Posted on Tuesday, Jul 18th 2017
Over the past few years, there has been an added focus within the global healthcare industry to reduce costs and manage resources more efficiently while improving patient care. To meet these pressures, healthcare organizations including physicians and insurance service providers have become data driven. San Francisco-based Clover Health is a Billion Dollar Unicorn club member making big strides in the industry.
Clover Health’s Offerings
Clover Health was founded in 2014 by serial healthcare entrepreneur Vivek Garipalli and Yammer’s founding engineering team member Kris Gale. Prior to setting up Clover Health, Vivek had founded CarePoint Health, a fully integrated healthcare system in 2008. The two set up Clover Health with a mission to improve the quality of life of insurance members and physicians. Through his experiences at CarePoint Health, Vivek had realized that there existed significant friction between the doctors and insurers. Through Clover Health, he wanted to build an insurance model that aligned with physicians, reduced the doctor-insurer friction, increased visibility into the health of each patient, and thus ultimately led to improved care.
Today, Clover Health offers Medicare Advantage products and leverages technology to get better insights into members’ healthcare. Medicare Advantage, is a private HMO version of traditional Medicare, and had more than 18 million seniors and disabled people as its members in 2015. It paid out more than $170 billion in taxpayer-funded, capitated revenue to health plans in 2015.
Clover Health’s data and analytics platform uses continuous, real-time monitoring to drive preventive care to its members, thus reducing hospital admissions, avoidable spending, and better managing chronic diseases. It works by tracking inputs from a person’s medical history and identifying the highest-risk patients from insurance claims. Its platform then works with the members to help them become healthier by encouraging them to take prescription medication or manage their chronic diseases so that it can reduce its overall costs by reducing the rate of hospitalization.
Clover Health’s biggest competitors are larger players like UnitedHealth Group and Humana, which are the two largest private Medicare insurers with more than 6 million people covered between the two. Clover has 25,000 Medicare Advantage members as of May 2017, up from more than 16,700 in May 2016. It sells a plan with no premium beyond regular Medicare premiums, and requires no co-payments for primary-care visits and offers free generic drugs. It is also more member friendly as it does not charge members anything extra for going to out-of-network hospitals or doctors. It currently operates in New Jersey and is looking to expand to other states.
Clover Health’s Financials
Clover Health does not disclose its financials, but it is still unprofitable. It lost $34.6 million last year, which is seven times more than the previous year. It was fined nearly $110,000 last year by Medicare officials for misleading marketing material.
It has been venture funded with $425 million in investments from AME Cloud Ventures, Arena Ventures, Athyrium Capital Management, Brainchild Holdings, Casdin Capital, Coalescence Partners, Expanding Capital, First Round, FLOODGATE, Grape Arbor VC, Greenoaks Capital, Alphabet’s GV, Nexus Venture Partners, Refactor Capital, Sequoia Capital, Social Capital, Spark Capital, Summit Action, and Wildcat Venture Partners. Its last round of funding was held in May this year when it raised $130 million at a valuation of $1.2 billion.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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