[Changemakers] What it Takes to Launch a Small-Business Health Plan
This blog post was written in partnership with Poppins Health.
Health insurance is notoriously difficult to navigate, particularly for small to mid-sized who may not have the bandwidth to manage benefits. Poppins Health has set out to build a new health plan from the ground up, specifically designed for this underserved market.
Read an interview below between Flume Health and Ross Klosterman, MPH, Co-Founder and CEO of of Poppins Health.
What is Poppins Health? Where did it start?
I set out to make a health plan my mom could use—simple and affordable. She lives in Indiana, and I guess the day she signs up is the day I can retire.
Today Poppins Health is a health plan designed for small businesses- under 250 lives. Our long-term vision, though, is to be the “last health plan you’ll ever need.” We hope that Poppins will be able to follow you from employer to employer, providing value to you and your family long-term.
Why focus on small businesses (less than 250 employees)? Aren’t there already health plans out there to serve them?
Looking back when we first started Poppins Health, I had a conversation with an employer and their broker and I asked if they had options when it came to health plans. Though the broker proudly pointed out there were 10 or 11 products on the table, they were, in fact, all different flavors of a fully insured plan.
Organizations of this size probably don’t employ a full-time benefits analyst, and tend to make these huge financial decisions very quickly, just once a year. I realized that we could make a change in how these companies make their decisions.
Employers are the testing ground for health plan innovation. Livongo, Omada—without employer-based health plans, they wouldn’t be here today. They’re the front lines, and truly do test the waters for what’s possible in a health plan. The best ideas eventually make their way up to the large payers, but it starts with individual employers.
What’s lacking in health plan design today for them?
HDHPs at one time were very popular. I think they’ve probably done more harm than good. Consumerism is not bad in theory, but the tools available to help people shop for care are not user friendly at all.
Rising deductibles mixed with not being able to easily shop for care means that most people in this sector avoid care—making them functionally uninsured. At a certain point, the member and the employer begin asking, “what are we paying for?”
What goes into building and launching a health plan?
It was important to us to build the back-end in-house, from the ground up. We looked at Trizetto Facets™, Cognizant QicLink™, +Oscar, etc., but they all were built for traditional plans [batch processing claims, gold/silver/bronze cost structures].
Our plan is built first to incorporate acute primary care as a deep integration, rather than a bolt on. This is proven to give members much better health outcomes right from the start. This lets the plan lower its costs year over year.
We also built our product to dynamically adjust member costs based on where they go for care. If a member uses their primary care option, for example, they can have a $0 copay. If they use the shopping tools provided and follow plan steerage, they’ll pay less out of pocket. This, again, lowers the plan cost for them and the employer.
As a VC-funded start-up health plan, hiring must be top of mind. Who were your first hires?
Since we wanted to build everything in-house, we hired early for every piece a health plan might have. We hired someone to focus on network building because we do not want to rely on traditional networks for our plan. We hired software engineers and developers to build our adjudication logic. We have our own app and member experience, so we also hired front end developers to build that.
What about sales and business development?
Our business development lead has a background working with brokers & employers. If you’re bringing a new health plan product to market, you really need to be able to explain the details of it to brokers, who will ask you very specific questions about how it works.
Any advice to the founders out there?
If you see a way to make a change, even a small one—take it!