Inside the secret club that helps determine which healthcare startups blow up

  • There's a little-known club that matches healthcare startups with companies looking at new ways to provide healthcare benefits to their employees. 
  • Called the Employer Health Innovation Roundtable, the group runs "Shark Tank" style days of pitches from startups that are evaluated by big companies like Google, Delta, and Boeing. 
  • From there, the employers can choose to work with one of the startups in a pilot, which can be a massive leg up for young companies looking to break into the healthcare industry.
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In 2013, Josh Riff started receiving calls that changed how he thought about health benefits.

Riff at the time was working as a director of health and wellbeing at the retailer Target. On the other end of the line were executives from companies like Castlight Health, a healthcare navigation company, who were looking to strike deals to care for Target's workers.

After getting a few calls from companies like Castlight, Riff realized there was a trend emerging of healthcare startups pitching employers directly. Employers could make decisions about new health benefits faster this way than if they worked through staid health-insurance companies.

But Riff also found he was spending too much time talking with startups, vetting them, and refining their ideas into feasible benefits for Target.

Riff learned that his peers at other major companies were facing the same challenge. To help, in 2014 he founded the Employer Health Innovation Roundtable. 

EHIR is trying to make the process of learning about startups taking new approaches to healthcare easier for employers who are inundated with pitches. That happens through short 30-minute presentations and pilots between young companies and major employers like Delta, Google, Boeing, and Nike. 

Since its start at the side of Riff's desk, EHIR has grown to include about 80 major employers and has launched programs for health plans and health systems. Along the way, it's helping startups pave the way to become success stories. 

Riff left Target in 2014 to join Optum, where he worked for about 2 years. In 2016, he hired Michael Laquere, a fellow former Target benefits employee, as EHIR CEO. Riff later worked as CEO of diabetes company Onduo from 2016 to June 2020.

EHIR is quiet about its work, but can give startups a big boost

Healthcare startups that participated in EHIR told Business Insider the program accelerated their success, helping them land big clients and grow their companies.

"I really do credit EHIR for our success," said Lindsay Jurist-Rosner, the CEO of Wellthy, a startup that helps people care for family members with serious diseases.

Some participants like fertility-benefits company Progyny and digital-health company Livongo — both of which presented in spring 2016 — have gone public in the years since, reaching multi-billion-dollar valuations. Teladoc in August announced plans for an $18.5 billion acquisition of Livongo. 

The group is relatively quiet about the work it does, extending invitations to additional employers by referral. Startups can apply to present, and are often pointed in EHIR's by employers themselves.

Jurist-Rosner first heard about EHIR after a conversation with a benefits leader at Harvard Business School. At the time, Wellthy was going directly to consumers to sell its approach of helping people care for family members with conditions like cancer or Parkinson's disease. The benefits leader at HBS suggested she might appeal to a group of employers. Wellthy first presented in 2016. 

Business Insider spoke with half a dozen employers and healthcare companies that have participated in the program, who described the organization as a "private club" and matchmaking service. 

EHIR draws its power from the unusual way healthcare is funded in the US. About half of all Americans get their health insurance from an employer, and employers spend an estimated $880 billion on healthcare for their workers each year. That gives them a big incentive to find cheaper or better ways to take care of their workers.

EHIR says its members provide health coverage to about 8 million people. 

Employers match with potential startup partners after "Shark Tank" style pitches

Employers who join EHIR pay a membership fee and agree to join other companies to hear pitches from startups. The startups apply to EHIR—their applications are first evaluated by EHIR staff, then the companies vote on which ones they're most interested in hearing from.

EHIR founder Josh Riff and CEO Michael LaquereMichael Laquere

Twice a year, the employers convene to listen to five hours of pitching. Each of the 10 selected startups has 20 minutes to present and 10 minutes to answer questions.

The expectation is that by the end of the presentations the employers will match up with at least one of the presenters to explore a pilot program. 

EHIR serves as a neutral facilitator, charging a fee for the startups to present, but otherwise not taking a vested interest in promoting the companies.

"We maintain Switzerland objectivity," said Sally Wellborn, an adviser to EHIR and a former cohort member through her work as senior vice president of global benefits at Walmart.

The role EHIR plays in connecting the employers with vetted startups has been a big plus for benefits leaders looking to try something new.  

"What's been great with EHIR is they've been crushing it in terms of looking at any and all innovators in an objective independent way,"  Jason Parrott, an adviser to EHIR and a member of the global healthcare and wellbeing strategy team at Boeing, said. 

The venue for the "Shark Tank"-style pitches changes from session to session. Instead of renting conference spaces, the companies take turns hosting. In the early days, it was a way for EHIR to save money, Riff said.

Since then, EHIR has kept doing it because the participants love it, he said. It's meant participants have gotten to watch planes be built at Boeing and run the track at Nike's Oregon headquarters. (This fall, startups will present virtually.)

EHIR streamlines the pitching process for large employers looking for new benefits ideas 

When Denise King and Amy Johnson at Medtronic learned about EHIR, they were upset they weren't already a part of the program. 

The two, who oversee global and US benefits respectively, joined EHIR at the end of 2017. They now send potential partners to EHIR for vetting, to avoid being overwhelmed by pitches. 

"It allows us to get out of this constant vendor harassment that occurs in the marketplace," King said. 

At Medtronic, part of their jobs involves vetting new ideas that might be worth rolling out to employees. King and Johnson said they usually come out of each EHIR session with a a long list of potential partners, and they've gone on to roll out a number to their employees, including Wellthy and Ovia Health, a fertility company.

Having companies commit to piloting or implementing programs the startups were selling was a big draw for Boeing's Parrott. 

"We can each take a role in fostering innovation for the greater good," Parrott said. 

EHIR helps startups looking to break into the healthcare industry 

For Grand Rounds, a startup that helps people navigate their healthcare, taking part in EHIR presentations was a new way to reach potential customers. 

"EHIR was a refreshing and completely different take on how to introduce innovation to the market," Grand Rounds CEO Owen Tripp said. 

The idea that companies had to pick startups to match with helped create a sense of urgency that helped get deals done. 

That's especially helpful for younger companies. When Grand Rounds first met the EHIR team about six years ago, Grand Round had just a few hundred thousand members, Tripp estimated. Today, the company has about 6 million members. Grand Rounds presented as part of EHIR's Spring 2018 session. 

Karin Ajmani, formerly president and chief strategy officer at fertility benefits company Progyny came across EHIR about five years ago, presenting for the first time in front of a cohort at Disneyland in 2016.

After that meeting, Progyny ended up being adopted by one of the attendees. Progyny went public in 2019, and has a market value of $2.5 billion.

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