Threading the Needle of Employer Benefits with Digital Health

Welcome to Architect Health’s The Front Door Newsletter! In this newsletter, Architect Health’s Co-founder & CEO, Sohum Shah, interviews healthcare executives, founders, and experts on healthcare innovation, digital health, and preventative care. The goal is to identify pain points in these spaces and paint visions on how to address them, inspiring decision makers at traditional healthcare organizations.

Today’s interview features health tech entrepreneur and health plan executive, Rick Abbott. Abbott is the Senior Vice President of Employer Solutions at Priority Health. Before joining Priority Health in July 2023, he served as Co-founder and Chief Executive Officer of Lyn Health. In this episode he discusses his innovations in the chronic care space, the importance of digital health for employer benefits, and Priority’s alliance with Cigna.

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As Senior Vice President of Employer Solutions at Priority Health, Rick Abbott leads benefit options that serve small and large companies across Michigan. He oversees product innovation, wellness, underwriting, sales and client services, sales, operations and marketing, and the organization's alliance with Cigna. Abbott has more than 15 years of experience in the healthcare industry with a focus on strategic development and business intelligence. Before joining Priority Health in July 2023, he served as cofounder and Chief Executive Officer of Lyn Health, which provides clinical advocacy and care coordination services for people with multiple chronic conditions.

Abbott earned his bachelor’s degree at Iowa State University and his master’s degree in business administration from DePaul University. In 2020, Modern Healthcare named Abbott one of their “Top 25 Emerging Leaders.”

Origins of Lyn Health

Sohum: Rick, you have a unique background at the intersection of digital health innovation and large payers. Tell us about your venture backed digital health chronic care management startup, Lyn Health. What drove you to start, Lyn? What did you learn about bridging the payer digital health gap?

Rick: I started Lyn Health while working at a health plan in the Pacific Northwest. We were already exploring virtual-first health plans and behavioral health access to rural areas when COVID hit, making our work immediately relevant. Our team quickly launched products initially scheduled for much later, attracting venture capital interest.

I envisioned a collaborative clinic with a multidisciplinary model, inspired by my 2020 experiences and a loved one with multiple chronic conditions. Instead of a health program that addressed a very specific need, this clinic would address all needs of patients with multiple chronic conditions, who account for 80% of health care spending. Lyn Health stayed in stealth for a year and raised funding.

Today, the company serves patients in commercial and government sectors and collaborates with other digital health clinics. It's a lot of work to bring a company from the ground up, but it was an experience I’ll never forget, and I just loved the patients we were able to serve while I was there.

Digital Health: Pre vs. Post Pandemic

Sohum: How has your view of digital health changed pre pandemic versus post pandemic? And looking at your crystal ball, what does the future hold in store?

Rick: I've undergone a full evolution in my views on digital health over the past five years. Pre-pandemic, I was very optimistic about its potential but saw limited market penetration, with only 2-4% utilization, even for popular apps. COVID changed everything, making digital health the primary solution for care during lockdowns, especially in Washington, where I lived. It was a critical time, particularly for elders with chronic conditions who couldn't access traditional care.

Post-pandemic, there is always going to be a place for brick-and-mortar care. Now we have to figure out how the two can coexist while not always having the same hopes for what the future of health care might look like. Moving to a largely virtual environment does have a revenue impact on large health systems. And some services, like surgeries, require in-person visits. The challenge now is balancing digital and in-person care to drive better outcomes and sustain health care businesses.

Digital Health Strategy Challenges

Sohum: Were there any challenges you faced when determining your digital health strategy? And what might you say to other decision makers and leaders at health plans on the importance of digital health?

Rick: As an integrated delivery system, we have many traditional access points through our parent company, Corewell Health. While they provide high-quality, cost-effective care, digital health sometimes offers a better value proposition. We’re trying to sort through all of the people – and I used to be one of them – making big promises early in the growth trajectory of their company, without having the data to prove that they can drive outcomes and cost efficiency further.

Employers are tired of managing multiple point solutions and expect their carriers to identify and integrate effective digital health solutions within the existing ecosystem. We focus on the mission and problem each digital health company aims to solve. No matter how much a health plan does, it's very difficult to compete with a group of like-minded individuals relentlessly focused on solving one specific problem, like behavioral health or MSK or something like that.

We need to understand if these companies can collaborate with providers, bill through claims and fit within our integrated delivery system, while maintaining affordability and quality. Our goal is to identify solutions that address key problems and set us apart from competitors.

Sourcing and Vetting Vendors

Sohum: As lessons for the broader health tech ecosystem, what does the process of sourcing, vetting and onboarding external or third party platforms and vendors look like? How should innovative companies approach plans today? And speaking from your perspective, as both from a digital health founder to a payer, how does that kind of align? Where does that fit in?

Rick: For digital health providers, it's crucial to understand that while we value your solutions, we also have to manage a network of providers offering similar services at fair rates. You might have an amazing AI stack improving member experience and providing prompt, cost-efficient care, but traditional providers are doing something very similar and may not be tech enabled, but are being paid the fair market price.

When vendors come in and say, “You have to give us admin fees, pay for the whole population, not just utilization, and trust us, we're better because we have a better tech stack” – that's not palatable. Employers might be willing to pay for innovative tech, but we also manage total care costs and support our provider network. I advise founders to align with our problem-solving needs rather than just focusing on their technology.

Health plans differ greatly and approaching us with a perspective that matches our goals can expedite contracts. Companies trying to disrupt the health plan business without adapting often struggle. Currently, we are implementing several digital health companies that understand how to operate within a health plan network, which means we can bring their solutions to our members and employers more quickly.

Role of Cost, Quality, Engagement

Sohum: What roles do cost savings, quality of care and member engagement play in a plan's motivation to onboard these health tech solutions?

Rick: We’re dedicated to making health care more affordable for everyone, whether they have private insurance, Medicare, Medicaid, or no insurance at all. Health care is costly, and few can handle a major medical event without financial strain. Our focus is on reducing costs for both individuals and employers by addressing the whole person, including behavioral health, to manage total care costs effectively.

Quality is essential, not just as a concept but in practice. We steer our business toward high-value providers, ensuring superior outcomes at fair prices. We direct members to quality providers for, say, surgeries, because if you demonstrate superior outcomes on a joint replacement or a spine surgery, and you do it at market price, you’re increasing the likelihood that members end up at your facility. Our competitors often prioritize broad access, but we focus on steering members to the best quality care.

But if we're going to tailor an experience to get you to the right place, the experience itself needs to be easy. So, we have mechanisms to make sure we get people to the right place without burdening them. Again, we are focused on affordability, but through three pillars: whole person care, quality and experience.

Digital Health & Value-Based Care

Sohum: Digital health and value-based care are the two of the most talked about advancements in modern health care. How do you see the two working together?

Rick: I'll give two examples we're currently working on. First, Musculoskeletal Care (MSK). Traditional physical therapy often requires in-office visits, driving up costs to about $750 for a four-month regimen. Instead, we partner with a virtual PT company using AI to monitor patients and offer care at $500. Payments are released incrementally upon achieving milestones, saving costs and improving convenience for patients.

Second, Substance Use Disorder treatment. Many avoid residential facilities due to stigma, cost, and separation from loved ones. We've digitized the treatment process for Opiate Use Disorder, allowing patients to receive clinically managed care at home. This approach is rewarded with a case rate, ensuring long-term support and sobriety maintenance.

These digital, value-based models reduce costs significantly and meet patients where they are.

Combating Point Solution Fatigue

Sohum: The concept of point solution fatigue has been voiced consistently by payers, providers, and even patients themselves. What approaches might you recommend to plans combating this problem today?

Rick: Point solution fatigue is real. Employers are overwhelmed by the sheer number of digital health solutions, making it difficult for them to evaluate and integrate each one into their benefits plans. As a health plan, we have the resources to vet these solutions, ensuring clinical rigor and seamless integration with the existing ecosystem.

Employers now expect more from their health plans, wanting us to vet and integrate solutions on their behalf. We need to anticipate market trends and prioritize topics likely to be crucial in the next three-to-five years. For instance, during COVID, behavioral health was a priority, but now our focus is shifting towards evaluating genuine AI capabilities in digital health.

Employer Benefit Expectations

Sohum: What types of benefits are small and large group employers asking for and expecting from their carrier? How do you manage the unique needs of each commercial customer?

Rick: Standard digital health access, like urgent care, is now basic. Behavioral health access is also expected, and MSK support is becoming standard. Employers want seamless benefits where members don't have to understand complex details like coinsurance. We simplify this by creating easy-to-understand benefits. For example, we have a center of excellence for spinal surgery with a tiered benefit. If members choose one of our curated, high-quality facilities, we'll cover the entire procedure cost, subject to the IRS deductible. They have the option to go elsewhere but will pay 20% coinsurance.

We also have a concierge experience with a single contact point for any questions about deductibles, prescriptions, or behavioral health. This approach helps employers offer sophisticated benefits without complicating things for employees and their families.

Priority Health-Cigna Alliance

Sohum: In 2020, Priority Health announced a strategic alliance with Cigna to make comprehensive health care coverage more affordable and accessible to Michigan employers and their employees. How has this alliance improved and expanded each plan's provider's networks? Are there any other innovative programs or upcoming collaborative initiatives between the two plans?

Rick: Yes. One of the great things about our growth at Priority Health is that we are expanding outside of Michigan. In June, we announced plans to expand into Northern Indiana and Ohio through the acquisition of Physicians Health Plan of Northern Indiana. We started as a local HMO through one hospital and now serve more than 1.3 million members, including employers with out-of-state employees. To ensure these employees have a great experience, we partnered with Cigna. Cigna's national network allowed us to offer an out-of-state experience on par with one of the four largest health plans in the country.

This collaboration expedited our growth with larger accounts, particularly in markets like Detroit. It also allowed us to offer Priority Health products and services nationally. This partnership has enabled us to influence health care delivery not just in Michigan but across the country by working with providers outside our state.

What’s Next in 2024?

Sohum: What are you most looking forward to for the rest of 2024? What are some changes or trends in health care you are most excited to witness?

Rick: I’m excited to see health systems becoming more aligned with digital health companies. In the past, there was resistance driven by patient experience concerns and revenue worries about how digital solutions might impact traditional revenue streams. However, many digital health solutions now enhance and augment the existing health care ecosystem rather than disrupt it entirely.

I’m encouraged by the progress of digital health companies finding ways to coexist with traditional systems. For instance, we have several digital health companies going through the process of becoming network providers with us because they recognize the value in working with a health plan like Priority Health rather than just targeting individual employers.

While there can be friction, it’s actually quite beneficial. Disruptors and entrepreneurs challenge us to see our blind spots and drive improvements. 2024 is shaping up to be a promising year for this collaboration.

On a personal note, I also want to acknowledge the hard work of founders. Having been in their shoes, I have immense empathy for the challenges they face. Balancing vision, implementation, and working with investors is incredibly tough. Kudos to all the founders who are dedicated to making a difference in health care; your efforts are truly special.

Architect Health is a digital health aggregator, navigator, and vendor manager that makes it easy for health plans and their members to access virtual-first care solutions. Architect optimizes health plan RFP processes in a consolidated and comprehensive platform, reducing admin burden and costs. This helps health plans realize digital health cost savings opportunities - up to a 7x ROI. Architect's Digital Health Quality Index has vetted and scored thousands of telehealth solutions on efficacy, company reliability, and health equity. Co-founders Sohum Shah and Sidd Hariharan have deep expertise working with health plans and have built care management programs and aligned technology for Humana and BlueCross BlueShield. Architect Health is backed by Drive Capital, Entrepreneurs Roundtable Accelerator (ERA), Cherrystone Angel Group, Plug and Play Ventures, Service Provider Capital, and strategic advisors.

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