On-Demand Health Insurance Shows Promise, But Can It Deliver?

Bind, a health plan startup based in Minneapolis, offers a 'promising concept' aiming to revolutionize health insurance with financial backing from UnitedHealthcare.

As insurers introduce their plans for the 2019 enrollment period, one health technology company is entering the space with a disruptive strategy in mind.

Bind is a healthcare startup aimed at providing "on-demand health insurance" for consumers to pay for the coverage plan they want. Bind has been utilized by several business organizations primarily in the Minneapolis-St. Paul market, but they have plans to expand operations.

Currently, Bind has around 2,000 enrolled members across 14 states but company leadership is expecting to see its coverage grow to 100,000 people by January 1, 2019.

The on-demand insurer also boasts major financial backers. In June, Bind announced that it raised $70 million in seed funding from UnitedHealthcare, Ascension Ventures, and Lemhi Ventures.

Tony Miller, CEO of Bind, spoke to HealthLeaders about how the startup is positioned to compete in a busy health insurance market, what hurdles the insurer must address to achieve mainstream success, and why hospital executives should pay attention to on-demand health plans.

"We think this is going to give those people who have invested in care coordination, clinically integrated networks, and measuring their quality, a chance to display all of that investment to the market and differentiate what they're doing as a care delivery organization relative to other players that aren't investing in those things," Miller said. 

Explaining the on-demand concept

The inspiration behind Bind's business model came from the overall shift among corporations to provide consumer-centric services, according to Miller, who said that healthcare is on-demand by its very nature. 

"We wanted to make Bind like a core plan that meets your needs for primary care and preventive care," Miller said. "When there are things that [consumers] have time to plan for, and there are different treatment options to address their underlying treatment, we wanted to give [consumers] a chance to buy additional insurance. What [Bind] is doing for the first time in health insurance is pairing a coverage decision with a clinical choice at the point of need, instead of at the point of enrollment."

Under the plan, consumers can essentially 'shop-as-they-go,' paying a premium and an additional copay to receive flexible coverage options. And in keeping with the focus on a consumer-friendly plan, Bind features no deductibles or coinsurance.

Industry challenges lay ahead  

Despite the promise of an on-demand insurer, healthcare has a reputation for being an industry averse to change. Miller said the "inertia of the entire system" is the biggest impediment to the future growth of Bind, adding that healthcare does not adapt at the same speed as other parts of the economy.

However, healthcare has exhibited a financial embrace of on-demand services, according to a 2016 Accenture Consulting report that found the projected investment in on-demand healthcare would quadruple to $1 billion in 2017. The study accounts for various types of on-demand healthcare, including primary care, specialty care, and consumable products, among others.

In this rapidly growing on-demand healthcare space, Bind is not the only disruptor around. One such competitor, Oscar Health, has made its claim in the insurtech field, announcing this summer that it would expand its services and offer plans in nine states for the 2019 Affordable Care Act enrollment period. This is an area where Bind expects to compete as well, with a company spokesperson confirming that Bind plans are ACA-compliant.  

Brian Kalis, an Accenture analyst, told HealthLeaders that on-demand healthcare is altering the relationship between doctors and patients by making care more accessible and convenient for consumers in the market.

"What Bind ultimately has done is taken the concept of on-demand services, which have been growing in awareness and popularity among consumers across all sectors, and applied that to health insurance," Kalis said. "It's taken something that is overly complex and hard for people to understand and made it easy."

Kalis described Bind's business model as growing from the "consumer backward," allowing the company to offer and update its services to suit the needs of its customers. He added that Bind's introduction of on-demand health insurance to the marketplace is a "promising concept," that will likely go through various iterations as competition increases and the lines between traditional insurers and newcomers continue to blur.

Kalis said he expects a variety of responses from traditional insurers, some of whom will choose to collaborate with similar on-demand servicers while others will wait to see how the product is received by the public.

First year test

As Bind enters its first enrollment period, it remains to be seen how the advent of on-demand health insurance will impact insurers, providers, and consumers alike.

Miller said that in order to succeed within a crowded healthcare market, Bind required the backing of a national network and an underlying managed care partner to help attract large, self-funded employers. As of publication, Bind has contracts in place with two Fortune 500 companies but does not have an established relationship with a provider organization yet. Miller said that Bind is relying on Ascension Ventures to enlist local care delivery partners that prioritize innovation and care model redesign.

Meanwhile, UnitedHealthcare stepped up to back Bind after previously acquiring Definity Health Corporation, a health benefits provider Miller founded in 2004. UnitedHealthcare has affirmed their support in the potential of on-demand health plans, telling HealthLeaders in a statement that they "look forward to working with Bind to create greater transparency into health care costs and help people choose the services they need."

Currently, Bind utilizes UnitedHealthcare’s network operations and data analytics to administer employer benefits, according to CNBC.

Price transparency and affordability are top of mind for healthcare consumers, according to Miller, which is where he says he believes Bind can make inroads with savvy hospital executives who are looking at the financial impact of healthcare consumerism on their bottom line.

By applying a price tag to each of its offered services, Miller says Bind has removed an additional layer of financial confusion for consumers. Through direct communication on the cost side of healthcare, Miller says he believes that insurers and providers will build efficient care models to make sure consumers are utilizing the most clinically effective treatments.

Many health systems are already entering into different risk-based products and services to improve access for people, Kalis added, so providers have proven they could be open to the on-demand model as a way to advance the process. Kalis says he thinks that Bind's efforts could change the industry's thinking and move providers toward offering bundles for care to compete in the marketplace.

Correction: An earlier version of this story stated that Oscar Health offers plans in 11 states. Oscar only offers plans in nine states. This article has been updated to reflect this.