Approximately 160 million Americans receive health benefits through work; however, employee healthcare costs are becoming a financial burden for many employers and this can negatively impact employees’ access to quality healthcare options. Centivo offers self-funded employers health plan solutions that are built to save 15% or more compared to traditional insurance carriers. Centivo’s ability to deliver low cost, higher quality healthcare is due to its network of high performing local providers, cutting-edge technology, and a dedicated primary care team. The plan offers free primary care, no deductibles, and predictable co-pays for specialist visits. The plan is presently available in Florida, New Jersey, Connecticut, New York, North Carolina, and Southern California.
AlleyWatch caught up with CEO and Founder Ashok Subramanian to learn more about Centivo’s growth since its pilot launch in 2019 in Florida and NY, future geographic expansion plans, and latest funding round, which brings the total funding raised to $70.4M.
Who were your investors and how much did you raise?
Centivo raised $34 M in Series B funding. B Capital Group led the round. New investors Define Ventures, HarbourVest Partners, and Nassau Street Ventures, an AVG fund, and existing investors Bain Capital Ventures, Company Ventures, F-Prime Capital, Ingleside Investors, Maverick Ventures, and Rand Capital also participated, as well as various individuals.
Tell us about the product or service that Centivo offers.
Centivo was purpose-built to serve the self-funded employer and allows them to offer a turn-key benefits solution that meets the needs of a diverse workforce. With Centivo, employers can offer their employees affordable and predictable costs, a high-tech member experience, exceptional service, and a range of benefit options including both traditional and proprietary networks. Centivo develops high-value networks in partnership with leading local healthcare providers and uses data analytics to refine the network and navigate members to the right providers. Members get a partner for all their healthcare needs through a primary care-centered model, as well as expanded access and fully integrated virtual care. Savings come from focusing spend on delivering high-quality care at the right place and time through coordinated care and by steering members to high-value providers.
What inspired the start of Centivo?
Centivo launched in 2019 to bring cost sustainability to employers and affordable, high-quality healthcare to the millions of Americans who struggle to pay their healthcare bills. Centivo aims to align incentives among employers, members and providers to deliver and use high-value healthcare.
How is Centivo different?
Centivo is a new type of digital health plan that is built to save 15% or more compared with traditional insurance carriers and is easy to use for employers and employees. We are laser-focused on managing employer costs and offer absolute financial transparency in our fee structure and how we make money.
We take unnecessary cost out of the healthcare system by directly negotiating competitive prices with health systems and independent practices that you know and trust, and provide employees with a plan option in which they coordinate their care through their selected Primary Care Team in exchange for lower out-of-pocket costs.
We have custom-built our solution based solely on the needs of self-funded employers. As a result, we are not bound by any contracting constraints and can remove low-performing physicians and/or high-cost health systems from the network, which traditional carriers typically cannot do due to impact to their fully-insured or Medicare business.
We’ve built a member experience that aligns with our high-value health plan and offers an experience that consumers have come to expect in other aspects of their lives. We offer concierge-style member support with no IVR or phone trees – at no additional cost. In addition, unlike other plans where members generally begin to engage and learn about their plan only when a health problem occurs, Centivo ensures that members truly understand their coverage and how to use their plan— before they need it.
What market does Centivo target and how big is it?
Centivo’s market is mid-sized and large employers looking for an alternative to traditional health plans. Currently, Centivo’s flagship Partnership Plan product is available to employees in New York, New Jersey, Connecticut, Florida, Southern California, and North Carolina. Centivo is expanding to new markets over time.
What’s your business model?
We sell to employers through consultants/benefits brokers, and other channel partners, charging a per member per month administrative fee and share in cost savings.
How has COVID-19 impacted the business?
As a result of the economic impact of the COVID-19 pandemic, many employers need to save money more than ever, and the serious health risks posed by the virus mean they also need to ensure their employees stay safe and healthy. Unfortunately, employers haven’t traditionally had good options to help them achieve these goals.
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What was the funding process like?
Fortunately, it was a reasonably straightforward process. Investors tend to focus on quantitative metrics and commercial traction. Based on the uptick in employer adoption for our solution, we were able to demonstrate that the original vision for the company is working.
What are the biggest challenges that you faced while raising capital?
Raising capital is incredibly time-consuming while also managing the core growth of the business and helping a team stay sane and healthy during a pandemic. Put all three of these things together and it has made for an interesting past few months.
What factors about your business led your investors to write the check?
Centivo is structurally lowering the cost of healthcare purchasing by using technology and analytics to create efficiencies and improve outcomes. Our solution yields sustainable savings and boosts quality for the long term for employers and employees alike.
What are the milestones you plan to achieve in the next six months?
Employee count is expected to double over the next year with expansion into several new geographic markets. We plan to add new providers and solutions to our offering, including virtual primary care and more.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Entrepreneurs are often told to operate as if they have $1 billion and $1 in the bank at the same time. While you need to stay true to your mission and vision, stay focused on how to get through the next 30 to 90 days.
Entrepreneurs are often told to operate as if they have $1 billion and $1 in the bank at the same time. While you need to stay true to your mission and vision, stay focused on how to get through the next 30 to 90 days.
Narrow your focus to the 1 or 2 concrete initiatives in your product and sales efforts that have the highest likelihood of success and will drive immediate value – as opposed to chasing big ideas that feel like they ‘could be’ transformative but are, in fact, low probability and could take many months to materialize.
What’s your favorite outdoor dining restaurant in NYC
Carmine’s on the Upper West Side. There’s nothing quite like dining outdoors with family-style portions.
