Latest / StartUp Health NOW Podcast / Financial Incentives to Close the Gap in Healthcare Utilization: Reciprocity Health’s TheraPay

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Financial Incentives to Close the Gap in Healthcare Utilization: Reciprocity Health’s TheraPay · StartUp Health NOW Podcast

• 0:00
  Welcome back to StartUp Health NOW, the podcast where we celebrate the entrepreneurs and the innovators who are transforming health. I'm your host, Logan Plaster.
• 0:08
  [gentle music] There are many aspects of the healthcare system here in the US and around the world where there are gaps in access.
• 0:15
  It sort of goes without saying these days that there are healthcare deserts where it's next to impossible to see a specialist.
• 0:22
  I heard recently that a third of the counties in the US don't have access even to maternity care. So access is a huge problem, full stop.
• 0:30
  But there's another gap in healthcare that we have to address as well, which is the fact that even in places where care is available, sometimes people don't use it.
• 0:38
  A great example would be someone with a diagnosis of Type 2 diabetes whose care is covered by Medicaid.
• 0:44
  There are programs that can help that individual to keep their A1C in a healthy range, but if they opt out, their condition will get worse and worse until they end up in the ER or worse.
• 0:55
  So how can payers and insurers encourage people to take part in the programs that will keep them healthy? And by the way, programs that will save a lot of money through avoided ER visits and hospitalizations.
• 1:07
  That's the topic of today's conversation with Matt Swanson, CEO and founder of Reciprocity Health, a company in the StartUp Health community.
• 1:15
  With their platform Therpay, they appear to be cracking the code on how to use financial incentives to get people to take healthy actions.
• 1:23
  In other words, if you do it right, you could actually pay people real money to engage with the healthcare system because in the end, it will save the system way more money by avoiding unnecessary hospitalizations, et cetera.
• 1:36
  The trick is how you structure the program, and we'll hear all about how they do that in this conversation, which was recorded at HLTH in Las Vegas.
• 1:45
  [upbeat music] Okay, so Reciprocity Health, you're doing really interesting work in incentivizing healthy behaviors through finances. Sort of break it down for me. So we've really found that there's a gap in the market.
• 2:00
  We, we came to market with the idea of building financial incentive programs that addressed a struggle that payers and health systems have, especially in Medicaid, low-income populations being offered excellent care, but not choosing to adopt and take part in that care journey.
• 2:18
  So we basically build a financial incentives overlay on top of any clinical care journey that draws people towards their care, drives adoption higher, and then when you breadcrumb the incentives across the entire journey, whether it's three weeks or nine months, um, you actually see a, a big jump in adherence as well.
• 2:36
  I mean, just to simplify it and, you know, make it personal, there's a lot of things that I know I should do, and I don't do, uh, for whatever reason. Right. And so w- how much does it take?
• 2:46
  What, what do the financial incentives look like? What does it take to get somebody on a n- a new care plan, adopting new behaviors? It's hard.
• 2:55
  It, it is, and there's no one simple answer, which is why we have a, a full-blown team, behavioral economics team, in the company.
• 3:03
  And so when you're given a new, uh, care journey, there are gonna be l- different levels of effort associated with that.
• 3:09
  There are gonna be different populations that you're reaching out to, and, and sometimes there's stigma attached to a particular condition.
• 3:15
  So there are all sorts of barriers, but when you start thinking about the universal barriers, mistrust of the, of the medical system, uh, overwhelm or confusion about what you need to do next, uh, really a intimidation sometimes of a massive care journey like diabetes management, something like that.
• 3:33
  So those are usually the fundamental underpinnings of someone being hesitant to take on that care, and we have, uh, a starting point with a set of, uh, criteria around the ROI that our client is seeking.
• 3:50
  That sort of gives us a budget to work with, and then the behav- A- and who's a typical client? So Medicaid MCOs are our core client right now, but we work with FQHCs, um, and bigger health systems as well.
• 4:02
  So we- Federally qualified health centers? Federally qualified health centers, exactly, which are, are systems of clinics that are serving that low-income population, typically Medicaid, uh, based as well.
• 4:14
  And so we'll, we'll take that huge mix of how long is the curriculum, how complex and intimidating is that curriculum, what is the budget that we have for incentives, and then we build an ROI model around that to show the client that if we can boost adoption and adherence by 10 or 20%, even though they're paying us to do the work, even though they're now paying rewards on top of that, the payoff for that in avoiding hospitalization, avoiding other costs, is a, a multiple of that.
• 4:43
  Got it. Okay. Uh, and what do the rewards look like? Is it like a dollar here, a dollar there? Is it Amazon gift cards? What does it look like?
• 4:50
  Now, a really important aspect of what we do is that each member gets a personalized reloadable debit card. Got it. And so that is, uh, really important for a couple of, uh, of reasons.
• 5:01
  Number one, it allows us to breadcrumb an entire journey where you're getting $10 and $20 loaded onto that card, sometimes immediately when someone completes a task, and that is a persistent touchpoint where we can stay involved with that person.
• 5:16
  They can always be reminded in their wallet, wow, I wonder if there's more I can earn. Okay. Um, and they, they can just go check their app and see what new rewards are available, and then there's a balance on that card.
• 5:26
  So they can check their app and see, oh, I've got $200 on this card. What do I wanna do with it?
• 5:31
  And then we do a lot of programming about where they spend that money that can start to address some of their social determinants of health. Is that highly directive, or what kinds of places can they spend it?
• 5:41
  Is it, is it...extremely useful to them, or do they have to shop at Walmart or Amazon? Uh, from a behavioral economics standpoint, you want to get as close to the freedom of spending cash as you can. That makes sense.
• 5:52
  That's what really drives the behavior change. But of course, we put guardrails on it. So, uh, we can modify that to the client, but typically we'll do, uh, firearms, tobacco, casinos, alcohol, uh, the card won't work.
• 6:04
  Okay. Uh, sometimes we have clients who wanna get more directed than that and have the card only, uh, available for healthy food, for example, that sort of thing.
• 6:11
  So we can really modify that for every, uh, specific program.
• 6:15
  Now, it seems to me people have been doing behavior modification incentives for a long time, but the difference here is you said a minute ago that you have te- a team of behavioral economic- economists. Yep.
• 6:26
  So it's just a smarter application of that idea. Is that right? So the design, uh, is important. So we've built a platform that has flexibility on two different ends. Number one, we are clinically agnostic.
• 6:39
  It could be a maternal health program, diabetes program, a hospital discharge program.
• 6:43
  So what you get there is you, you need a platform that's flexible enough to go out and create that financial incentives overlay on anything. So the platform there and what it can do is second to none.
• 6:54
  Then the complexity on the other side allows that behavioral economics team to use the full tool chest, um, of reward design. Reward levels matter, but the design and the framing of it matters as well.
• 7:06
  So we can really cook up the best way to move the needle on engagement, knowing what are the harder steps in a program and how to really motivate people.
• 7:15
  And then from there, you really need the full orchestra of a digital app, making clear what are the steps in the roadmap, uh, what are the rewards for those steps.
• 7:24
  You need an omni-channel platform that is doing the messaging, reminding, nudging, and encouragement.
• 7:28
  And then you also need tools within the app that help people earn rewards immediately, like taking an SDOH survey or setting up a lab screen.
• 7:36
  And that, with that immediacy of a reward, you build a lot of trust and confidence in the program overall. Okay. So, uh, I think last year when I interviewed you, you, you, you'd completed a round.
• 7:46
  You raised a few million bucks. Yep. Allowed you to move to the next sort of phase of development. That's right. What are the next milestones you're looking for? We've been really building the team out.
• 7:54
  So we got ch- chief, uh, growth officer who just joined, uh, two more technology people added to the behavioral economics team, really allowing the team to scale. So that's been really exciting.
• 8:04
  A lot of really great talent brought into the company, and that really opens your eyes to the possibilities of different directions we can go. So we're now moving into, uh, health systems, uh, Medicare.
• 8:15
  We just, we're launching a new D-SNP program. So it really is allowing us to feel out these different opportunities and, and areas for growth. And so 2025 for us is gonna be a massive growth year. I love it. I...
• 8:27
  What you're doing is so smart. It's complex enough that it creates a, a moat, [laughs] which I think is so, so smart. And you're actually helping folks pay for things.
• 8:38
  I mean, at the end of the day, this is actually gonna help somebody maybe afford a vacation at the end of the year that they weren't able to do.
• 8:44
  Yeah, I mean, we've got Medicaid families that are earning seven, $800 across, uh, the kids, the spouse, and all that. That's really meaningful income for them. Wow.
• 8:52
  And we, we have, uh, certain families with custodians who-- where their, their kids have a card assigned to them, not the parent, and we have those parents calling in and saying, "You know what?
• 9:03
  This is their goal for the year is to earn enough money so that they can buy that one thing they really wanted."
• 9:08
  So you start to hear these stories about how meaningful it is that people are earning these rewards, and it's just wonderful to see that we're putting money in their pockets, but at the same time, we're getting them a lot healthier.
• 9:17
  I love it, Matt. Thanks for taking this little walk with me. Absolutely. Explaining me what you're working on. Great to see you. [upbeat music] Thanks for listening to Starter Health Now.
• 9:27
  We'll be back again with another episode next week. [upbeat music]