Transcarent co-founder and CEO Glen Tullman.
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Livongo co-founder Glen Tullman has promised that his latest startup, Transcarent, will use AI to assist people navigate and pay for healthcare services, however it may very well be just one other solution to America’s growing $4.5 healthcare bill Trade trillions of dollars.
From Katie JenningsForbes contributor
GI’m flying to Tullman believes telehealth as we understand it is dead. The future, in keeping with the enterprise capital investor and serial entrepreneur, just isn’t video-based, but text-based. “All of the virtual care we do now will shift to chat,” he said ForbesIt is estimated that in three years, 80 to 85% of all telemedicine interactions you will have along with your doctor might be in writing.
It’s a daring prediction from the identical man who sold his last company, Livongo, which simplified diabetes care management, to telemedicine giant Teladoc for $18.5 billion because the market reached dizzying highs in 2020. As of Tuesday’s close, Teladoc had a market cap of $2.2 billion, which Tullman attributed to “poor leadership” and a costly, labor-intensive structure because of demand for video visit staffing. Text-based care and insights will bring a few “titanic shift” with the assistance of the most recent advances in generative artificial intelligence, he said.
Now, as a part of his latest project, Transcarent, he’s introducing a brand new AI chatbot based on the identical technology that powers ChatGPT announced a $126 million Series D at a $2.2 billion valuation earlier this month. The aim of the bot is to reply the questions on medical insurance that arise frequently greater than the half from Americans, like: How much do I actually have to pay for this doctor’s visit? How high is my deductible? Can you help me find a physician? This is a component of Transcarent’s goal to grow to be a one-stop shop that helps average Americans navigate the opaque and sometimes infuriating $4.5 trillion U.S. health care system.
Transcarent, which offers an app with 24/7 chat-based primary care services, lower-cost medication options, recommendations and second opinions, has raised $450 million since its founding in 2020 from investors including Tullman’s firm 7wire Ventures and General Catalyst. It also works directly with health systems to realize higher pricing for necessary health events akin to surgeries and cancer treatment.
But experts say Transcarent’s deal may very well be more of a band-aid than a panacea, although there may be a growing market – Grand View Research Estimates It amounts to $10 billion – to assist people find and pay for healthcare. The only reason this likelihood exists is due to dysfunction of the U.S. health care system, said Ge Bai, a professor of health care accounting and policy at Johns Hopkins University Forbes. “It exploits a structural weakness of the current healthcare system, namely the extreme complexity and lack of information among patients,” Bai said. Navigation services are more of an “optimization” than a “fundamental change,” she added, but there may be a lot waste within the system that “even a small tweak can still make a difference.”
Most healthcare navigation services rely heavily on human call centers, which incur high labor costs. This is where Tullman sees the best potential for his recent AI tool: to halve the prices. The bot is currently based on OpenAI’s GPT-4 large language model and includes specialized internal models that may determine whether a user has asked a medical query or is in an emergency at which point a human must intervene.
Tullman said firms currently pay $10 to $15 per worker per thirty days for human-based navigation services, while he plans to supply them for $5. “This is truly a generational move,” Tullman said. “We have evolved from boring navigation that wasn’t really interesting to a place where you can take care of all your worries.” Transcarent will offer the tool to its customers from January 2025.
These customers are largely employers, as Transcarent targets a particular kind of medical insurance: self-funded plans. According to 2021 estimates from the Department of Labor, roughly 134 million Americans receive medical insurance advantages through their employer, where the employer pays for all of its employees’ health care costs (the most recent available data). According to healthcare research organization KFF, these costs have been steadily rising, rising 7% in 2023 to $8,435 in annual premiums for a single employee. These ever-increasing costs have spawned a whole industry dedicated to helping employers reduce their overall expenses by supporting their employees with their healthcare options.
“This market is a small niche right now,” said Chris Whaley, a health policy professor at Brown University Forbes. “But as health care costs continue to rise and many employers face inflationary pressures, this will most likely actually increase.”
In attempting to capture this market, Tullman is competing against a mixture of startups like Carrum Health and Included Health, in addition to established firms like Quantum Health and publicly traded Accolade Health, which can have $360 million in revenue in 2023 a market cap of $577 million at Tuesday’s close. In the fourth quarter, Accolade also posted positive EBITDA for the primary time – measure of the corporate’s core operating profitability, even though it posted a lack of $7.5 million for the yr, Bai said. Tullman said Transcarent just isn’t yet profitable and is nearing $100 million in revenue at the top of 2023.
“It’s all background noise until someone has an event that triggers the need for help navigating the healthcare system.”
This recent health The Benefits Bot builds on Transcarent’s experience with an AI bot that helps its doctors with patient intake, which the corporate acquired from healthcare AI startup 98point6 in 2023 for $100 million. Along with the bot, Transcarent also gained 98point6’s physician group and employer clients, in addition to what Tullman called a “golden asset” that hasn’t yet been publicly disclosed: 1 million patient-doctor chat conversations over five years. This data will now be used to validate and perform security testing on the brand new tool.
When Forbes When the chatbot demonstrated a prototype of the AI tool, it was in a position to detect when an individual sought medical advice. In response to an issue about shoulder pain, the bot really helpful talking to a virtual physical therapist or in search of orthopedic advice. When asked about suicidal thoughts, talking to an individual was also really helpful. Ben Nguyen, a physician and senior product manager at Transcarent, said that if the bot was asked something about self-harm in a real-world situation, that chat would immediately be redirected to a human.
It also successfully answered easy questions on medical insurance, akin to: B. How much money was left before the deductible was claimed and the way much an in-network primary care visit may cost. But it struggled with some complex questions and failed when asked to search out a Spanish-speaking orthopedic surgeon within the Bay Area, recommending a psychiatrist as a substitute. (However, it was in a position to accurately recommend a Spanish-speaking endocrinologist within the Bay Area.)
Competitors could simply develop their very own GPT-4-based versions of the identical kind of chatbot, but Tullman is not anxious about copycats. Even though it’s generally believed that developing AI tools with basic models is quick and cheap, it’s still expensive, he said. From the computing power to all of the training and validation needed to make the bot work well and safely for patrons, constructing an identical bot would still cost hundreds of thousands, which Tullman says might be too high a hurdle for the competition.
Even if the bot works well technically, there continues to be a giant hurdle: Will employees actually use it? Healthcare consulting firm Mercer, a division of MarshMcLennan, estimates that 46% of firms with 20,000 or more employees already offer some type of advocacy or navigation solutions to their employees, but adoption varies widely from company to company. “One of the age-old challenges is that none of it really matters until it really does,” said Jonathan Pas, partner at MercerWELL. “It’s all background noise until someone has an event that triggers the need for help navigating the healthcare system.”
This was announced by Transcarent customer Pilot Flying J, the gas and retail chain acquired by Berkshire Hathaway initially of the yr Forbes Approximately 53% of the corporate’s 19,000 eligible employees and dependents have downloaded the Transcarent app and 77% of those are energetic users. Diana Morgan, Director of Benefits and Wellbeing at Pilot, believes that is partly because of the premium discount that Pilot offers participants, but it’s also about giving people “more opportunities to understand what’s going on.” “happened to your health.”
For Tullman, it’s all about making this experience as seamless as possible, just like his Livongo playbook. He didn’t invent blood glucose monitoring – he acquired the hardware and made it much easier for diabetics to manage their insulin levels, and combined that with advantages like free test strips. With Transcarent, he has also acquired other firms to assemble the vital parts to make sure a smooth experience for patients. “This creates Amazon for healthcare,” he said. “It’s a place where you can get all your care.”
