Meet Sidecar Health, the newest member of the tech industry’s billion dollar healthcare startup club.
The valuation comes thanks to $125 million in new funding that the company will use to expand its new model for health insurance. Sidecar Health’s insurance plans give consumers the ability to pay directly for care — often at steep discounts to the prices that patients would be charged through traditional insurance plans.
A typical Sidecar Health plan costs $240 per-member, per-month and its flexibility has made it a popular choice for the nation’s 20 million to 30 million uninsured individuals, according to chief executive officer Patrick Quigley.
The core of Sidecar’s plan is an ability to offer its policy holders the ability to pay directly for their medical care — and shop around to find the best provider using pricing information that the company provides through its mobile app.
Sidecar’s app provides real-time, geo-located information on the costs of any number of medical procedures, consultations, or drugs — and allows its users to shop at the places that offer them the best deal — in some cases the company will even pay money back if a price-savvy healthcare shopper finds a better deal.
If this all sounds kind of dystopian and nightmarish — well, welcome to the world of American healthcare!
In an ideal world, low-cost medical care would be a right, not a privilege and a baseline level of healthcare access would be available to everyone — including an ability to pay a set price for drugs, consultations and treatment. But if you live in America, bargain hunting for care may be the best bet to curb skyrocketing healthcare costs — at least for now.
While Sidecar pitches its service for everyone, the average age of the company’s current patient population is 33 years-old, Quigley said. “It’s typically people that earn more than $45,000 a year and less than $75,000,” said Quigley of the company’s demographics.
The way it works is that Sidecar issues its insured members what’s basically a debit card that they use to pay for care, prescriptions, and consultations directly. The money comes from Sidecar’s claims accounts and is paid directly to doctors. By avoiding the middleman (traditional insurance companies), Sidecar can reduce overhead for care providers who like to get paid directly and will offer discounts in exchange for receiving cash in hand.
“It is 40% cheaper than the traditional commercial insurance companies would pay,” said Quigley.
Sidecar covers around 170,000 medical conditions and procedures, according to Quigley — including things from horse therapy (it’s a thing) for anxiety relief to heart transplants and chemotherapy, Quigley said.
Sidecar is currently available in 16 states and hopes to expand to most of the country on the back of its latest round of funding.
And while the company is working with uninsured patient populations now, it’s hoping to also expand its footprint with government-backed healthcare plans and into employer-sponsored health insurance as well.
It’s still early days for the service, which has only been around through two open enrollment periods for would-be plan members to sign up. And while the company doesn’t disclose its membership figures, Quigley said it would end the year above 30,000 members.
“It’s still super early,” Quigley said.
Despite the stage of the business, investors are convinced that the business model has an opportunity to transform health insurance in the US.
“The extraordinary level of transparency Sidecar Health brings to the marketplace has the potential to fundamentally change how millions of Americans shop for healthcare,” said Molly Bonakdarpour, a partner at the Drive Capital, which provided early backing for the company. “We think Sidecar Health’s team of consumer, technology and healthcare veterans is well positioned to capitalize on the large healthcare insurtech opportunity.”
For the latest round, Drive Capital was joined by new investors including BOND, Tiger Global and Menlo Ventures, according to a statement.
Sidecar Health will use the investment to expand its geographic footprint, grow its team and invest in new insurance products that build on its success in the uninsured market. The first of these will be an ACA or “Obamacare” offering for 2022, followed by a product for the self funded employer market.
“We believe we can take $1 trillion in waste out of the U.S. healthcare system,” Quigley said.
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