A new breed of health insurers is taking a page out of UnitedHealth’s book and providing care directly to patients, and it could reshape the US healthcare industry

Telemedicine online doctor appointment
A doctor sees a patient online.

  • Health insurer upstarts have made care delivery a core part of their business strategies.
  • Alignment, Bright, Clover, and Devoted all employ doctors and care for their directly.
  • They’re betting that doing so will help them lower costs and compete against industry giants.
  • This article is part of a series called “Future of Healthcare,” which explores how technology is driving innovation in the development of healthcare.

A new breed of health insurers is betting that providing care directly to patients will help them compete against industry giants and grow their footprints across the country.

These young insurers, like Alignment Healthcare, Bright Health, Clover Health, and Devoted Health have made employing doctors and delivering healthcare a core part of their strategies.

In some ways, they’re following a playbook etched out years before them by incumbents like UnitedHealth Group, which has worked for more than a decade to assemble a fleet of 56,000 doctors and counting by acquiring medical groups.

Humana, which deals in health plans for elderly people, has been buying and building out primary-care clinics for years. And Blue Cross Blue Shield insurers in Florida, Tennessee, and Texas have stood up dozens of retail clinics.

But while the big players have waded into providing care over time, the new-age insurers, which bank on using sophisticated technology to improve care and lower costs, have it in their DNA. Unlike the dominant insurers, they’ve largely steered clear of physical clinics, focusing instead on providing care virtually or in people’s homes.

It’s an approach that requires less capital, but still arms the upstarts with the tools needed give their members more ways to get care, and better control how much they spend on care.

“It gives us the reliability of making sure we can bend that cost curve everywhere we go without having to go into each market with a bunch of bricks and mortar,” Alignment CEO John Kao said. Alignment employs about 150 clinicians that care for the sickest plan members virtually and at their homes.

Alignment and Devoted are seeing patients online and at home

Alignment, the California-based Medicare Advantage insurer with 83,000 members, uses its technology to find the sickest, most expensive plan members who have chronic illnesses and frequent the hospital.

Alignment’s group of employed doctors, nurses, case managers, social workers, and behavioral health coaches care for 4,000 of these members, in partnership with their regular primary-care doctors. Being able to provide care itself is just more efficient, Kao said, and it helps save Alignment some money, which it can put back into better health benefits and attract more customers.

Waltham, Massachusetts-based Devoted, which had a little more than 20,000 Medicare Advantage members at the end of 2020, has its own medical group of employed doctors and other clinicians who provide virtual care to plan members at home.

Its services “wrap around and complement” the health care providers that Devoted partners with, so members get the best care at the right place and time, a spokesman for the company said in an email.

Clover is expanding its in-house home healthcare program

Meanwhile, insurer Clover Health also built up a home-healthcare program mostly run by employed healthcare providers.

The insurer, which had 66,300 Medicare Advantage members in March, uses claims data and medical records to look for people with multiple chronic illnesses, who are frail or home-bound, or visit the emergency department often. Its technology will then tell an eligible patient’s primary-care doctor that they might benefit from home visits, which are conducted by Clover’s internal care teams, Dr. Kumar Dharmarajan, head of Clover Home Care, told Insider.

Dharmarajan said the program increases access to care for older adults who don’t leave the house. It also allows Clover to get a picture of non-medical factors that could lead to worse health, like disorganized medications or fall hazards like electrical cords on the floor. An office visit wouldn’t reveal that kind of information.

In New Jersey alone, Clover expects to have between 3,000 and 3,500 Medicare Advantage members in its home care program by the end of this year, compared with just 200 patients in 2017, Dharmarajan said. It’s set to expand further as Clover starts offering home care to traditional Medicare enrollees that it’s managing through a federal program.

Bright is buying up medical practices

Most young insurers aren’t building clinics, but Bright Health is the exception.

Its CEO Mike Mikan, a former UnitedHealth Group executive, is following his former employer’s blueprint and buying up medical practices.

Bright, which provides health coverage to 623,000 individuals, families, and seniors, is tucking these acquisitions into its new care delivery business called NeueHealth. The business owns or manages care for 61 clinics, but it also works closely with outside provider groups and arms them with analytics and other tools to they can provide better care.

In both cases, the goal is for the insurer and provider to get on the same page and partner to improve patients’ health and lower costs under a payment model where each side wins when it works.

That’s different the old insurance strategy of restricting care, Mikan said.

“What we really want to promote is the healthcare system to move to a value-based model where you’re really rewarding performance based on the quality of the care they provide, not just the quantity of care,” he said. “Every consumer is better served when they’re part of an aligned model.”

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We’re on the brink of a 3rd US COVID-19 vaccine


It’s snowy again here in Denver, just in time for the East Coast to get a break. My dog is loving it, and I wish I was tech-savvy enough to include videos in emails. You’ll have to just imagine a 70-pound pup bounding through a foot of snow. 

This week, we’ve gotten promising news about vaccines and taken a closer look at when founder relationships fall apart and one-time kingmakers’ futures become more uncertain. We also took stock of what’s coming next for virtual-care providers and gene therapy companies

Are you new to this newsletter? Subscribe here for daily updates from the healthcare team at Insider

johnson and johnson covid vaccine
Johnson & Johnson’s coronavirus vaccine is delivered as a single shot, while both Pfizer and Moderna’s require two jabs.

We’re on the brink of another vaccine authorization

There’s a lot of vaccine news to be optimistic about this week. 

As Aylin Woodward reported, the more data we get, the more it seems vaccinated people aren’t spreading the coronavirus. That’s been a big unanswered question, since clinical trials have focused on whether vaccines prevent people from getting sick with COVID-19 rather than whether they’re transmitting it. 

There’s also more data in the debate over delaying second vaccine doses, Andrew Dunn reports.

He spoke with experts this week about data out of Scotland’s vaccine rollout showing that protection starts to drop after five weeks of receiving the first dose. That suggests delaying second doses is a bad idea.

“I think delaying the second dose for a considerable period of time is a mistake,” Dr. Paul Offit, the director of the Vaccine Education Center at Children’s Hospital of Philadelphia, told Andrew.

Meanwhile, Moderna and Pfizer are both gearing up to test booster shots to combat variants.

Finally, we’re preparing for another vaccine authorization in the US as Johnson & Johnson’s one-dose shot goes up for review. 

A Food and Drug Administration expert panel is meeting today to hash out the evidence on the safety and effectiveness of the shot. 

If authorized, the US would have three vaccines at its disposal, speeding up the time it might take to get the country vaccinated, Aria Bendix reports. 

Hilary Brueck has a closer look at how the three shots – Moderna’s, Pfizer/BioNTech’s, and J&J’s – compare

Want a closer look at the evidence presented for J&J’s coronavirus vaccine? Andrew took a deep dive into FDA documents released Wednesday.

Of note, here’s a chart of how well the vaccine works. 

Read the full story here>>

One simple chart shows how well J&J’s single-dose coronavirus vaccine works, with protection starting after 2 weeks

comcast building
Comcast sign logo in the wall of a building at Universal Studios.

When things fall apart

This week, our colleague Melia Russell published an important look at what happened between mental health startup Modern Health’s cofounders. 

It’s a look at what happens when founder relationships go south, but also the pressure that can face young companies looking to strike big deals in healthcare. 

You can read the full investigation here>>

In the vein of when things start to unravel, Megan Hernbroth has the story of one-time healthcare benefits kingmaker Comcast Ventures.

Its future in healthcare is uncertain, she learned. 

Read the full story here>>

Comcast Ventures became an unlikely benefits-startup kingmaker with a prescient bet on Accolade. Now, the fund’s healthcare future is uncertain after investing-team members exited.

Oscar Health CEO Mario Schlosser
Oscar Health CEO Mario Schlosser

Money is pouring into upstarts trying to change the way healthcare is paid for

It’s a good time to be a company looking to change how healthcare is paid for. 

In 2020, investors poured $3.6 billion into companies focused on new ways to pay for care – both insurers and providers.

Included among the funding total – a fresh $380 million Devoted Health quietly raised, Blake Dodge and Shelby Livingston report. 

Also included is Oscar Health, which is set to go public. In an update to its IPO filing, the company said it’s looking to raise roughly $1 billion at a valuation of $8.2 billion. 

But it’s not all smooth sailing. Dr. Atul Gawande, the one-time CEO of now-shuttered Haven, spoke candidly about his experience in a February interview with the UCSF School of Medicine. 

In it, he offered the most detailed remarks to date on why Amazon’s health venture with JPMorgan and Berkshire Hathaway fell apart. A system of employer-funded healthcare here in the US is at the center of it. 

Blake took a look at the biggest backers involved in the record funding year for so-called “value-based care” startups. 

Read the full story here>>

Startups trying to change the way healthcare is paid for pulled in a record $3.6 billion in 2020. Meet the top 8 VC firms that placed the most bets.

What’s coming next

I’ll leave you with a few notable trends our team picked up on this week. 

Thoughts? Tips? Reach me at lramsey@businessinsider.com, and you can reach the whole healthcare team at healthcare@businessinsider.com

– Lydia

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What you need to know about J&J’s coronavirus vaccine


Yesterday was a big day in vaccine news. We learned more about how well Johnson & Johnson’s vaccine works and how safe it is. And we also learned that Moderna has a plan for tackling variants. That includes a new shot it’s sending to NIH for testing.  

Here’s a look at how J&J’s shot compares to Pfizer’s and Moderna’s>>

Also in healthcare news: What happened to Comcast Ventures, a onetime healthcare startup kingmaker, the companies gene therapy leaders may need to help fix safety issues, and Devoted Health quietly raised $380 million in 2020

comcast building
Comcast sign logo in the wall of a building at Universal Studios.

Comcast Ventures was once a kingmaker for healthcare benefits startups. Then its team fell apart.

Read the full story from Megan Hernbroth here>>

A dispensing chemist prepares drugs for a chemotherapy treatment in a sterile room at Antoine-Lacassagne Cancer Centre.

Gene therapy leaders may need M&A to solve their safety issues. Here are the 8 companies analysts are watching.

Read the full list from Allison DeAngelis here>>

Todd Park
Devoted Health co-founder and executive chairman Todd Park.

Devoted Health quietly raised $380 million to gear up for fierce competition in the red-hot health-plan market for older people

Read the full scoop from Blake Dodge and Shelby Livingston here>>

More stories we’re reading:

– Lydia

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