As part of an expanded Series B-1 financing, JPMorgan’s business unit, Morgan Health, has made a $30 million investment in Centivo, a health plan for self-funded employers.
With this investment, Announce Tuesday, Buffalo, New York Sentivo In total, $148 million was raised. The company has 11 other investors, including B Capital Group, Bain Capital Ventures and Bessemer Venture Partners.
Centivo’s chief commercial officer and co-founder Stuart Roth said that Centivo will use Morgan Healthfunds are used to improve its products, expand its presence in current markets, expand into new markets, and develop and build new capabilities. One of the new features is virtual primary care.
Morgan Health chose Centivo because of its focus on providing low-cost coverage, Clare Crushing, executive director of external communications, said in an email.
“The specific added value of Centivo for employers and employees is that it offers affordable coverage options with predictable (and lower) out-of-pocket costs compared to traditional insurance,” Crusin said. “This is in addition to a network of efficient physicians and providers who are actively involved in patient care in a meaningful and proactive way.”
Launched in 2019, Centivo only sells its health plans to self-funded employers with at least 51 employees. This allows the company to negotiate lower rates than competitors, Roth said. These competitors include large traditional payers such as UnitedHealthcare, Aetna or Cigna. These health insurers have several business segments that target health insurance, the personal market, or business/employer. But in this case, if payers negotiate too aggressively with suppliers in one market, it could threaten other markets by requiring payers to relax negotiations.
“We’re only focused on the self-funded employer/commercial market (we don’t have other businesses) so we can negotiate aggressively and have an opinion on who’s in and out of our proprietary, high-performance network,” Ross said. “These in-network providers are often very willing to work with us to lower the fee structure because in return we will send so many patients their way, rather than sending them to competitors on the street who are not included in our network .”
This ability to actively negotiate reduces costs for employers.
Centivo’s employer client has two options for its employees: it can offer its existing health benefit plan to Centivo’s plan, or it can completely replace its health insurance product with services offered by Centivo. Like any health plan, the latter provides administrative services such as payment of claims, member care and education, and documentation.
As the healthcare industry moves towards value-based care, Centivo is also creating its provider network based on these principles.it Contracting specific physicians with a proven track record of value-based care, where payments are made based on improving patient outcomes and reducing costs, rather than a fee-for-service model where providers are paid based on volume, Roth said.
Centivo’s health plan also removes some barriers to getting care, such as high deductibles.Ross said Provides free primary care with no deductible and predictable copays. The average employee out-of-pocket costs about $350 a year, compared with the industry average of $800, Roth said. The typical American has about $500 on hand for emergencies, and about four in 10 Americans live on paychecks, Ross said.
If Ross is to be believed, the company’s approach to health insurance is already paying dividends to employers. He said Centivo saves customers 15% to 30% annually on healthcare costs compared to other traditional insurers. Centivo charges its customers a flat monthly fee per member, but Roth declined to disclose its pricing information.
Morgan Health’s Krusing was equally stumped when asked if he had set any performance metrics Centivo would have to meet in lieu of the investment.
Other recent investments by Morgan Health include Vera Overall Health, a primary care company and Embold Health, a healthcare analytics firm. The spokesman said the investments were part of efforts to develop responsible healthcare.
“Our venture capital team has a fairly strong pipeline of companies who review and evaluate potential investments, looking at companies that can successfully and strategically help accelerate the growth and adoption of Responsible Care in the commercial marketplace,” Crusin Say. “Centivo fits the ideal profile very well.”
Photo: Nuthaut Somsuk, Getty Images
