Startup Insider: Clover Health

San Francisco-based startup Clover Health wants to make insurance affordable for consumers and simple for physicians. To tackle this suite of challenges, Clover Health is using patient-centered analytics to connect members with personal care teams and promote a transparent, simpler insurance model.

"What we intend to do here is to strip away a lot of the convoluted, artificial and arbitrary constructs that get in the way of the simple act of caring for people," says Kris Gale, cofounder and chief technology officer of Clover Health. "We see ourselves fixing systemic problems to restore the natural order of healthcare."

Hence the company's name, Clover, which the founders felt evokes nature and the natural world, Mr. Gale says.

Here, Mr. Gale discusses Clover Health's origins, what it's been like to co-found a healthcare startup and what 2016 holds for the company.

Question: How did Clover Health come about?

Kris Gale: My partner Vivek Garipalli [CEO of Clover Health] decided to create a Medicare Advantage plan with the thesis that you could drive down costs by improving clinical outcomes, and do that by focusing on the care and management of chronic diseases. He started by building an insurance business around people from the hospital and provider side of the industry who wanted to focus on giving members the best possible clinical care, and then realized the missing piece to make it scalable was technology and data science. That's when he reached out to me to put together those teams.

Q: What was the unmet need in the insurance industry you hoped to address?

KG: The insurance industry has historically seen itself as a financial service for paying medical expenses and has punted the responsibility of ensuring the best possible clinical care to the provider side of the industry. If they want to improve clinical outcomes, they look for new ways of paying to incentivize providers to improve clinical outcomes. Clover sees this differently — rather than pushing more burden and more complexity on our providers, we want to partner with them to coordinate care, identify care gaps, and use our own staff of nurse practitioners, social workers and care teams to fill those care gaps.

Q: Does tackling the problem of insurance affordability help to improve other challenges in the healthcare industry? If so, how and which challenges?

KG: It's actually the opposite. Insurance affordability is the outcome of what we're doing by tackling the other challenges in healthcare. By having better data integration, better proactive care interventions and improved clinical outcomes, we're able to provide more affordable health insurance. Health insurance premiums have to account for all of the hospital visits and emergency care that result from missed opportunities in preventive care and care coordination. By improving those things, we can offer more robust health insurance with lower out-of-pocket costs for our members.

Q: How does the service work?

KG: Clover, as an insurance company, is at the center of our members' consumption of healthcare. We pay claims for primary care, for specialist visits, for hospitalizations and other healthcare services, and can build a complete clinical and risk profile of our members from this data.

But we go the next step to actually use these profiles to identify proactive intervention opportunities, and we use our staff of nurse practitioners, social workers and care teams to ensure those interventions happen — either by coordinating with members' doctors or by visiting them ourselves in their homes.

We track the effectiveness of these interventions and adjust them over time to continuously improve the health outcomes of our members. As we reduce costs by preventing hospital visits, we can pass those cost savings on to our members.

Q: What has it been like to found and operate a healthcare startup?

KG: As someone with a technology background, it's been incredibly rewarding to be working on one of the stickiest problems in the U.S. I feel very fortunate to be in a position to apply the skills I've built up during my career to a problem of this magnitude. It's been incredible to bring together healthcare domain experts, clinicians, insurance business experts, data scientists and software engineers to solve a major financial and quality of life problem.

What changes or growth do you expect Clover to see in the coming year?

KG: 2016 is about leveraging the people, data, software and operational framework we put together in 2015. We're going to focus on optimizing our effectiveness at driving down costs by improving health outcomes. We're going to fine-tune a model we can take into new markets in 2017 and beyond.

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