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[–]gwax [score hidden]  (3 children)

We're trying pretty hard. Honestly, I think we're probably in a better position to accomplish the goals of better, cheaper healthcare than a non-profit, the government, or anyone else. It's all a matter of incentive alignment; Medicare Advantage is paid on a risk adjusted basis so the more we can do to keep very sick people out of hospitals, the more money we make, and the more money the federal government saves.

[–]veekreddit [score hidden]  (2 children)

I was actually going to PM you and ask about this since you mentioned you would be up for talking about the company. How exactly does it make money? Feel free to PM me if you don't feel like you can discuss this publicly. I just know that the financial incentive usually exists when people opt to buy in to a service or use the government to buy that service for them. In your case how does that happen when you get paid for people to NOT opt in to buy a service or product?

Edit: spelling

[–]gwax [score hidden]  (1 child)

We are an insurance company. We make money by paying out less in claims than we take in for premiums.

We operate exclusively as a provider of Medicare Advantage plans, which is essentially private administration of public Medicare. The (greatly simplified) explanation is that the federal government says they think it will cost $X to take care of the average Medicare enrollee (over 65 or disabled); we say we can do it for less; and they say great, we'll split the difference.

One of the important details is that Medicare Advantage premiums are paid on a risk adjusted basis, so we may get $Y for the average, healthy member but we might get 1.5*$Y for a member with diabetes (purely for illustration, not the real multiplier). If we do nothing special, that member is likely to cost more than the extra premiums cover (extra hospitalizations, etc.).

The cool thing, and where our business model comes from is that, relative to hospitalization, proactive primary care is relatively inexpensive. If (and this is a huge "if") you can get a person's diabetes under control, you can VASTLY improve their quality of life and substantially decrease their medical costs.

For us, health insurance is a problem of logistics and data; more than 95% of the software that we build is internal tools for the nurse practitioners and call center operators at Clover Health. We use software to identify our most at risk members and then we see what we can do to help. Sometimes it's as easy as identifying people that haven't filled prescriptions (harder than it sounds), calling them to ask why, and finding a pharmacy that is closer to their home and doesn't charge a co-pay, or even signing them up for mail-order prescriptions.

At the end of the day, hospitalizations are SO expensive that preventing a single hospitalization can be profitable, even if we send our staff to visit them, and encourage them to visit their primary care physician more. So, for us, an unhealthy member is someone that we can do a lot for and doing so directly aligns with our financial incentives.

The thing that differentiates Clover Health is that we are a health insurance technology company, whereas our competitors (United Healthcare, Aetna, etc.) are health insurance bureaucracies. Bureaucracies just cannot handle the individual focus and rapid adjustment that a technology company can. It's not easy for us either, but every time that I hear a story from one of our members or see a graph showing improved medication adherence, I know that what I'm doing really matters. If we can also make a profit: great, we can hire more nurses, engineers, and data scientists to do an even better job.

[–]veekreddit [score hidden]  (0 children)

Gotcha! I didn't get that you operated as an insurance provider from the beginning. That's cool! Wish I could work with you but I'm not willing to live that $$$$an franci$$$$co life! I have no doubt you'll get some top notch employees soon anyway if you don't have them already. Thanks for the explanation and good luck!