Gravie’s plan incentivizes smart choices.

in the comfort zone

Gravie creates a plan that incentivizes smart choices.

Ahealth plan that incentivizes employees to use health care services wisely can lower costs for employers and workers alike. Everybody agrees with that basic idea, but a Minneapolis-based insurance company is showing how it actually works. Gravie, founded by serial health care entrepreneurs Abir Sen and Marek Ciolko, offers a health plan called Comfort that covers most common health care services at 100%.

“Not just preventive care, but office visits, specialist visits, urgent care visits, generic drugs, labs, imaging, X-ray, blood work—all of those things are covered services for free, with no cost-sharing under Comfort,” says Ben Simmons, Gravie’s chief strategy officer. “It gives a lot more value to everybody on Day One, so people don’t feel like they’re getting nickel and dimed from copays and deductibles.”

The health plan, which launched in 2018, seeks to help employers grapple with the ever-increasing challenge of health benefits. According to the most recent Employer Health Benefits Survey conducted by Kaiser Family Foundation, the average annual premium for employer-sponsored health insurance in 2021 was $7,739 for single coverage and $22,221 for family coverage.

Premiums increased 4% over the previous year, although inflation increased just 1.9%. Because most people do not reach their annual deductible, they see little value from a benefit that costs so much, says Libby Johnson, Gravie’s marketing director.

“Most traditional plans are actually only serving something like 10% or less of the employees who are on the plan,” she says. “So a whole bunch of people are paying a lot of money but only 10% are getting value.”

In the Comfort plan design, the deductible concept is replaced with an out-of-pocket maximum. While doctor visits and other routine care are covered in full, employees must pay for hospital care, procedures, and surgery, up to an out-of-pocket maximum. Most of Gravie’s clients offer their employees three out-ofpocket maximum options, corresponding to varying premium levels.

“Depending on the client, we have a range of options all the way from $500 out-of-pocket maximum per person on the rich end to $7,900,” Simmons says.

The plan design encourages employees to use services wisely. An urgent care visit is free; a trip to the emergency room carries a $250 copay. Generic drugs are free; brand-name prescriptions have a $75 copay. Specialty prescriptions carry a $125 copay until the out-of-pocket maximum is reached.

An employee with a bad cough, for example, is incentivized to get treated at an urgent care clinic for free, instead of waiting until pneumonia develops, requiring an emergency room visit and hospital admission.

“By encouraging people to get care for free, we are actually saving the plan money because they’re not

“By encouraging people to get care for free, we are actually saving the plan money because they’re not getting more expensive types of care.”

−BEN SIMMONS

BY LOLA BUTCHER // PORTRAITS BY WARREN TEBRUGGE PHOTOGRAPHY

getting more expensive types of care,” Simmons says, citing one customer that saw emergency room use drop by 80% after moving to Comfort. “Even though they were paying a little bit more on urgent care, they saved so much money on emergency room visits that the plan saved money.” Meanwhile, most covered employees experience lower outof-pocket costs.

“On average, employees save over $100 per month when they’re on a Comfort plan versus a traditional plan design because Comfort provides more comprehensive coverage,” he says. “Being able to do that at a more competitive premium price point makes the financials really work for both the employer and the employee. That’s a dynamic that we’re proud of.”

“A whole bunch of people are paying a lot of money but only 10% are getting value.”

−LIBBY JOHNSON

HOW WE GOT HERE

Gravie is one of several health care companies that Sen and Ciolko have launched to innovate in the complicated health benefits space. In 1998, Sen co-founded Definity Health, which offered a high-deductible plan with a medical savings account; UnitedHealth Group bought the company in 2004.

Two years later, Sen co-founded RedBrick Health, a digital health and engagement company that merged with Virgin Pulse in 2018. Along the way, Sen and Ciolko co-founded Bloom Health, a private exchange for health insurance, which was sold to Empyrean Benefit Solutions Inc. in 2016.

In a 2020 interview with Thrive Global, Sen says none of the companies he has founded ended up with the same business model envisioned when the company launched. “The business model is not what makes the company,” he says. “Rather, it’s thoughtful, resourceful people that are determined to solve problems for an industry.”

Gravie continued that pattern. Started in 2013 shortly after the Affordable Care Act passed, the company launched as a marketplace of fully insured individual-market health plans. Employers made a defined contribution to their workers, who used the marketplace to choose the plan that best suited their needs.

That concept lost its luster when carriers started pulling out of some markets and premiums rose dramatically.

“We quickly realized that if the product set did not have the innovation and the price point that we were looking for, we weren’t going to be able to deliver on the experience that we wanted,” Simmons says. “That was the impetus for us to start our own insurance company and become our own health plan.”

HOW IT WORKS

Depending on the market, Gravie partners with a regional insurer—for example, PreferredOne in Minneapolis—or a national company like Aetna or Cigna to gain access to a provider network for employees covered by Comfort.

Comfort’s “sweet spot” is employers with between 50 and 500 employees. Gravie’s customers, on average, save 19% on premiums when they switch to Comfort, Simmons says. He attributes that to the plan design that incentivizes use of lower cost services, as well as the company’s underwriting approach.

“We invested in a lot of analytics to help us give credit where credit is due for employers that have good risk profiles,” he says. “That allows us to get more competitive because we can more precisely assess employers’ risk than some carriers do.”

Because workers perceive Comfort’s plan design to be of more value than traditional plans, employers typically see more workers opt into the insurance program.

“They want more people to participate in the health plan, and that also stabilizes the risk pool,” Simmons says. “So Comfort is a tool for employers to make their employees happy and to stand out in the workforce.”

Employers can add an additional benefit for their workers through Gravie Pay, which allows out-of-pocket bills to be paid over time with no interest.

“Oftentimes, having a health event where they have some liability can be a real financial hardship because people just don’t have the reserves to be able to pay,” he says.

Gravie Pay allows Comfort members to create a payback schedule, and payments to providers are made via payroll deduction. Paytient serves as the technology partner and credit source for Gravie Pay. 

survey says ...

85

PERCENTAGE OF WORKERS WITH EMPLOYERSPONSORED COVERAGE WITH A GENERAL ANNUAL DEDUCTIBLE

$2,379

THE AVERAGE DEDUCTIBLE FOR COVERED WORKERS IN FIRMS WITH 199 OR FEWER EMPLOYEES.

For those in larger firms, the average deductible was $1,397.

Over the past five years, the percentage of covered workers with an annual deductible of at least $2,000 for single coverage has grown from 23% to 29%.

Most covered workers have COPAYMENTS for doctor visits.

On average, they pay $25 for primary care and $42 for specialty care.

SOME WORKERS HAVE COINSURANCE INSTEAD, PAYING 19%, ON AVERAGE, FOR PRIMARY CARE VISITS AND 20% FOR SPECIALTY CARE.

BY LOLA BUTCHER

PORTRAIT BY CHRISTOPHER C. LEE PHOTOGRAPHY & FILM

changing minds

Prairie Health aims to make mental health care accessible and affordable.

Benson Kung recalls being an energetic, goal-directed teenager before stumbling into the quicksand of depression. “I remember trying to wash some dishes one day, and I just couldn’t,” he wrote in an account of his journey. “It sounds ridiculous, but whenever I would try to wash the dishes, some compulsion would come over me, and before I knew it, the day ended, and the dishes were still dirty.”

He was lucky to find the right psychiatrist, diagnosis, and treatment. But reflecting on his own experience and that of others, he found the process of doing so can be demoralizing: “You have to overcome the stigma that prevents people, especially people of color, from seeking care. You have to find a clinic that can take new patients. You have to act as a middleman between your insurance and the clinic. You have to wait weeks and weeks to see a provider. And even when you start seeing a psychiatrist, it’s likely that you will end your treatment prematurely.”

That’s why he was eager to join a Stanford University classmate, Maurice Chiang, and start Prairie Health, a telehealth platform delivering personalized, data-driven mental health care.

Prairie Health’s MindVitals product allows physicians, insurers, employers, and other organizations to conduct technology-enabled behavioral health screenings and connect individuals to the appropriate resources. The company’s Prairie Ecosystem is a network of wellness, therapy and psychiatric resources that can access technology and data to help individuals find the right treatment.

“Our goal at Prairie is to apply data to improve outcomes through improved access and efficacy of care,” Chiang, the company’s CEO, said.

COUNTING THE COSTS

Although Prairie Health will not start working with employers until early 2022, Chiang knows many companies are worried about the personal, professional, and financial costs associated with workers’ mental health problems.

Employees experiencing mental distress use nearly $3,000 more in health care services per year, on average, than their peers, according to research published by the National Safety Council and NORC at the University of Chicago in May 2021.

Beyond that, presenteeism, absenteeism, and staff turnover pile on the costs that employers bear. The cost of workdays lost averages $4,783 per year per employee, according to the analysis. And the cost associated with turnover averages $5,733 per year per employee.

The toll on employees goes far beyond the financial costs. Workers who have experienced mental distress in the past year are more likely to report that they drove while under the influence of alcohol, marijuana, or other drugs, the researchers found. Mentally distressed workers are 3.5 times more likely to have substance use disorders.

Prairie Health provides treatment right from your phone, from highly-trained providers who care. ADDED URGENCY

The NSC/NORC findings come from combining research on employment costs with data from the 2015 to 2019 National Surveys on Drug Use and Health, a large government-sponsored survey. Thus, the report does not include the impact of COVID-19, which made the situation worse.

In a survey of 1,500 adults conducted in mid-2021, three-quarters of full-time U.S. workers reported experiencing at least one symptom of a mental health condition in the past year, up from 59% in 2019.

“In 2020, mental health support went from a nice-to-have to a true business imperative,” Kelly Greenwood, CEO of Mind Share Partners, a nonprofit that focuses on workplace mental health, and a colleague wrote in Harvard Business Review.

Chiang and Kung both studied computer science at Stanford, where Chiang combined his interest in entrepreneurship with his concern about the mental health treatment landscape in America. “I’ve seen how the difficulty of accessing care and receiving ineffective care can impact people’s lives,” he said.

He and Kung, Prairie Health’s head of research and development, believe that individuals often suffer through misdiagnoses and ineffective treatment plans for two reasons: They have not connected with the most effective health care provider for their individual situation, or the health care professional does not have enough data about the individual to make an accurate diagnosis and create a successful treatment plan.

“So we teamed up and got started formally early last year,” Chiang said. “Since then, we have been building solutions for providers, health plans, and consumers to align incentives around improving the quality and access to care.”

The health care professionals who use Prairie Health’s platform have access to data, such as genetic-testing results and population-level insights, driven by artificial intelligence, which allow them to help individuals find the right treatment more quickly than the trialand-error approach typical in mental health treatment.

“There’s an incredible demand for innetwork, high-quality psychiatry and therapy today,” Chiang said. “And we can help both with identifying people who need help, which I think is a big challenge, and then we can follow up by getting those people in with a personalized care coordinator and our data-driven tools to in-network care for them.” 