Accolade CEO: Where Glen’s model is wrong; Glen Tullman: You can’t navigate a broken system

Rajeev Singh, CEO of Accolade, and Glen Tullman, CEO of Transcarent, both agree on one thing: the healthcare system is broken.

How they endeavor to fix the problem is where their visions starkly diverge. This was evident in a recent interview with Singh at the HLTH conference in Boston. He views care navigation as key to helping to bend healthcare’s cost curve for self-insured employers by leveraging data, technology and human resources. Meanwhile at the same conference, Tullman took the stage with the ever-garrulous Jonathan Bush in a discussion about the future of health and essentially described care navigation with a term that is pejorative in any industry: the middle man.

But first some context and background.

It is fair to say that in the diverse array of companies looking to sell their software solutions to mainly self-insured employers and help their employees navigate the world of healthcare, Accolade stands out.

Rajeev Singh, Chairman & CEO, Accolade

The Pennsylvania company and others targeting employers have a simple proposition: managed care firms and insurance companies have not been able to stem the ever-increasing cost burden that large self-insured employers bear to provide healthcare benefits for employees. With the consumerization and digitization of healthcare, this upstart group aims to combine tech, data and the power of human relationships to not only reduce the cost curve but provide exceptional experience and clinical outcomes for employees.

Accolade went public in the middle of the pandemic and had a successful IPO. The stock currently trades at around $40, quite a bit lower than the 52-week high of $65.25.  However, 10 out of 11 Wall Street analysts recommend buying the stock. The care navigation company has around 400 customers, Singh said in the interview with the top four customers being Comcast, State Farm, American Airlines and Lowe’s. Accolade has also made some major acquisitions this year that has allowed it to offer services like second opinion and virtual primary care and mental health consultations.

The Accolade Care product integrates virtual primary care with mental health care. Accolade One is the full suite of services that the company offers where employees have access to care providers, mental health care and care navigation services while also availing of expert second opinion services and tools to help manage chronic diseases.

Here is how Singh described his vision for improving healthcare with a slight dig at Teladoc, the telehealth company that bought Tullman’s chronic disease management startup Livongo in an eye-popping $18.5 billion deal:

You need navigation teams. They need to be powered by primary care physicians and mental health specialists who can actually deliver the care and we’ve done so in a virtual model that says, ‘You are going to see a primary care physician, they are going to stay with you through your journey.’ It’s not transactional, like a Teladoc, for example. If you need an expert consult, that is going to be human. There’s going to be a mental health professional in everyone of your care teams. So we are going to be human oriented, data-driven and measurable.

So how does Accolade get paid? Singh said the company charges employers for their entire population, irrespective of whether all employees use the care navigation benefit that Accolade provides. And here is precisely, one point of departure between the two men.

Tullman launched Transcarent earlier this year with the aim of striking risk-based agreements with large employers to steer their employees to higher quality and lower cost care settings. In an episode of MedCity’s Pivot podcast, Tullman did not call out any firm by name but was broadly critical of other companies that aren’t taking risk and simply charging a per employee per month fee regardless of employees’ usage of the benefit being provided. When asked about Tullman’s perspective at HLTH, Singh did not hold back.

I think what’s wrong with Glen’s model of only charging for the people who need the help is that people don’t know where to go when they need the help. Glen’s model is after the fact, and that after-the-fact-call-me-if you-need-me model has been proven time and time again to not improve outcomes and not control costs in healthcare. We do charge for the whole population. Models like Glen’s say – ‘I am going to give you a better outcome on that episode of care’ [but the employer is thinking] ‘I bought all these services to improve my episodic care and yet my trend line is going up’ and that’s been true for buyers for the last 25 or 30 years.

Singh went on to add that owning that relationship with employees and using data to guide them toward better, lower cost care is what sets Accolade apart. He explained that when employees receive insurance I.D. cards from their employers, the phone numbers listed at the back are all routed toward Accolade.

“When I say I am going to take every number on the back of your health insurance card, that means that if you lost your I.D. card, I will take that phone call,” he said. “And someone might say, you are wasting your time, why are you taking that phone call. The insurance company should take that call. I would say you need that ID card because you are about to go see the doctor….”

Later, Singh pointed out that that “a third of our fees are at risk around performance guarantees with our customers” and that Accolade has demonstrated that it can reduce healthcare costs for employers by 4-to-6 percent in the first year and even further reductions in the second and third year. The company-commissioned Aon study of six customers provides more details on such savings, he said.

After that in-depth interview, it was off to watch a live discussion featuring Jonathan Bush of athenahealth fame, now at Zus Health, and Tullman, moderated by journalist-turned-VC Christina Farr, with OMERS Ventures.

“I know Transcarent’s not a navigator,” Bush said turning to Tullman. “But merging navigating with delivery in a way where the doctor — wouldn’t it be nice if the doctor was your navigator? Didn’t we all sort of assume that back in the day? And now there are these navigator companies , which I have been invested in, so proud of them. What I see happening is not a navigation of the middle but an establishment around the perimeter of very interesting, tech-leveraged care alternatives that basically have figured out how to stream care in a business model that responds to the singularity that will actually get cheaper and faster and more efficient every year.”

Glen Tullman, CEO of Transcarent

Tullman, as expected, was less charitable to the idea of care navigation.

“I am not as kind to navigators because I think navigators are yet another step in this process and you can’t navigate a broken system. When we were at Livongo and [employers] would say, ‘We have a navigator’ and instead of going direct to our people, you go through the navigator. OK, when we went direct, we would get 35% 40% of the people to opt in and when we went through the navigator, it was like 12%. So it was just yet another step and people want simplicity.”

So the first thing is you can’t navigate a broken system. If you break glass in a room, if you are in healthcare you would say, ‘I want clear a little space’ and then [I] hire somebody when I want to walk through the room, they can remind me of the way. Most of us outside of healthcare would just sweep up the glass and so we have to sweep up the glass.

Relative to healthcare providers, hospitals are not the problem, providers are not the problem. They provide the care. I don’t know about you. I wouldn’t want to have heart surgery at home right now. I’d rather go to a hospital. We need two sides of the equation. We are the health consumers and we are the real payers. It’s us and the folks we work for. Then on the other side is the providers. That’s all that is necessary. 

Good software takes the middle out. That’s where the friction is. That’s where the challenges are. That’s where all the cost is. And, that’s sucking up all the profit today.

The HLTH conference was a wonderful avenue for the meeting of healthcare’s biggest thought leaders and future innovators after 18 months of isolation to celebrate healthcare’s successes and chart a path toward equity, inclusion, lower cost and better outcomes, . [Disclaimer: MedCity News is a partner of HLTH]. But probe deeper, and you will unearth that behind the self congratulatory note inevitable at such gatherings, there are substantive debates to be had about the future of health.

Photo: HAKINMHAN, Getty Images, Accolade, Transcarent 

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