Former UnitedHealthcare CEO Bob Sheehy is rejoining the marketplace with his latest endeavor: Bright Health, a new health insurance startup. As co-founder and CEO, Sheehy has secured $80 million in funding from venture capitalists and is eyeing PPACA exchanges and Medicare Advantage.
Kyle Rolfing and Dr. Tom Valdivia, Sheehy’s co-founders, will act as president and chief medical officer, respectively. The two come from executive positions at Definity Health, a company that was bought out by UnitedHealth Group in 2004.
Bright Health will sell narrow-network plans on and off PPACA’s exchanges in 2017 in one state, although it hasn’t been revealed which state that is yet (with the startup making its home in Minneapolis, my bet is on Minnesota, but you know what people say about assuming things). The announcement is a few months away, but Sheehy says the goal is to have Bright Health available in three to five states over the next five years.
The plans — exclusive organization plans (EPOs) — will be Bright Health’s only offering. Sheehy says there will be several EPO products patients can choose from, including options with coverage that is more inclusive, as well as high deductible and HSA pairings. Bright Health will also build partnerships with leading health care systems in each market to provide billing and claims processing, mobile technology, and simpler physician communication.
Narrow alignments with providers may give some consumers pause, but Sheehy says it will actually provide better patient care.
“Having a health plan structure with a single delivery system is a great way to evaluate and improve and coordinate care,” he said to Minnesota’s StarTribune. “If you don’t have a group of people you’re accountable for, it’s hard to know if you’re making a difference.”
As for Medicare Advantage, Bright Health is inching toward a contract with the Center for Medicare and Medicaid Services (CMS), anticipating an Advantage plan by 2018.
The growing reliance on technology will also play a major role in Bright Health’s mission, as “consumer-centric” advances like scheduling and helpful drug information will be easily accessible by smartphones. “We are really working to think how we can simplify the whole health care experience by using technology,” Sheehy said.
Bessemer Venture Partners and New Enterprise Associates led the $80 million investment round. The two VCs are no stranger to funding health care companies, as both have investments tied to Collective Health, GetInsured, and Liazon.
The latest funding will help secure Bright Health’s employees, as it’s in process of bringing 25 people on right now, and plans to have 50 by the end of 2016.