Health benefits startup Collective Health, a third-party administrator (TPA), in October 2015 raised USD 81 million in additional private investments for a total of 119 million since 2013 to support its plans to begin offering group health care products to self-insured employers in the U.S.A.. Principal investors in Collective Health include Google Ventures, Maverick Capital, Redpoint Ventures, RPE Ventures, New Enterprise Associates and Founders Fund.
Based in California, Collective Health also announced a partnership with Anthem, Blue Shield of California and others for access to their health care provider networks; it intends to deploy medical, pharmacy, dental and vision benefits administration across the U.S. in 2016, servicing approximately 30,000 employees and dependents, and processing over USD 200 million in claims in 2016.
Assuming Collective Health’s fees amount to 8% of claims, its 2016 turnover might be in the USD 15 to 20m bracket, still a tiny fraction of the TPA market. However, Collective Health’s pricing structure is on a Per Employee Per Month (PEPM) basis, not a percentage of claims paid; the 8% of claims computation is our attempt at an estimate of the company’s turnover. How disruptive in the U.S. and how exportable to other countries Collective’s Health offerings and business model will be, shall be interesting to follow in the coming years. Sorry,
months weeks: this is Silicon Valley, folks! Collective Health’s CEO is Ali Diab and its Chief Health Officer is Rajaie Batniji; neither have a background in the insurance industry (Silicon Valley again!) but some team members actually come from major employee benefits firms such as Mercer or Aon Hewitt.