New healthcare startup is the ‘Amazon of direct primary care’
After sitting in on numerous hospital board meetings where executives spent more time discussing profitability than patient care, former hospital administrator Ameeth Reddy, decided to look for a new way to provide a better patient experience.
In early 2019 he left behind an almost decade long career in hospital administration to found Equal Health, a Detroit-based startup helping self-insured groups access direct primary care services. Equal Health is working with more than a dozen brokerages in 10 states to offer their clients access to the service.
“I don’t think that today’s hospital administration [system] is going to be the future,” says Reddy, who is now CEO of Equal Health “I think a lot of things are going to change in the industry and I want to be on the right side of that.”
Direct primary care is a fee-based model that gives individuals unlimited access to a primary care doctor for anywhere between $60 to $150 a month — without insurance being billed. There are roughly 1,000 direct primary care practices in the U.S.
The modern healthcare system provides employees with poor preventative care which could result in workers ending up in the hospital and emergency room more frequently, he says. This is what is driving up costs for employers and ultimately making their employee outcomes a lot worse.
“Over all this is a much more high quality, affordable way to get primary care. It covers 80% of your [employees’] healthcare,” he says.
Direct primary care has been available for a while but it has historically been viewed as concierge medicine that is cost prohibitive for the average consumer, says Jonathon Trionfi, principal in the group benefits practice at Plante Moran who works with Equal Health.
Some employers have been offering these benefits for several years, via onsite or near-site clinics, Trionfi says. But this is only effective for employers that have employees in a specific geographic area.
“The more common direct primary care offices we see now are more price-accessible to the consumer, but many still are not properly equipped to integrate with an employer’s benefit plan,” he adds.
Equal Health, however, does integrate into employer’s benefit plans. The company works with benefits advisers who are either well versed in primary care or who are looking to help their clients change up their health benefits. Equal Health manages all of the logistics for advisers including patient eligibility, doctor matching, enrollment and payments.
“The simplest reason we are working with Equal Health is that we are unaware of anybody else providing the exact same service in the direct primary care industry,” Trionfi says. “Equal Health is effectively acting as the Amazon of direct primary care by bringing employers and DPC providers together in a way that simplifies the transactional costs of doing so.”
Employers are going to be the ones who end up driving change in the healthcare and insurance industries, Trionfi says. He believes employers will demand more transparency in both industries. Once that happens there will be more innovation, which will lead to employers sourcing healthcare more directly.
“This will eliminate some of the misaligned incentives that work against employers,” he says. “I do believe that the employer-centric model of delivering healthcare and health insurance to employees will remain, albeit significantly changed.”