“In our country, the employer is actually the biggest health insurer,” says Ali Diab, co-founder and CEO at Collective health. “The big health insurance companies actually don’t underwrite most of the risk in this country, and self-insurance just means the employer pays for their employees’ costs out of pocket.”
That is why Diab created Collective Health, a benefits management platform for employers who self-fund their employees’ healthcare insurance. Branded as the Workforce Health Management System (WHMS), their flagship product allows businesses to administer medical, dental, pharmacy and vision plans and coordinate benefits provided by multiple vendors. It also provides navigation and patient advocacy functionality, engagement capabilities and data analytics that provide actionable insights for best service and value.
The idea for Collective Health came about after Diab was diagnosed with small intestinal volvulus six years ago that resulted in a $500,000 medical bill. Armed with a platinum PPO (preferred provider organization) technology employer plan, he was confident that he’d be covered for the surgery to remove his small intestine and subsequent month-long stay at the hospital.
“I got into this literally getting hit in the stomach,” Diab said. “I came home thinking everything would be covered and then was very, very surprised to discover that more than half of my billed charges were denied, and that’s what spurred my interest in this industry.”
“And I thought there had to be a better way to get people to understand and navigate and access health in this country, and that’s why Collective Health got started.”
Since its start in 2013, Collective Health has enjoyed successes with both substantial customer growth various industries and active investor commitments that are keeping their coffers full. They experienced their largest ever jump in member numbers in 2018 and can now claim over 140 health partnerships and more than 600 integrations completed in collaboration with customers. In addition to their San Francisco HQ and Chicago office, the company opened third operations office in Salt Lake City.
“When we set out five years ago, we had a hypothesis that by applying the latest enterprise software technology and user experience design, we could empower American employers to take the reins of their $1.2 trillion in annual healthcare spend,” Diab said in a statement. “Five years on, self-insured employers are using Collective Health at an accelerating and national scale to take control of their healthcare investments. Employers recognize the power and value that our modern technology platform and large-scale data science capabilities provide, including the flexibility and transparency they need to deliver an unmatched health benefits experience to their people, while making their employee healthcare budgets go as far as they possibly can.”
At a time when national healthcare costs are expected to soar another 5 percent for the sixth straight year, Collective Health shared their customers experienced a 0.3 percent drop in expenses. In a cost report the company published last year, they estimated this averaged out to a savings of $500 a year per family.
They are financially backed by NEA, Founders Fund, Sun Life, GV (Google Ventures), Mubadala, and Redpoint. The infotech company is now generating revenue and plans to build on their early successes with improvements to their benefits platform, expansion of their partnership network and customer recruitment in new markets.