Transforming Care With Transcarent’s Glen Tullman

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In this episode Glen Tullman, Chairman and CEO of Transcarent joins Health Care Facilities & Managed Care analyst Charles Rhyee. Together they look at how the U.S. healthcare system struggles to deliver better outcomes while spending spirals upwards and explore a better way of leveraging technology to connect directly to providers and deliver high quality but lower-cost care. Press play to listen to the podcast.

Transcript

Speaker 1:

Welcome to Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.

Charles Rhyee:

Hello. My name is Charles Rhyee. Cowen’s healthcare technology analyst, and welcome to the Cowen FutureHealth Podcast. Today’s podcast is part of our monthly series that continues Cowen’s efforts to bring together thought leaders, innovators, and investors, to discuss how the convergence of healthcare, technology and consumerism is changing the way we look at health, healthcare and the healthcare system. In this episode, we look at how our current system of healthcare delivery struggles to deliver better outcomes while we continue to watch costs, continue to spiral upwards. And we’ll explore if there isn’t a better way of leveraging technology and connecting directly to providers to deliver higher quality, but lower cost care.

Charles Rhyee:

Joining me to discuss a topic is Glen Tullman. He is the chairman and CEO of Transcarent. A new, different, and better healthcare experience company of self-insured employers and their families. Transcarent empowers consumers with the information, guidance and access that leads to better care, better outcomes and more cost effective decisions for everyone. And for those paying attention, you might notice that Glen was also the founder of Livongo, the leading digital health companies, supporting patients with chronic conditions, particular diabetes, which was acquired by Teladoc Health at the end of 2020. So Glen, thank you for joining us today.

Glen Tullman:

It’s always great to be with you, Charles.

Charles Rhyee:

Yeah. Great to see you as well. You’ve described our current healthcare system is broken and obviously one of the reasons that led you to start Transcarent. But maybe you can fill us in, what is broken about our system in your view?

Glen Tullman:

Well, there’s a number of ways to look at it, but the first way is how all of us, health consumers, you, me, our families, our friends feel about the healthcare system today. And if you survey people, they will tell you three things. They’ll say healthcare is more confusing, more complex and more costly than ever before. And the lab one, and that it’s getting worse, not better. So that’s the way that consumers, all of us feel about our healthcare system. And there’s just no one who feels like, “Oh, this has been a great experience.” If we go to large self-insured employers who pay for about 60% of all of our care, they will tell you that over the last 20 years, they’ve seen that the number of people who are satisfied, the experience has actually worsened, that the costs have gone up and they have no measurable evidence of improvement in the quality of care. So our employer population is unhappy.

Glen Tullman:

And last but not least, if you look at the providers, it’s legendary how much they dislike the payers, how unhappy they are. That’s been magnified by the pandemic and they’re exhausted. They’re exhausted about fighting with payers. They just want to take care of people and we made it. So the healthcare system isn’t working. The last metric I would cite is if you look at our quality metrics, we’re not number one in the world. And in many metrics, we’re not in the top five or top 10 in the world, and yet we are number one in spending. So I think that pretty much defines a system that’s not working today. And it’s a big part of the reason that I decided to start Transcarent.

Charles Rhyee:

And you speak to some of the incentive structures among all the stakeholders here. You could argue that some someone like Haven, Amazon, they could see the problem and try to address it but that doesn’t seem to really work out in the end. What do you think happened there?

Glen Tullman:

Well, first of all, Haven was a wake up call for the industry and Jeff Bezos, I think said it best and for our listeners who aren’t familiar with Haven. Haven was the joint venture between JP Morgan, Chase, Amazon and Berkshire Hathaway. And the three of those organizations, three of the largest, most respective organizations in the world got together. And they said, “We have to address this healthcare issue because it’s not getting fixed.” And Jeff Bezos said that… His conclusion was that there would never be alignment, an important word… there would never be alignment between payers, PBMs and employers, because every time that the employers spend more money, the payers and PBMs make more money.

Glen Tullman:

So he said there would never be a case where they had a true incentive to reduce the cost of healthcare. So based on that, they started Haven and there were a number of challenges with Haven. One was they picked an incredibly brilliant guy who had never managed a company before or built one before, but a great legendary healthcare writer, teacher, advocator physician. So that was challenge one. Challenge two was, it was organized as a not for profit, which meant that you didn’t get some of the best talent who was going to work for profit entities, with stock programs, and the light.

Glen Tullman:

And third, each of the three entities had different objectives. Amazon wanted to be in the healthcare business. JP Morgan didn’t really want to upset it’s large banking clients. Many of which were healthcare payer organizations. And last but not least Berkshire Hathaway really is not one entity, it’s 60 or 70 different companies, each of which has their own healthcare objectives. So the three were unlikely partners and obviously decided not to go forward primarily not because it wasn’t the right problem to identify, but because there wasn’t alignment in terms of what needed to get done.

Charles Rhyee:

Yeah. And it’s an interesting case study. I think we’ll all look back and we’ll all digest over time. But as you think about, about this broken system that we’re facing, what are some of the key ingredients that you think are missing from this that we need to really address that people are really looking for them?

Glen Tullman:

Well, I think first and foremost people in any consumer transaction want three thing, and you mentioned them in your introduction. They want transparent information. So they want to know what’s available out there in the market. They want unbiased trusted guidance. And that is, tell me what I really should do. Not where you make more money, but tell me what is the best thing for me to do. And last but not least, they want access to care. It doesn’t help me if you say the best place to get my knee fixed in Chicago is Rush, but I can’t get an appointment there. That actually adds to frustration rather than reduces it. It doesn’t help me if you give me three choices and I know there’s a fourth high quality choice, but you didn’t mention it because it’s not on your narrow network. So the existing system breaks down trust.

Glen Tullman:

And what we’ve committed to at Transcarent is to give people clear information, transparent information about the highest quality providers in the market. Give them guidance as to whether or not they actually need the surgery and whether it’s the appropriate surgery. And that comes through second opinions or expert medical opinions. And last but not least make sure that it’s easy to access the top quality facilities and access is not just about getting in, access also is affordability. And in our system, we’ve made it possible to do something that really nobody else is able to do. We’ve convinced employers that if you send your employees, whether it’s the person driving a truck, working in the warehouse, working on the floor in a retailer or the CEO, doesn’t matter who it is. Sending them to a quality provider, giving them a high quality high value experience ultimately reduces your overall cost.

Glen Tullman:

And because of that, we’ve convinced many of these leading innovators out there to actually eliminate co-pays and co-insurance. If you think about it, co-pays simply reduce the accessibility, reduce the availability of services. I knew from my days many years ago at Allscripts, that if you want to reduce the number of people who pick up a medication, increase the co-pay. So who does that hurt? It hurts the people on the lowest rung of the economic continuum. And that’s under resource people, what we traditionally call poor people. And then we wonder why are they less healthy because we’ve made their meds unaffordable.

Glen Tullman:

So two things we do at Transcarent, one eliminate many of the co-pays. Two, the largest single cause of bankruptcy in the United States is co-insurance. Let’s say you need a hip replacement and it’s $100,000 and you have great insurance. That covers 90%, that’s considered great insurance. That means that you have a $10,000 bill. And yet something like 80% of all Americans have less than $5,000 of savings. So instantly you’ve said to someone either don’t get your hip fixed or go into bankruptcy. And that’s just unacceptable. So at Transcarent we’ve convinced employers that keeping their people healthy and their families healthy is a good, long term economic decision. And we’ve eliminated many of those co-pays and co-insurance while making access to high quality, high value providers available.

Charles Rhyee:

And I definitely want to jump more into the Transcarent model in a second here, but when you talk about these key areas, access, affordability you said earlier the fact that we as a nation spend the most, yet we get middling outcomes at best. That’s not necessarily though a problem that has gone unrecognized. I mean with the ACA we’ve established really a shift towards value based care. And we have all these new programs that are in demos at the government level, and you see a lot of commercial entities moving that direction as well and emerged from that. And a lot of new models of care center around value. Doesn’t the shift though indicate that we’re in a process of fixing what is arguably a broken system?

Glen Tullman:

Well, I think that it’s very clear that everyone understands the system is broken. So that’s not a challenge. And there are a number of efforts underway to address this. If you think about it, you look back for 20 years the payers have said to us, they’re going to address. And they fail. Then we had a number of navigators arise, and the navigators have been around for five years or more. These are folks like Accolade or included health or Quantum, and they’ve all failed because if they worked there, wouldn’t be need for Transcarent. I mean, at the end of the day, they have failed to improve the experience, to improve the care and to reduce the cost.

Glen Tullman:

And in fact, they’ve actually added millions of dollars of cost to the average employer because they charge an employer per employee per month. And they’ve not been able to show a return on investment. So the payers have failed. The provide the navigators have failed, and then you have a number of point solutions. And everybody loves the point. Solutions. People love Livongo. People love in adolescent and behavioral health, bright line. People love, and I could go on and on about different point solutions.

Glen Tullman:

But the challenge is, if you are an employer, now you have to contract with 18, 20, 25 different companies to deliver healthcare for your people. In the past, we were all told, well, you just need to sign with one of the big payers and they’ll take care of it. But it turned out that on almost everything, they weren’t doing a high quality job. So that’s why Transcarent came along to give people an experience that puts them back in charge. And that’s what we want across all of our life. We look for experiences.

Charles Rhyee:

You talk about the payers failing and maybe just to touch on that though. We have seen a real, I’d say evolution among payers. You look at a United for example, I mean, they’re the largest employer of providers in the US today. Most employers are self-insured. So these guys aren’t really underwriting risk in the same way as they used to. Look at the anthems and human as the world adding, services, businesses as well. Do you see payers though… The critique of them, obviously, I understand what you’re saying but can they be part of the solution going forward?

Glen Tullman:

Well, first of all, look payers are a big category. There are some very innovative payers who are very focused on the health of their populations. I’d call out folks like Florida Blue. One of the blues, which is great one. There’s midsize payers around the country that are really focused on their people. Then there’s other payers who are primarily focused on driving profitability. And the real question is, it’s a simple one, which is when United makes 6.6 billion of profit in a quarter. And you look at the number of denials of care that they’ve had both in individuals in the health systems. And you ask yourself, “Is that really a healthcare company? Are they really being the largest healthcare company? Are they improving care?”

Glen Tullman:

Just ask their members. And the answer is, they aren’t getting it done. Ask the purchasers of that, self-insured employers, are they happy? The answer is they aren’t. So I think you don’t need me to tell you that, ask the population, ask them how they think their care is. And increasingly people are calling for government solutions to privatize the whole thing. That’s how desperate we’ve got. I’m not a supporter of government solutions. I am a supporter of getting responsible companies to provide great care to the citizens of the United States. And that’s what we have to focus on.

Glen Tullman:

Charles, at the end of the day, I know we can do better. And what Transcarent care about, is about creating this new, different, and better health and care experience that puts all of us back in charge, but that’s aligned with the people who pay for care. And that’s large employers. That’s even the government because everybody is paying too much for low quality care.

Charles Rhyee:

So let’s jump into that now. I know that when we’ve talked before, the Transcarent model, and you’ve already touched on a couple of those. But really focused on five areas of health and care. And I think those, you’ve described it in the past. Everyday care, prescriptions, specialists at home, centers of excellence. Maybe walk us through a little bit how the trans care model works.

Glen Tullman:

Yeah. Well, you’ve done my job for me, but I’ll jump in and that it’s really simple. Like everything else in our life, you have two options. One, you can look at your phone and your phone recognizes you and it gives you five options as you’ve just described. If you don’t want to look at your phone, you can call a phone number. All this happens instantly. 24 by seven you’re in charge. We meet you where you are and you can get any number of services. The first one everyday care, I want to talk to a doctor, but I want to do it right now. 60 seconds, 24 hours a day, touch my screen. I’m texting with a doctor. I can ask her or ask him to go to full video if I want to. But more and more people are saying, they just want a text. They just want a quick answer. So that’s one.

Glen Tullman:

Two, I want to schedule with a local health system, schedule an appointment, schedule a full video visit, I can do that three. I want basic behavioral health kinds of resilience, coaching, or mild issues that I have. I can get all that through every day care. It’s all available. It’s instant. It’s on my phone, 24 hours a day. Second prescriptions, and that is we will search the market, provide you with the lowest cost prescriptions, send them to your home. Allow you to pick them up at a local pharmacy. We’ll also give you alternatives and we’ll check whether you’re taking medications that maybe weren’t discontinued that you don’t need to take anymore. So we’re constant focused on the world of pharmacy. Taking cost out, making prescriptions more accessible and available.

Glen Tullman:

Third is care at home. There’s a lot of care that’s provided at hospitals today like infusion care. We do 80% of our infusion care in hospitals. The rest of a world does 80% at home. So shifting the care at home for many services, not only reduces the cost, but it makes it easier. A lot of people can’t travel. My mom used to call people to give her a ride to the hospital because she could no longer drive. And that was, and she didn’t want to do that. And imagine if we offered her the ability to get all those services right in the comfort, safety, security of her own home. So that’s what we’re offering there, care at home.

Glen Tullman:

The fourth one is surgery, and we know that a third of all surgeries that are done don’t need to be done. So the first thing we want to say to everybody over and over again, before someone cuts open your body, get a second opinion. I’ll say it again. Before someone cuts, open your body get a second opinion. It’s almost seems second nature. And that is, of course you would get a second opinion. Somebody is going to operate on you for good mistakes. We make that free. We make it available to people and we insist on it. Get a second opinion. Once you do, then we’ll make it easy for you to get surgery from a high quality surgeon at a high quality facility.

Glen Tullman:

And last but not least complex care. When you’re dealing with things like cancer that we hope no one ever gets, but when you get it, you need to be dealing with experts. And once again, that doesn’t mean you can’t use your local doctor, but we want to make sure your local doctor is using all of the latest techniques. And it’s impossible for almost anyone to keep up with all the latest techniques. So again, we do the research. We do the backend that everybody should have. And traditionally, only wealthy people got. We make that available to everybody. So that’s that umbrella services. It’s all available 24 by seven on your phone. In most cases at no cost whatsoever.

Glen Tullman:

Now, from an employer standpoint, we go at full risk. So unlike the navigators, we don’t charge you up front, whether or not you use the service, we go at full risk. And unless we deliver a quality outcome, you don’t even pay for it. So again, it’s a wholly different model than anything that’s out there. Some of the current navigators you follow. Some of them they say, “Oh, we’re going at risk too.” But you and I know what’s happening. They’re charging somebody a million dollars and saying, “We’ll put $100,000 at risk.” That’s not going at risk. That’s just a discount. We’re going at full risk. No cost upfront, provide the services and at the back end demonstrate that we provided value. And if we can’t, we don’t get paid. That’s called going at risk. That’s called value based care.

Charles Rhyee:

I can see how that works. Clearly with surgeries complex cares because you’re negotiating directly to build a provider network. And then you obviously save the employer’s money and you capture some of that. How do you take risk when talking about prescriptions or everyday care?

Glen Tullman:

Well, prescriptions are really easy. We have a relationship that we announced with Walmart. We wanted to bring the everyday low pricing that they get from having 200 million customers a week. 200 million a week. We wanted to bring that buying power to everyone, but especially to self-insured employers. So let’s take insulin. The average self-insured employer pays about $200 a month. Walmart will provide it to us for about $70 a month. So you can do the math, $130 a month saved per employee who’s using insulin. So in that case, all we would do is we’d say, you just saved 130, but you waived the copay. So maybe you only save 100. And out of that 100, the employer keeps two thirds and we keep a third. Very easy in terms of measuring the impact.

Glen Tullman:

Now, if we couldn’t save any money, the good news is you haven’t paid anything. So it’s like having somebody who’s always there for you, looking over your shoulder, looking out for you, whispering in your ear, “Charles, you could get this less expensively next door. You could have this sent your house less expensively. Charles, you don’t need to be taking that med anymore.” So in all those cases, we’re providing that service.

Charles Rhyee:

Direct contracting isn’t a new concept. It’s been around for a while. What is it that Transcarent is doing that is a different take on this? How are you differentiating here in this area?

Glen Tullman:

Well, the first thing is that employers are not in the healthcare business. Employers are basically in the business of providing whether it’s a supermarket, whether it’s a manufacturer. So what we’re doing is we’re making it easy for their employees to stay healthy. And we’re essentially putting together all the pieces into common experience. Let me give you one simple example that everyone will understand. And that is, years ago for those of those listeners who were older, we all bought WordPerfect. And then we bought Lotus and we bought all these different programs and Microsoft came on and said, “Let make it easy. We’ll provide Microsoft office and we’ll provide all three at a lower cost than you could buy each of them separately. And it’ll all be integrated. It’ll be really easy.” And in many cases, it’ll come installed on your computer.

Glen Tullman:

And instantly 90% of the entire market shifted. It was easier. It was integrated. It came automatically and it was less expensive. So that’s what we’re doing in healthcare. You could buy a lot of these services. You could try to link them together. It would be messy. It would be hard. It would take a lot of time. Similarly, if you look at the iPhone, the iPhone didn’t say they’re going to do every service. What it said is they’re going to make it really easy to access those services. You don’t have to worry about security. You don’t have to worry about billing. You don’t have to worry about integration. All that’s handled and you go to one place.

Glen Tullman:

So I could use multiple devices. I could get multiple separate signups, or I could just buy them right through my iPhone. And that’s what most people do. People want an integrated, easy to use experience, and they want it to cost less. And that’s what we’re doing at Transcarent.

Charles Rhyee:

And to that extent maybe talk about the role of technology here and being able to achieve and deliver the service that you do. Is this achievable without technology?

Glen Tullman:

Well, I don’t think it is. Again, we’re leveraging as many other industries have done. We’re leveraging off the use of technology in terms of mobile, in terms of cloud, in terms of data science, in terms of AI, all of that is in the back end. And there’s this wonderful quote that says, “Technology perfectly applied is indistinguishable from magic.” Again, think about that. Technology perfectly applied is indistinguishable from magic. It just happens.

Glen Tullman:

So at Livongo, we would literally call people and we knew from monitoring their bodies, that their blood sugar was dangerously low. And people would say things like, “You called it the perfect time. Charles, how did to call me now?” This is, and it was almost embarrassing and say, “Well, our technology told us what was going on because we’re monitoring you 24 by seven to keep you safe.” And in a similar way, we’re using all that technology to say to people, we can take out all of that friction in the middle.

Glen Tullman:

Think about Uber. Before you had to wave, try to hail a taxi or call. Would try to find one. You wouldn’t know if they were coming. It was messy. And Uber used technology to allow you to talk directly to the driver. Now think about all the technology. It includes GPS and satellites and all kinds of things and organizing systems. But for you, you touch your phone and you cannot just have a car. You can have a van. You can have an SUV, anything you want in minutes. Think about Airbnb, connected you at the middle and it connected you directly to people who wanted to rent their properties. And it’s now the largest hotel corporation in the world. Larger than Hyatt, Hilton and Holiday in combined. Why? They eliminated the middle. They created a product that people loved or Spotify.

Glen Tullman:

Now, you can personalize your music, but not only personalize your music, they will actually suggest songs that you would like, and they get it right a lot. So all these services have used a combination of technology and data science to create an experience that we don’t just like, we love. We did that at Livongo. Our customers said, “Glen, you did it for chronic conditions. Can you do it for the rest of healthcare?” And that’s what Transcarent is all about.

Charles Rhyee:

You acquired Bright Health in 2020, obviously as part of building out Transcarent. That was a surgery management and COE business. What did they bring to you? And why did you start with surgery first?

Glen Tullman:

Yeah. I think you might have said Bright Health. It’s BridgeHealth.

Charles Rhyee:

Sorry. BridgeHealth. Yes. I apologize.

Glen Tullman:

No worries. I didn’t want to make news for-

Charles Rhyee:

Yeah. Exactly. I apologize. BridgeHealth.

Glen Tullman:

We’re going to have plenty of news without announcing that. So as we looked at it, one of the high cost items… You’ve got pharmacy is one high cost item, but one of the very high cost items is in fact surgeries. And I surveyed all the top providers. There were three or four. BridgeHealth at the time was the leading provider, both in terms of high quality, but also in terms of size and network. So I had the opportunity to buy the best and I did in Bridge. That said, all of these providers were subscale. They didn’t have enough surgery volume going through them because they were getting into the process too late. People already had talked to their doctors, seen a specialist and already had things scheduled.

Glen Tullman:

So they are part of the strategy but essentially you have to be there for the entirety of a health consumer’s needs. It can’t just be one piece of the equation, because you’ll never get enough volume to really make a difference.

Charles Rhyee:

Yeah. That makes sense. Hey, you touched on this, obviously what you’re offering to the market is fairly unique. It brings a lot of things together here that people can use. It has a lot of value, particularly to employers and to patients. So what does the competitive landscape look like for a company like Transcarent? Who are you finding yourself up against when you’re speaking with employers?

Glen Tullman:

Well, it’s very interesting. Charles, you remember that at Livongo, once we went public, there was a lot of confusion and people didn’t know. Are you a healthcare company? Are you a tech company? Are you a strip and meter company? Or are you a coaching company? No one completely understood that we had creating something new and very different than what was out there. And it was the combination was all the above. So in this market we have some people who want to compete but we have some of the folks who have a standalone app and they want to compete. We have some of the navigators and they want to compete, but no one has the full package put together in a way that works. And no one can actually do what we do.

Glen Tullman:

For example, if you want a surgery we actually contract for and pay for that surgery in advance, no payer would ever want to do that. When we pay in advance, we get great discounts number one, and number two, the surgeons and the hospitals and healthcare systems love us because there’s no collection issue. So theoretically, anyone could do that, but you need to be capitalized. You need to invest in creating bundles and getting all that worked out up front, and you need to build this massive infrastructure to do that. The payers could do that except they make a lot of money by not paying for surgeries and by delaying payments, as you’ve seen from some of the recent lawsuits.

Glen Tullman:

So we’ve rethought the process in very different ways. So I think there’s a lot of people who want to be competitors. One of the navigators recently started a presentation by saying we do everything that Transcarent does simply by saying that… It’s like when iPhones first came out and the other manufacturer said, “We do what the iPhone does.” And everybody just shook their head and said, “You aren’t even close to doing what the iPhone does. And if you did, you wouldn’t have to say that you do what the iPhone does. You’d just be doing it.”

Glen Tullman:

So I think that there’s there’s a number of folks out there, including navigators, including payers who are trying to do what we do. I think this is going to drive some acquisitions because they’re going to try to get into the same space that we’ve defined, but we’ve created this new category just as we did with Livongo that’s going to be very difficult for many, I need to compete with.

Charles Rhyee:

What about providers as competitors because the way you described Transcarent, it’s look, we’re going to self assure employers and we’re creating a service that obviously runs in parallel to what you’re doing and when accessed because we’re taking risk. You’ll get savings. We’re going to help guide your member to the better choices, lower cost choices, high quality choices. You have a lot of companies like, I’ll use a one medical, for example, where it’s trying to offer a lot of similar things. Easy access, high quality care, low they, they referring… But it’s coming from the provider standpoint. It’s a little bit less on the employer. So a lot of people trying to approach this. Is someone like that a competitor to you? Or is that complimentary to you?

Glen Tullman:

Yeah. We see all the providers as complimentary. We aren’t going to be, “United Healthcare is firing providers and wants to compete.” We don’t. We want to partner with them. So from our standpoint, again, we are very specifically partnering with a lot of those different groups and you’ll see some announcements coming out where we say, “We think they ought to be the front end of the process,” and we want to make it easier to get to them. We want to tell you who’s available for what treatments. And we want to judge where the high quality providers are in organizations like One Medical are great. They’ve added quality. They’ve made the process easier. And again, why does one medical exist? They exist because everybody said, “The process is so broken. We need something new and different.” And that’s why one medical was created. And they’re a great organization and great provider.

Charles Rhyee:

Yeah. Okay. That’s really helpful. When you speak in partnerships that you’re looking, I think a big one you’ve announced recently is Walmart. Maybe talk a little bit about how that partnership you think will work and play out here and what does this say about where the market’s going?

Glen Tullman:

Well, I think, and I’ve said this before that big customer is important and big customer is Walmart and Amazon. So we’re looking forward to both of them being very active in improving the healthcare experience because both those organizations know how to please customers. That’s why they have huge customer bases. And Walmart has indicated under the leadership of Cheryl Pegus, that they’re going to be a big player in healthcare. So we’re pleased to be partnered with their go to market partner for large employers. And as a part of that, as I mentioned earlier, we’re getting to take advantage of their everyday low pricing in purchasing medications.

Glen Tullman:

So we’re happy to pass that through to our existing members and say, “Hey. Look, here’s the pricing from Walmart on the same medication you’re paying $50 for, they’ll sell it to you for $30. If you want it sent to your house, we can do that. Or if you’re going to be at Walmart, you can pick it up right there.” So we’re just, again, giving more options to more people to get high quality care at lower cost. And we’re very aligned with Walmart, that’s their vision as well.

Charles Rhyee:

Yeah. So maybe looking out into the future a little bit as we talked about, we have a broken system, but we already have this infrastructure built that’s supporting this current system. And within that you’ve had a lot of, you talk about Livongo, for example a lot of point solutions coming to market to help try to make things better. What do you think the outlook then is for the market as we think about, let’s say digital health more broadly over the next five to 10 years? What do you think is going to happen?

Glen Tullman:

Well, first of all, you’re going to see this market redefined in the next few years. If you look at what happened to PBM five years ago, there were three massive players. Express Scripts, CVS Caremark, and OptumRx, which was created through the acquisition of Catamaran. And today five years later, look what’s happened. Express was acquired by Cigna. You had CVS Caremark is now part of Aetna and last but not least OptumRx is seemingly becoming less of a front and centered play. A lot of their talent isl left but look at what’s happened on the other side of the market. GoodRx worth seven or 8 billion. Row worth five to 6 billion dollars. Capsule, I mean, for God’s sakes Mark Cuban is forming a PBM. You have enormous innovation there and all of it is focused on how do we change the experience of acquiring your meds cost effectively for a consumer?

Glen Tullman:

So we’ve seen that rapid change all in a few years, we’re going to see similar change in the payer space because payers are not adding the value. Think about on one side of the equation, it’s all of us health consumers. On the other side, it’s the providers of care. In the middle, you’ve got the payers. Well, where’s all the friction? It’s in the middle. Where’s all the cost? It’s in the middle. Where’s all the denials of care? It’s in the middle. Where are all the copays? And co-insurance in the middle. Imagine if you eliminate the middle and go direct as we’ve done in every other major industry. If you did, you’d improve quality, you’ve improved care and you’ve reduced cost. And again, that’s what we’re focused on that model at Transcarent.

Charles Rhyee:

So then speaking of payers and as we’re closing out here, what role do you see them filling then? Because United Health, I’m just looking it up, it’s a 480 billion company. It’s obviously one of the largest employers in the US. It’s touches a lot of places both insurance and services and PBM, as we talked about. Where do the payers fit in the future? What do they need to evolve into, you think?

Glen Tullman:

Well, first of all, you remember this enormous company dominant player called IBM, you remember the famous statement, what’s good for GM is good for the United States. Those companies were enormous, but they didn’t follow the market. They didn’t serve consumers as well as they should have. And they were replaced by other companies and that’s the process here. I’m not saying they’re going to go away. But what I am saying is that the payers who succeed will become very consumer focused. They will actually focus on health and not just profits. And they will figure out ways to deliver higher at lower cost. And right now that’s not what many are doing, but there are some innovative ones and they will lead the way. So we’re going to have to see what they look like in the future. And like every other industry they will either change or die. So that’s that’s what but it’s going to happen very quickly.

Charles Rhyee:

So maybe then just to close out here, let’s just go back to Transcarent. Where do you see trans care focusing next given the rapid growth that you’ve seen so far?

Glen Tullman:

Well, again, we’re a very small startup and we’re growing very rapidly. I’ve said before that what took three years at Livongo will take a year at Transcarent. So we’re seeing rapid growth. There’s very strong interest in what we’re doing and now it’s about execution. So we’ll continue to execute on this model of creating this new, different and better health and care experience and putting health consumers, back in charge of their care. And I would suggest to you that there’s almost nobody out there who doesn’t want to be in charge of their care. Who doesn’t want the information to make better decisions. Who doesn’t want to know what all their options are. And we all know, and we’ve looked at this for years and we’ve said, it’s unbelievable that if you wanted to know the best place to get your hip repaired, you really have no good way to do that in terms of accessing with quality information.

Glen Tullman:

If you wanted to know where the most cost effective place to go, you really have no way to do that. And we’re changing all that. And it’s a big undertaking. There’s no question about it. Someone said, “Well, it sounds like you’re trying to boil the ocean.” I don’t know if we’re boil the ocean but this is a big challenge and you can’t do it halfway. You’re either all in. And I’ve said to many people, we’ll spend a billion dollars to get to where we need to get to, but I believe that healthcare has to go there and will leave the way in transforming the healthcare experience and do a consumer health and care experience.

Charles Rhyee:

Well, I think we’re all looking forward to that and seeing how things and seeing progress us. So I think that’s a great place to end it. Glen, great speaking with you today. Always great to speak with you and really appreciate you joining us.

Glen Tullman:

Well, thank you. It’s great to speak with you. I really appreciate all the research and the questions and the chance to tell the Transcarent story. So thank you very much.

Charles Rhyee:

Great. Thank you. And then thank you everyone for joining us today and look forward to having you join us on future podcasts.

Speaker 1:

Thanks for joining us. Stay tuned for the next episode of Cowen Insights.


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