ACA or Not, Accolade Sees Growing Demand For Healthcare Innovation

As if innovating in healthcare wasn’t difficult enough, companies engaged in the endeavor now face an uncertain landscape as the incoming Trump Administration takes aim at the Affordable Care Act.

Healthcare IT company Accolade, one of the bigger recent arrivals to Seattle’s healthcare innovation cluster, is watching closely. So far, CEO Rajeev Singh sees little specific impact on Accolade, largely because the self-insured employers and health plans the company serves will still have people who need help navigating the healthcare system if the ACA is repealed, in full or in part.

Whatever happens to the ACA, “it won’t happen overnight,” Singh says. Moreover, he adds, the bigger shifts in how we pay for healthcare—which are creating opportunities for innovation—are unlikely to be reversed by ending Obamacare.

So, Accolade is continuing on course. On Wednesday, the company announced a partnership with another Seattle-area healthcare IT company, Limeade, which helps employers incentivize behaviors that keep their employees healthy. (We’ll get to that in a minute.)

I met with Singh at Accolade’s Seattle “co-headquarters” on the seventh floor of One Convention Place the day after the election. He had just concluded a quarterly executive leadership team meeting in a board room named for the landmark Nirvana album “Nevermind.” Before that, he had spent a sleepless night trying to make sense of the outcome and explain it to his kids. “It was an important parenting night last night,” he says.

Singh took the helm of Accolade in 2015, a year after SAP’s $8.3 billion acquisition of Concur, the travel expense software company he built over two decades with Mike Hilton—now Accolade’s chief product officer—and his brother, Steve Singh. Accolade recently added $70 million to its Series E funding round from Andreessen Horowitz and Seattle-based Madrona Venture Group.

(Rajeev Singh and Madrona’s Matt McIlwain will delve deeper into Accolade’s story and Seattle’s opportunity to apply its cloud computing and machine learning expertise in healthcare at Xconomy Intersect on Dec. 8. Click here to register.)

Accolade, founded in 2007 in Plymouth Meeting, PA—the location of its other co-headquarters—sells its services to self-insured employers and health plans. What it provides is a single, consistent point of contact for people covered by those plans to navigate a system that Singh describes as “confusion, complexity, anxiety, and duress.”

“If you’re a wealthy person in this country today, you go get a concierge doctor and you pay $35,000, $40,000 a year for that concierge doc,” Singh explains. “And they are your central point of navigation. Anything goes wrong with anybody in your family, you call them and they fix it. This is fundamentally the democratization of that idea.”

Accolade’s health advisors build a relationship with each person covered—it typically reaches 70 percent of an employer’s covered population in the first year—seizing the opportunity hidden in even the most mundane requests. Where a typical insurance plan might send out a replacement insurance card without thinking twice, Accolade advisors use the opportunity to ask follow up questions and learn more about each person’s health goals.

“We’ll identify a lot of care activities or care events before they ever show up in the claims data or the provider data,” Singh says. “We’ll help those people make good decisions about those care events before they go to the doctor, and in so doing we’ll drive costs down for the corporation.”

Accolade says its customers see costs of healthcare insurance claims decrease 5 to 15 percent.

“You’ll see people have less emergency room visits, less in-patient stays, less outpatient stays,” Singh says. “But you’ll see them taking more advantage of their prescription medications. More advantage of behavior health solutions to deal with things like depression and anxiety, et cetera, that are a significant driver of healthcare costs.”

ACA Impact

Employers, insurance providers, and health systems will remain focused on reducing healthcare costs regardless of the fate of the Affordable Care Act, Singh says. Its repeal would not have a significant strategic impact on Accolade, he says. He’s also skeptical that repealing the ACA will reverse the trend away from the fee-for-service model, in which healthcare providers are paid for procedures rather than outcomes.

“The world’s moving toward population health management, and the idea that I have to think about both the quality of care I deliver and the value of the care I deliver—that’s now deeply embedded,” Singh says. “I think Obamacare gave it a healthy shove in the right direction. But that’s now deeply embedded in the way Medicare pays for healthcare, and therefore now deeply embedded in the way the private sector behaves in terms of delivering healthcare. Undoing all of that doesn’t come by undoing Obamacare.”

Tech-Enabled Advice

Accolade and healthcare IT companies like it have embraced the trend away from pay-for-service, and see technology as a key piece of the puzzle. Accolade’s concierge service is delivered over the phone, via secure messaging, or through its online portal. It’s supported by machine learning software, as well as a deep bench of medical professionals ready to assist the health advisors with more complicated questions.

Accolade’s is a high-touch service—phone calls to health assistants might run eight to 10 minutes long—which raises questions about how it scales up as the company adds more customers. It already serves upwards of 700,000 people—employees of customers such as Comcast, Lowes, and HP—and it has its sights set on continued growth. Accolade was one of the fastest growing healthcare companies on the Inc. 5000 list between 2009 and 2014. Its 2015 revenue was $74.7 million, according to the 2016 Inc. 5000 ranking. Singh says he expects the company’s organic growth rate this year to be more than 50 percent.

Singh says technology enables the personalized service. Bespoke software tools help Accolade employees minimize time spent searching for answers and documenting interactions. Machine learning plays a role, helping the software learn from each interaction. Say a customer has a question about whether their insurance covers a visit to the chiropractor. “I know exactly who the human being is, I can pop up the 10 things you might want to tell the person about what happens next, and when my health assistant selects one of those 10 things, my machine learns that that brilliant person just made a decision about what should be delivered to this consumer. We get better and better with each interaction. And so, our productivity levels go up every single month,” Singh says.

Skills in Seattle

Part of Singh’s impetus for establishing another headquarters and engineering center in Seattle was … Next Page »

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Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com. Follow @bromano

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