December 26, 2019

A new approach to affordable health coverage

Cedric Kovacs-Johnson

Status quo health insurance is failing both employers and employees, and most TPAs aren't equipped to provide the change employers need. At Flume Health, we're doing things differently.

We started Flume Health because traditional carrier-run insurance plans aren’t good stewards of people’s health or employer’s budgets. Instead of helping people make smart decisions, their poor design results in pain for every member of the healthcare ecosystem:


  • Providers face an unreasonably high cost of doing business with incredible billing complexity — often suing their own patients to collect deductibles
  • Without transparency or data, employers aren’t able to take action against rising healthcare costs — they’re forced to decrease benefits instead
  • As benefits fall members have more financial responsibility, with no way to estimate the costs — most will avoid or delay care out of fear


Employers have tried to break out of this cycle through self-funding, but they’ve found themselves in what amounts to the “Wild West” of healthcare, forced to manage all the moving parts in a health plan with outdated tools and little to no expertise. Their benefits advisors, therefore, are expected to be the experts and bring more sustainable solutions to the table. Typically, they turn to TPAs.


We found over and over that these TPA often fail at the basics of administering a plan: paying claims on time, answering the phones reliably, integrating with partners. So we started Flume Health thinking we’d create a better TPA.


But over the past year, we’ve realized that what advisors and employers need isn’t just a better TPA. It’s a different approach to health coverage altogether.


So we created a new category of employer-sponsored health coverage that bypasses the traditional insurance model to provide employers with fair pricing, simplicity, and transparency. Our tech enabled platform allows this new model to run as smoothly as any carrier plan. 


We use a suite of tools, including medical management and algorithmic fraud, waste, and abuse detection to systematically remove the waste in the healthcare system, which often ends up being over $5,000 per employee per year. 


We remove barriers to finding affordable, quality care through Flume Community™. For every plan, we identify high-quality providers and invite them to agree to fixed, fair prices for any Flume Health members. In return we pay them within 72 hours and waive any patient collections outside of a copay. Providers see their billing cycle reduced from weeks or months to a few days, and members are rewarded for making decisions that save the plan money.


After all, the best member experience is simply health coverage that members can actually afford to use. In addition to automatically reducing members’ costs through Flume Community™, we encourage each of our clients to pass along savings in the form of lower premiums and deductibles. When members can afford to use their coverage, they’re often able to deal with health issues before they become expensive to treat.


Tying all of this together is our absolute commitment to transparency. We give benefits advisors and their clients an unprecedented amount of data about their health coverage. We also charge a single flat price for our services, swearing off the hidden fees and kickbacks that have become commonplace in our industry.


I’m absolutely thrilled with the results we’ve brought our clients so far. In 2019 they saw, on average, a 40% reduction in healthcare spend, to the tune of $5,646 per employee. And 70% of them chose to make coverage richer for their employees in the new year. 


One thing is clear: Flume Health works. As we continue to push forward and deliver health coverage employees can actually afford to use, I hope you’ll join us.

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