Worried Sick: HealthBridge launch is a safety net for high-deductible insurance plans
2019 was a big year for HealthBridge, a Grand Rapids-based healthcare disruptor with a satellite office in Traverse City.
In February, the company officially launched the pilot program for its technology platform. That platform is an “employee financial security product,” designed as a safety net for individuals and families enrolled in high-deductible health insurance plans offered by their employers.
HealthBridge exists to help “bridge” the gap between what health plan members can pay and what they are expected to pay. When employers purchase HealthBridge, it sits alongside the employer-sponsored health plan as an extra protection for health plan members. When a member needs to make an insurance claim, HealthBridge steps in and covers those costs on the member’s behalf, consolidating these debts into a single monthly statement.
Strong reception among pilot program participants prompted HealthBridge to start expanding and aiming at a larger rollout in 2020 – a streak of growth that allowed the Traverse City branch of the company to “graduate” from its initial office at local tech incubator 20Fathoms.
Now, one year into business operations – and a few months past an official post-pilot Jan. 1 launch – HealthBridge’s leaders feel confident that they are headed toward a prosperous future.
“I think, by all accounts, our pilot went to plan,” said Amy Chambers, chief operating officer for HealthBridge. “We spent the year testing our hypothesis around the state that people need help with financial security when it comes to healthcare expenses.”
Chambers says that they launched at the “perfect time.”
“What we understand is that employers are paying about $20,000 a year for family premiums,” she said. “And what they’re finding is that those employee benefits are often a liability for their employees, because when you have an average out-of-pocket (deductible) of about $8,000 and the average American has no more than $500 in times of emergency, suddenly you’ve got this big exposure and there is no good way in the market today for any of the stakeholders to guard themselves against it.”
Chambers said the system is not unlike a credit card billing structure. With a credit card, instead of getting bills from multiple retailers or businesses, a cardholder gets a single bill from their credit card company that consolidates everything into one place. HealthBridge does the same with health expenses, at times consolidating bills from multiple hospitals, clinics, or doctor’s offices into one statement. Members then have the option to pay the entire statement upfront (for a 10% discount) or to pay the balance over a longer period of time, up to 24 months.
This concept – of changing the game with medical payments so that they aren’t so insurmountable – has been at the root of HealthBridge since the beginning. However, Chambers says the past year has taught the company a great deal about just how dire the situation is with healthcare costs. Not only can employees enrolled in high-deductible plans not afford their deductible payments, but many of them have so little confidence in their health insurance coverage that they are behaving as if they have no insurance coverage at all.
“The interesting thing in the last year for us is how much conversation we’ve had around how people are skipping care because of these high-deductible plans,” Chambers said. “And that’s people with high incomes and low incomes alike. The conversations we’re getting into are around how we can help bridge that gap and at the same time help with long-term health outcomes.”
The outcomes Chambers is talking about are the potential long-term consequences that people can face if they start skipping care. She cites a 2019 study conducted at Harvard Medical School, which looked at the impact of high-deductible health plans on breast cancer treatment and diagnosis.
The study found that low-income women enrolled in high-deductible plans skip care frequently, leading to potentially life-threatening delays in initial breast imaging screening (an average delay of 1.6 months), initial biopsy (2.7 months), diagnosis (6.6 months), and first chemo treatment (nine months).
These numbers – and other findings that highlight the perils of skipping care – have come to define HealthBridge’s goals for the future.
“I think we feel like we have an even greater mission now than we did when we started,” Chambers said. “We want to help people have more confidence behind that health insurance card.”
After keeping 2019’s pilot program deliberately small, isolated to just a few employers in west Michigan, HealthBridge is now ramping up. While Chambers declined to share numbers since officially launching to the broader market on January 1, she did say the company is continuing a steady ramp-up and is “hitting the metrics that we set out to hit.”
Greg VandenBosch, HealthBridge’s chief executive officer, added that the company has been invited to or is seeking out opportunities in 18 states. Further expansion throughout Michigan – particularly toward the east side of the state – is also in the cards for the near future.
VandenBosch says HealthBridge’s quick transition from localized pilot program to multi-state reach has been possible thanks to two factors. The first is the HealthBridge software itself, which was designed and built in Traverse City by chief technical officer Tim Heger and his local software team. Heger says that he and the Traverse City team put a great deal of work and “pre-investment” into the software to ensure that it would be scalable for fast growth.
The second reason VandenBosch sees for HealthBridge’s quick growth is market demand.
“We have not met an employer to date that said, ‘We have no need for this kind of solution; this isn’t an issue for us; healthcare affordability and insurance premiums aren’t a big deal; we don’t care about patients skipping care,’” he said. “This issue is front and center; it is one of the top issues that our clients are dealing with as organizations. So we’ve been pleasantly surprised (at the reception). We went into this business because we thought there was a big opportunity and I think 2019 confirmed that we were right.”
Chambers adds that workers themselves are starting to ask employers for new benefits or tools aimed at financial security. HealthBridge, which falls into that benefit category, is positioning itself to meet the growing need.
“There is a $24 trillion retirement industry and employers are one of the biggest contributors to it,” Chambers said. “They are focused on getting people ready for financial security in 20, 30, 40 years into the future. But what their employees are saying is: ‘We need help (with financial security) today.’ So this is going to be a big category of benefit, and we believe that we are going to be right in the middle of it.”
The demand could mean growth for HealthBridge, including expansion of the company’s Traverse City presence. Heger, a northern Michigan native, encouraged VandenBosch and Chambers to establish a Traverse City branch early on, eventually opening a 20Fathoms office where he worked for a time as the only local employee. In the past year and a half, the Traverse City HealthBridge team has grown from just Heger to include 18 programming and technology professionals. Heger says there are plans to add five to seven more jobs in 2020.
VandenBosch would even go so far as to call Traverse City HealthBridge’s “secret weapon.”
“We have investors that are from all over and one of the things we regularly ran into early on was the question: ‘Can you recruit top talent in Traverse City, Michigan?’” VandenBosch said. “And the answer is just a resounding ‘Yes.’ Tim has absolutely recruited top talent, and not just from Michigan. He’s recruited from Florida, Arizona, New Hampshire and New York, and these people are all moving to Traverse City.”
VandenBosch credits a new mindset for young tech talent in getting people to move to northern Michigan.
“People are moving to this area because they want to. In fact, we think that we are able to recruit easier in Traverse City than we are downstate in Grand Rapids, because there is a lifestyle that comes with being up there and it seems to be very closely aligned with what young tech talent want,” he said.
“That’s been great to show to our investors, who now fully support our Traverse City office. They’re not questioning us at all anymore, because Tim did exactly what he said he was going to do and built a world-class tech team up in northern Michigan.”
Pictured above: Chambers, VandenBosch (top) and Heger (bottom).