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Transcarent looks to overhaul self-insured market

Transcarent is offering at-risk contracts to share in employer savings.

Susan Morse, Managing Editor

Transcarent CEO Glen Tullman (Photo courtesy Transcarent)Transcarent CEO Glen Tullman (Photo courtesy Transcarent)

Livongo founder Glen Tullman is the new CEO of Transcarent, a company that is looking to overhaul the employer-self-insured business by creating a digital platform "overlay" to existing plans.

Tullman isn't looking to replace traditional insurance – though he doesn't rule that out for the future – but to offer a new way to navigate members to high-quality, low-cost care, even if that means flying them to the best and least expensive facility.

All of this comes with no premiums, copays or bills for the patient. Transcarent also isn't charging employers for upfront costs. There is no per-member, per-month fee.

Transcarent is entering into risk-based contracts in which it takes a pre-negotiated percentage cut of an employer's healthcare cost savings after the fact.

Finding less expensive sites of care is not dependent upon the Centers for Medicare and Medicaid Services' price transparency rule, because there is so much variation in how the services are listed that it is an unreliable predictor, according to Tullman.

Also, a Health Affairs study recently found that most large hospitals are noncompliant with the rule.

Instead, Transcarent relies on its own findings for saving money through researching sites of care.


The best method to save money is to avoid the hospital by expanding on telehealth, a trend already embraced by consumers during the COVID-19 pandemic.

Now telehealth is going to scale, as seen this week in Amazon's announcement of expanded Amazon Care app-based telehealth services. 

The pandemic has shown that "you could deliver most care using digital technology," Tullman said. "That was a wake-up call."

Transcarent is offering a chat option, since consumers prefer it to video, Tullman said. 

"More people want to do chat," Tullman said. "Chat has a record of what they told you."

Currently, providers are reimbursed at parity for a telehealth visit versus an in-person visit, but long-term policy is still being worked out for what telehealth visits will pay after the public health emergency ends.

Tullman believes that providers will continue to use telehealth, even if they are being paid at lower reimbursement rates, and that usage will be around 35-40%.

Even if a health plan doesn't offer the benefit, Transcarent members can bypass their insurer and get a telehealth visit for about $45 out-of-pocket, and may feel it's worth it not to deal with the plan, he said.

Also, if a member calls back in a few days because he or she is still ill, there is no new charge.

"Illnesses last longer than a day. We'll give you seven days coverage," he said.

The reimbursement issue aside, telehealth is something consumers really want, he said.

"I think we're going to figure out the payment aspects," Tullman said.


Future growth for Transcarent may include large government agencies or unions.

"Response is off the charts," Tullman said.

The company is expected to announce a number of new partnerships in May.

"Hospitals systems and doctors are so tired of being beaten up and stretched out by the payers," Tullman said. 

Transcarent, he said, pays for surgeries in advance.

Economically, the country cannot absorb the increasing costs of healthcare, and the average person remains confused over a costly system.

"We simply haven't solved the problem," Tullman said, and believes that the reason the health insurance system doesn't work to save money is that companies are not in the business of cutting their revenue. Transcarent aims to do things differently through a blend of digital Silicon Valley-to-consumer experience.

This concept has been heard before, most recently by the failed Haven, the company formed by Amazon, Berkshire Hathaway and JPMorgan Chase.

But Amazon didn't put its tail between its legs, Tullman said, but instead made the announcement that it would provide telehealth to everyone.


Transcarent was formed in 2019, but the announcement this week of Tullman as CEO and executive chairman has been its very public unveiling. 

In 2020, Transcarent merged with Denver-based BridgeHealth to offer self-insured employers pre-negotiated rates for 300 different types of surgeries. 

Tullman is a former CEO of EHR company Allscripts, who then partnered with General Catalyst managing partner Hemant Taneja. General Catalyst became the lead investor in Livongo, which in August 2020 was acquired by Teladoc for $18.5 billion.

Transcarent closed a $40 million Series A round in October 2020, led by Taneja and Lee Shapiro, managing partner of 7wire Ventures (where Tullman is a founder and managing partner), according to Forbes.

Transcarent's leadership team is a roster of alums from healthcare and technology companies, including Aetna, Cigna, Optum, Signify Health, Haven, athenahealth and Glassdoor. 
Twitter: @SusanJMorse
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The onset of the COVID-19 crisis a year ago, with its widespread quarantines and lockdowns, offered telemedicine its moment to shine after years of under-fulfilled promise. As states look toward a post-pandemic world it's time to build on that promise.