What are the points of failure do you think can happen specifically when you mentioned about partnering with payors for large populations as one option to reduce patient acquisition costs? Also what sort of revenue models are likely here? PMPM, revenue share, VBC/capitation?
- Payors are often quite bad at routing patient traffic to a particular provider. in a narrow network scenario where the entire plan is designed around a provider, I can see them being quite good. If you're a particular specialty provider, its more challenging
- getting the right context to the right person at the payor organization (These folks are massive) is really difficult.
There's probably others but those come to mind.
Revenue models I'm familiar with have only been PMPM or VBC/Capitation. There might be others that I'm not familiar with yet . . .
Being nit-picky here, but would tweak this: "you need to have payor contracts basically negotiated and ready to go prior to even starting the company." Realistically, payor contracts take a very long time to negotiate even when the parties are already working together, and they will not waste their legal team's time negotiating with a non-entity. Founders need to understand the difference between agreeing in principle with payor business leaders vs. getting the contract done with legal. Legal can sometimes take many many more months than expected. I don't think you need to have it negotiated... you just need to understand HOW to negotiate the contract and already have an internal executive champion within the payor who will advocate for you.
Fair nit. I'm using "negotiated" colloquially; I've just seen enough digital health startups raise a seed with some payor contracts already in place, which makes me realize that if you're not thinking about it from day 0, you're already behind.
Wrote on frameworks for thinking through differentiated patient acquisition / retention at below links but patient acquisition will increasingly become the focal point where "good" care delivery startups differentiate & win and "bad" ones die, especially as common channels (ex. paid ads) are causing CAC to skyrocket.
I think patient-facing orgs that can tap into organically formed communities/relationships IRL or online (ex. Spark Advisors, WellTheory) or have built-in paths towards patient-to-patient referrals (ex. Charlie Health) have a leg up; I wonder what might be other wedges toward differentiation in patient acquisition.
Great read here, thanks Kunle.
What are the points of failure do you think can happen specifically when you mentioned about partnering with payors for large populations as one option to reduce patient acquisition costs? Also what sort of revenue models are likely here? PMPM, revenue share, VBC/capitation?
Points of failure
- Payors are often quite bad at routing patient traffic to a particular provider. in a narrow network scenario where the entire plan is designed around a provider, I can see them being quite good. If you're a particular specialty provider, its more challenging
- getting the right context to the right person at the payor organization (These folks are massive) is really difficult.
There's probably others but those come to mind.
Revenue models I'm familiar with have only been PMPM or VBC/Capitation. There might be others that I'm not familiar with yet . . .
Being nit-picky here, but would tweak this: "you need to have payor contracts basically negotiated and ready to go prior to even starting the company." Realistically, payor contracts take a very long time to negotiate even when the parties are already working together, and they will not waste their legal team's time negotiating with a non-entity. Founders need to understand the difference between agreeing in principle with payor business leaders vs. getting the contract done with legal. Legal can sometimes take many many more months than expected. I don't think you need to have it negotiated... you just need to understand HOW to negotiate the contract and already have an internal executive champion within the payor who will advocate for you.
Fair nit. I'm using "negotiated" colloquially; I've just seen enough digital health startups raise a seed with some payor contracts already in place, which makes me realize that if you're not thinking about it from day 0, you're already behind.
Wrote on frameworks for thinking through differentiated patient acquisition / retention at below links but patient acquisition will increasingly become the focal point where "good" care delivery startups differentiate & win and "bad" ones die, especially as common channels (ex. paid ads) are causing CAC to skyrocket.
I think patient-facing orgs that can tap into organically formed communities/relationships IRL or online (ex. Spark Advisors, WellTheory) or have built-in paths towards patient-to-patient referrals (ex. Charlie Health) have a leg up; I wonder what might be other wedges toward differentiation in patient acquisition.
https://quiteafewclaims.substack.com/p/evaluating-patient-aggregation-opportunities
https://quiteafewclaims.substack.com/p/evaluating-patient-aggregation-opportunities-6c1
This is a fantastic write up, very thoughtful