Ann Joo Kim spoke about the strategic focus of Flume, how healthcare coverage options for employers and their workers are changing, and what her expectations for innovation are as the pandemic subsides.
Earlier this year, Haven Healthcare, the collaborative effort between Amazon, Berkshire Hathaway, and JPMorgan Chase, disbanded.
The project was much heralded at the time of its announcement in mid-2018, led by CEO Atul Gawande, but struggled to gain traction in addressing its most ambitious goals of improving healthcare options for employees.
Recently, Ann Joo Kim, former program director at Haven, joined Flume Health, a New York-based digital third-party administrator (TPA), to serve as COO.
Joo Kim spoke with HealthLeaders about the strategic focus of Flume, how healthcare coverage options for employers and their workers are changing, and what her expectations for innovation are as the pandemic subsides.
This transcript has been edited for clarity and brevity.
HealthLeaders: What drew you to join Flume?
Joo Kim: I've always been passionate about the healthcare space; I've been there for quite some time. I came in from the clinic administration side, went through management consulting, and also had the opportunity to work on some of the early initiatives that Oxford did in terms of the bundled arrangements that we now call value-based contracting.
That led to opportunities for me to work with a much larger TPA, where I saw the movement in terms of how it's effectuating that healthcare [industry], and had the opportunity to also work for Haven, which was incubating ideas.
For me, I noticed that the delivery of care was one of the more challenging components, so I started to see how the movement from the fully insured to the self-insured market was quite appealing as I worked with a lot of plan sponsors that were large.
When I met [Flume CEO Cédric Kovacs-Johnson], we had a conversation and were aligned in terms of thinking about where there would be opportunities and how we can make an impact. I'm passionate about the fact that I want to be able to actually make a change, not just part of the process here, and move the needle in terms of how access to care is provided for the members via the employers.
We have the current ecosystem where more than 50% of the population is being serviced through an employer-sponsored entity. The taxation that these employers are paying is somewhere between 50% to 70% of the premiums, in addition to the fact that we know that the medical cost trend is increasing 6% to 7% in this year alone.
The taxation on the employer is high, and their ability to recruit talent and service their employees make it challenging. When you look at how the self-insured market has been evolving to disaggregate and make more tailored programs for that population, it has taken on a life of its own. [Additionally], there are a lot of point solutions that are moving in the marketplace as well, and that's also making it more attractive for the self-insured marketbecause then, with all this disaggregation taking place and these centers that are making significant inroads, you still need a central chassis that's going to be able to deliver on that.
That's why I joined [Flume]. I love the process of being able to be a fundamental part of that. As I come into the role as the new COO, my job is to make this chassis run smoothly and scalable. There's a big lift there, but given the fact that [my]history, having worked for organizations and run TPAs as well, makes it not as daunting.
HL: In your opinion, what differentiates innovative health plans in the marketplace?
Joo Kim: Part of it is in terms of benefit design, and the optionality that they give in terms of the benefits designs for your employers and, in essence, to the employees. The other part about it is the execution, so it's two-pronged.
The benefit designs are something that's evolving. The ability to be flexible and accommodate groups, that's one component. The other part is being able to navigate the member experience. We've seen that employees have a greater deal of influence now than they had in the past; their voice and choice are important. That didn't take place too much in the past, but now with more choices and options that are available, employees' opinions about those things become important, so making sure that the targeted population's needs are met becomes much more important.
The point of having health plans or benefit designs leveraging a chassis that's able to pull together those components specifically relevant to your employee population is key and we see the migration with that. Even about four years ago, the movement in terms of employer space and plan sponsors, would only affect the mid-sized to larger [employers]. They had that ability, but it was partly because of the risk associated with it. But now we're becoming much savvier, employers are becoming much savvier, there are better tools and platforms, and the movement to lower-sized employers is amazing.
I used to advise [employers] that it they were not at least 300 [employees] in size to go fully insured because there was too much risk. There was so much effort, there was the disaggregation, and there was the administrative component behind it. Now, we see [employers] with 100 [employees] or lower that are using the self-insured platform because [Flume] can do all of that for them. We're able to navigate the employees for them, there's less disruption than [employers] had anticipated, so we're able to centralize all of that data and also do the steerage that they could have never possibly envisioned before.
HL: What are the short-term and long-term growth strategies for Flume?
Joo Kim: My six-month plan is to make sure that the chassis is solid and bring it to scale. Flume had a big raise, which enabled me to bring on additional talent on the concierge side as well as on the claim side to beef that up and make it metric-driven so that we're solid on that part.
For the long-term vision, in terms of the overall strategic vision of the organization, over the past 18 months Flume has been working in terms of growing the size with the employers, making [the services] more accessible to smaller employers. We were working with entities that came off fully insured plans and introduced them to self-insured plans because it enabled cost savings and steerage. We also focused on member engagement and giving them transparency.
We'll continue to do that, but I think the big vision is the fact that we will be the 'main engine.' TPAs continue to do the aggregation and we will certainly provide that service—we've done it for a while now—but I think our flexibility and our technology competency enable us to be more than just a TPA and rather be a platform.
HL: How do you assess the state of healthcare innovation and the staying power of services that gained mainstream popularity during the pandemic, like telemedicine?
Joo Kim: I think there's still growth [opportunity]. However, whenever there's so much growth at a certain point, then there's consolidation. In terms of centers of excellence (COE), there are slices and dices of growth. Originally, you could only do surgery but now there are COEs for a specific line of surgery; so there can only be so much that the market can hold.
Teladoc Health used to have the dominant entity [in telehealth] but now there are a lot of entities that do telemedicine. To use a comparable, Livongo is the entity that [Teladoc] purchased, but there's another set of companies that popped up and saw the value in having disease management controlled in that way.
I do think there are still going to be different innovations that take place and are tailored for a specific population. Do I see that after a certain point there will be aggregations? I think that might be the case. I'm not sure that we're there yet, however, all of that is a wonderful growth opportunity for Flume because all of those components need to latch on to some type of chassis to serve the self-employed population.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.