Many think shopping online for insurance in the era of healthcare reform should be simple: Plug in your age, household income, dependents, ZIP code, preferred doctor, whether you suffer from any chronic conditions or routinely take medications, then let an online marketplace spit out a stable of health plans sorted by cost. If you already had a plan, maybe it would compare the pricing between the two?
But it doesn’t. As it stands, the most sure-fire way to find that type of service is through a broker, which can sometimes take weeks for them to personally sort out. But what if there was a database of past claims that shoved those details into an algorithm that then compares health plans that other Americans with similar health conditions use for their care?
Dallas-native Jack Hooper, 31, wasn’t thinking about any of this when he formed the idea for his startup, Take Command Health.
No, he traces his deep-dive into health insurance to 2012, when he and his wife learned newborn twins were on the way. The two were insured through student health insurance provided through The University of Pennsylvania, where he was getting his MBA at the Wharton School. How much would the newcomers cost?
“I realized there was no one who could answer my questions or figure out what was going on,” the Highland Park High School graduate says. “I had done a bunch of research to try and figure it out in terms of how costs are processed through insurance companies, how billing records work. I’d gone and spoken to a bunch of those people and it seemed like no one really knew.”
So, he said he set about learning on his own. And in his research he found the confusion extended far beyond his two babies: “You’d think the doctors would know, but they didn’t really know. The more people I talked to, I realized, hey, there’s more issues outside of just having twins. People are confused by their insurance and don’t understand what’s going on under the hood.”
Take Command Health is a website that attempts to help the consumer find the best plan for his or her needs and better understand the insurance they’re purchasing.
How it works: First, put in all the information mentioned in this first paragraph of this story. It determines whether you’re eligible for any subsidies through the federal marketplace. Then, something happens on the backend. Hooper says it cross-references data from more than 13 million insurance claims that he accumulated with the help of professors at the University of Pennsylvania and his co-founder, 22-year-old Matt McPhail. It compares your needs to what’s provided in thousands of plans both on and off the public marketplaces.
“The university helped us apply through some different states that were releasing it, so we were accessing (the data) that way,” he said. “It’s all de-identified, but we know this person had this condition and this health plan.”
Based on the information the customer provides, the site can come up with the best plan to treat a chronic condition or fill your routine prescription or simply be there in case of emergency and for preventive services. It locates specific primary care physicians and will determine what plans they’re a part of and which they aren’t. It breaks the data down into 26 different variables that take into account whether the consumer needs any medical equipment or if generic prescriptions exist for whatever health condition may be an issue. The goal, says Hooper, is to go beyond premiums and deductibles.
“We wanted to empower consumers to care about getting the best care or the most out of their healthcare dollar,” he said. “We’ve really tried to engage with consumers and test different ideas and see what’s most valuable to them.”
A pilot study at the University of Pennsylvania found that the program saves about $500 on users’ plans, Hooper says. Natalie Wills says she saved about that much and avoided a higher deductible. The Dallas resident was Hooper’s first customer and is the freelance designer responsible for the graphics on the site.
Wills, 30, was insured via her husband’s employer-sponsored coverage until the price to cover them and their two children got too high.
“We were paying about almost $800 for me and two little boys and then we just had a really high, I think $15,000, deductible,” Wills says.
Take Command pointed her toward a bronze plan through Blue Cross Blue Shield of Texas for $580 with a $1,200 deductible. Soon after choosing this, the company announced the same plan they would’ve been on jumped to $1,100 a month with an even higher deductible.
“When my husband came home and we started to figure out how to pay for it next year, we kind of panicked,” she said. “I know everything was going up in general, but it was really nice to see our premium was going to be $580 instead of $1,100.”
Hooper and McPhail are licensed brokers, meaning they can provide advice should anyone have questions about the service. They also make a commission off the insurance companies they steer their customers to. Going forward, they could license their database and algorithm to other companies. They may also decide to go another direction and further personalize the product.
“We’re looking at real-time decision support, almost like a mint.com interface,” Hooper says. “If we see that you went to the dentist and had your teeth cleaned and paid $400 and another person went to a different dentist for the same medical codes and only paid $300, we can let you know.”
But for now, they’re focusing on the current open enrollment period, which ends Monday. As for initial funding, Take Command Health won about $4,000 total from the University of Pennsylvania and a $5,000 grant during a California competition awarded by the Robert Wood Johnson Foundation. Hooper put in $8,000 of his own money to get off the ground and they’re also reaching out to investors for further funding. The startup operates out of the Dallas Entrepreneurial Center downtown and from a family friend’s office in Preston Center, Hooper says.
But is value a concern for typical customers, especially those who aren’t terribly familiar with the ins and outs of insurance? Of course, says Mimi Garcia, head of Enroll America’s Texas division. Enroll is a D.C.-based nonprofit charged with helping the pointing the uninsured toward the navigators who can help them sign up for insurance. It is an outreach group, partnering with community churches and politicians to speak to the underinsured and answer any questions.
She says it’s encouraging to see creative ideas that help put information in the hands of consumers, even if some may need more hands-on, face-to-face help.
“I think that this is exciting to see these new resources developing,” she said. “And I’m not familiar with (Take Command) so I can’t say ‘yay’ or ‘nay’ as to how good it is, but it’s exciting to me, the more resources that are coming out there to help consumers make informed choices about their coverage.”