is the richest plan you've had certainly in 35 years, probably in 50 years if you're old enough.
00:20:45
Speaker
But there are there is some shared accountability to get that zero primary care, zero deductible, zero coinsurance plan. Yeah. And that is you need to work with your primary care team.
00:20:56
Speaker
And it can be really easy if you choose to work with a virtual primary care like ah like our own Centivo care practice, where most of your care interaction is now app enabled and you can talk to a clinician if needed.
00:21:08
Speaker
But the the shared accountability is you get that level of rich benefit, but you need to work with your primary care team, and that primary care team will make good clinical decisions on whether it's appropriate for you to have a referral. And if it's appropriate for you to have a referral to a specialist, who is that appropriate referral? Can it be done virtually? Can it be done through an e-consult where the PCP is actually getting the specialist advice on an issue of cardiology or GI or oncology and not even having the member go out and and and do something?
00:21:39
Speaker
So that's a way to control cost. Or, of course, if you do need to be referred out from the medical home, that it's being done to a high quality provider, it's being done to a provider that this primary care team can stay in touch with, get clinical notes, make sure everything is loaded into the same you know yeah EMR platform and really have a shared view to manage the patient.
00:21:58
Speaker
So on the demand side, the accountability is that you need to work with your primary care team, you need to get referrals, your care needs to be coordinated. On the supply side, we manage that by working with partners who are already as much as possible pre-integrated.
00:22:13
Speaker
So these are folks who have protocols to work together, protocols to share data, protocols to coordinate care. So we don't end up putting people into this fragmented mess of a healthcare system that we typically have today when you're just trying to self-guide through a PPO network.
00:22:32
Speaker
Yeah, exactly. That makes a lot of sense, actually. I mean, this entire system is, and when you use an employer as an intermediary, I'm sorry, employer, the primary care provider as an intermediary, it helps dictate what care is being spent and what where where care is like most effective.
00:22:47
Speaker
And that's, of course, great. And what what do why do you think other bigger insurance companies, like your bigger competitive competitors that work with self-funded employers or work um with bigger health plans? Like, why do you think they've not adapted the solution just yet um and really centered around primary care?
00:23:03
Speaker
It's hard to do. So there are definitely entities that reward primary care. There's definitely entities that um have tried to do things to drive affordability. But ultimately, the legacy insurance carriers, for the most part, have grown to a place, I guess it's a symptom of success, where they have to be things to all things to all people.
00:23:24
Speaker
They have to have a broad network because that's ah the majority of their business. They then can have narrower networks, but they have to be thoughtful about how to narrow those given that they have relationships with the the all of the providers in their broad networks.
00:23:38
Speaker
They have primary care center models in some cases, but um they need to make sure that they're managing the confusion of having a certain set of rules for some plans that don't apply to other plans.
00:23:49
Speaker
That creates member confusion. It creates provider confusion. um They have big books of business on the Medicare side and on the insured side, and they're often negotiating rates that are differentiated for those books of business where they feel like it's their money as opposed to those self-funded employers who are spending self-funded employer money or, if you will, other people's money from the perspective of that insurance carrier.
00:24:12
Speaker
So it's hard for big organizations to be all things to all people and not have it devolve into, again, lowest common denominator like thinking.
00:24:25
Speaker
And that creates an opportunity for people. younger companies for startups to laser in on not just an idea, but on the business process to operationalize an idea in a more narrow way to satisfy ah segment of the market.
00:24:43
Speaker
And in in this case, it's the segment of the market that's sick and tired about of the lack of affordability in a traditional health plan. It's not dissimilar from going back 40 years ago or 50 years ago,
00:24:54
Speaker
Southwest Airlines basically saying we can serve certain parts of the market differently through a single type of aircraft and through point to point service. um And we're going to do that in a way to wedge up against those carriers that are tied to a legacy hub and spoke architecture, sort of a similar disruption mentality.
00:25:14
Speaker
Of course, yeah. And I do this one question I was interested in getting your thoughts on. Of course, um I'm assuming this was intentional, but Centivo sounds just like incentives, right? And that's kind of a fundamental problem, just misaligned incentives in healthcare, care and you guys are helping align them. But we'd love to get a bit more granular into think hearing how you're actually tangibly aligning incentives between employer the employer, the employee, and the PCP, the primary care provider.
Alignment of Incentives in Centivo's Model
00:25:39
Speaker
um It seems like you have kind of aligned incentives pretty well with the employer and employee by centering it on the primary care provider. But how do you incentivize the primary care provider specifically to ensure that these care outcomes are great while still not over utilizing care, which of course would be um the opposite incentive of the employer?
00:25:58
Speaker
Yeah. So the primary way we do that is non-visit-based compensation or what's known as capitated or subcapitated financial arrangements. So um our Centivo care practice is capitated entirely on a per member per month.
00:26:12
Speaker
So use it as much as you'd like, and it's free to the member and it's a flat fee to the employer. um With many of our community practices, we have a similar capitated arrangement um with our local direct primary care partners, with on-site clinic partners, with near-site clinic partners.
00:26:31
Speaker
Similarly, it's on a capitated basis. um And then for local providers that may be under a fee-for-service contract, We try to have a hybrid arrangement by which they can earn 35% to 50% of their compensation through PMPMs, through reward payments, um for hitting metrics that matter um to a commercial population.
00:26:51
Speaker
So ultimately, what we're really trying to do is mimic some of the good practices from risk-based arrangements, doing so within the context of a self-funded employer. and doing so in a way that really gets as much primary care compensation out of being tied to utilization as possible.
00:27:10
Speaker
Exactly. Okay. That makes a lot of sense. Yeah. And of course that helps i mean dictate and clarify those outcomes. Yeah. um A couple last really quick questions. Of course, you guys have raised quite a bit, a considerable bit of funding, which is needed in a space like this because whether it's selling to brokers or selling to employers, like that's expensive to get to market.
00:27:27
Speaker
um Like what have been the biggest challenges so far in achieving this product market fit and scaling this plan in such a regulated and overcomplicated industry? And how'd you overcome those plants challenges over the past couple of years?
00:27:41
Speaker
Yeah, it's a really great question. So we have um specifically taken a very hard problem on because we feel like, number one, that the the hard problem is building your own primary care and building your own networks.
00:27:57
Speaker
That's very different from most entities who try to um either use partnerships or effectively try to build a solution that sits on top of a legacy broad network. doing the Doing it that way is easier, but doing it that way doesn't structurally lower the total cost of care.
00:28:13
Speaker
So we decided to be very focused on how do we take out that 20 plus percent for total cost of care? And that's going to be hard to do. And it's going to take more capital. But once you've done that, then number one,
00:28:25
Speaker
You've proven that you have a very defensible moat. And number two, you can scale more easily because you've proven that there's a structural cost advantage to what you're doing as opposed to you know maybe maybe getting a percentage or two here or there.
00:28:39
Speaker
So that's been um a real source of the capital. usage, which is to build markets, to build networks, to build proprietary products. And then we've also built out the entirety of a health plan administrator function.
Centivo's Growth and Vision for Healthcare
00:28:52
Speaker
um So we don't rely on third parties in that area either. So it's taken longer to build, it's taken more capital to build, but it's gotten us to a place where the gross margins are getting very attractive and will get us to a place where over time we can deliver lots of value to employers, employees, while also making sure that there's a fair return for our shareholders as well.
00:29:15
Speaker
Of course, yeah. And I'm sure making your own like HPA a health plan administration administrator was not easy. And along with these other tasks of building a plan that aligns these incentives. And um I mean, i'm really I really love what you guys have done so far. It's in TiVo. And you've always and you talked about how making healthcare... You want to make it radically affordable. And you said that each employer should offer a plan that covers 90% of healthcare care expenses.
00:29:39
Speaker
And of course, that's a bold vision. And I was wondering, how do you see the... Kind of the industry as a whole, not just in Teva's clients, but the industry as a whole moving towards that standard. And what do you envision for Instantevo over the next couple of years as you guys begin to scale and see more clients or continue to scale and see more clients and serve more customers and enrollees?
00:29:59
Speaker
Yeah, so again, I go back to every employee should have an option that is 95% more actuarial value, that is radically affordable, and and let the employee, this is ah the bridge to the liaison model, let the employee decide if it's a good fit for him or her um ah relative to the financial trade-offs of a PPO or or other models.
00:30:27
Speaker
So I look forward to seeing that type of bold thinking where every employer says, I'm going to set the bar on a super rich plan and and let employees vote with their feet on whether the the the tradeoffs, if you will, to that plan are are tradeoffs worth making.
00:30:43
Speaker
We're now seeing in many of our clients um upwards of 80% of people opting for the low cost plan. And so some of the thinking that folks will not opt for a smaller network, folks will not want to have their care coordinated with a primary care team, um simply not true, as we see results over and over and over again with large numbers of people in a population choosing a plan with features like ours.
00:31:07
Speaker
So that's where I see things going. I see continued growth, geographic growth, growth in numbers of clients per geography, growth in membership you know within clients. And hopefully in doing so, there's a giant wealth transfer away from inefficient providers of healthcare and back into the pocketbooks of the working American.
00:31:26
Speaker
Okay. And that that's, of course, great. And really quick on that note. So you said like growth in a lot of different areas, like the geographies, the amount of clients in each geography. But in terms of growth and the amount of customizability that Centivo offers, like what are your out what's your outlook on that? Because, of course, um your initial startup maximized the amount of options possible, made it clear as possible. And now I'm trying to bring that back into healthcare care plans. like What exactly do you think would um that look like instead of providing in terms of providing a lot of optionality for these plans to ensure they fit patient needs?
00:31:58
Speaker
Yeah, I think at the end of the day, everybody should have choice, but what we've not done a good job is making the financial case obvious to the average person.
00:32:08
Speaker
So you shouldn't have to be an actuary, an underwriter, an insurance broker, let alone ah you know even a doctor, a nurse, a clinician, to be able to make your annual benefits decision. you know We buy cars without being mechanics um or ah you know working at a car company.
00:32:24
Speaker
yeah we've We've figured out ways to be good consumers of automobiles. So we should be able to, I don't believe people can be great advocates for themselves from a healthcare care consumer perspective. I think it's very hard to do when you're sick.
00:32:38
Speaker
or a family member is sick. But I do think people can be good consumers of their benefits decision or their health plan decision. And I think the more we see options, the more we'll continue to also see tools and resources to help navigate those options, specifically focusing on really helping people understand what that financial difference is from choosing a plan with zero co-pays and no deductibles, as opposed to plans that now increasingly have $3,000, $4,000, $5,000 deductibles.
00:33:06
Speaker
Of course. Yeah. And that sounds really, really excited to see how the, not only the future of healthcare changes, but how Centivo kind of play a role in shaping how employer-based insurance will look like. And um really appreciate you coming on today's show. We've loved hearing your journey and you're um your work, not only with McKinsey and your first startup or liaison, but now at Centivo. I'm going to have the link in the description for everyone to learn more and to contact um the company if they're looking for anything. But um thank you so much to the show for coming on today.
00:33:35
Speaker
Thank you for doing this.
00:33:39
Speaker
Thanks for listening to The Healthcare Theory. Every Tuesday, expect a new episode on the platform of your choice. You can find us on Spotify, Apple Music, YouTube, any streaming platform you can imagine.
00:33:51
Speaker
We'll also be posting more short-form educational content on Instagram and TikTok. And if you really want to learn more about what's gone wrong with healthcare care and how you can help, check out our blog at thehealthcaretheory.org. Repeat, thehealthcaretheory.org. Again, i appreciate you tuning in I hope to see you again soon.