Latest / Becker’s Payer Issues Podcast / Jeff Yuan, Co-founder of Mending

Transcript

Jeff Yuan, Co-founder of Mending · Becker’s Payer Issues Podcast

• 0:00
  Hello, everyone. This is Jacob Emerson with the
• 0:02
  Becker's Payer Issues podcast.
• 0:04
  Thrilled today to be joined by Jeff Yuan,
• 0:06
  who is the cofounder of Mending. Jeff, thanks
• 0:09
  so much for taking the time to be
• 0:10
  with me on the podcast today. Jacob, great
• 0:12
  to be here. Big fan of the podcast.
• 0:14
  Thanks for having me. Thanks a lot, Jeff.
• 0:15
  Appreciate you taking the time to be here
• 0:17
  with me. So, Jeff, before we dive into
• 0:19
  everything we wanna talk with you about, can
• 0:21
  you tell us a little bit more about
• 0:23
  yourself, your background in health care, or career
• 0:26
  in general, and then what it is you're
• 0:28
  doing today at Mending.
• 0:30
  Yeah. Absolutely.
• 0:31
  So I've been in health care for the
• 0:33
  last twenty years, my career.
• 0:36
  Early days, I was actually more in academia.
• 0:38
  So I started off my career doing a
• 0:40
  lot of laboratory research, translational research, specifically in
• 0:43
  the IBD and Crohn's space.
• 0:45
  Like a lot of folks just trying to
• 0:47
  figure out kind of my career, I think
• 0:49
  early days I also made a pretty hard
• 0:50
  pivot and left academia,
• 0:52
  enjoyed a consulting firm called the Advisory Board
• 0:55
  Company,
• 0:56
  which I credit to really be
• 0:58
  my education introduction to US Healthcare Economics. So
• 1:01
  a lot of my clients were large payers
• 1:03
  in hospital systems. We worked on the physician
• 1:05
  enterprise and really under stood that relationship,
• 1:09
  and then really, frankly, fell in love with
• 1:11
  startups, specifically health technology startups.
• 1:14
  I had a great stint at Zocdoc
• 1:16
  helping it run its enterprise business,
• 1:18
  doing a lot of patient access work and
• 1:20
  with hospital systems and online physician scheduling.
• 1:23
  And then, joined another startup called Charles Park
• 1:26
  now today called Formation Bio,
• 1:28
  who's a full stack pharma company. And that's
• 1:30
  actually where I met my cofounder Frank. He
• 1:32
  was the first employee, first engineer.
• 1:35
  And,
• 1:36
  together we ended up leaving and starting Mending,
• 1:39
  just a few years ago. So
• 1:41
  for those of you,
• 1:43
  who don't know, Mending, we were formerly called
• 1:45
  Terra Health. We are an AI native health
• 1:47
  insurance company.
• 1:48
  So today we have three customers.
• 1:51
  We sell our health insurance products directly on
• 1:54
  the ACA marketplace, so on and off exchange
• 1:56
  products on healthcare.gov.
• 1:58
  We work with a lot of small groups,
• 2:00
  small businesses who can buy fully insured products,
• 2:03
  and we also sell in the ICRA space
• 2:05
  for those employers who
• 2:07
  give money to their employers to buy their
• 2:09
  own health insurance. A lot of employees will
• 2:11
  pick us directly.
• 2:13
  And so one of our core beliefs as
• 2:15
  a health insurance company is that payers should
• 2:17
  actually build technology to help providers' lives. And
• 2:20
  so
• 2:21
  a lot of how we got our start
• 2:22
  is figuring out how can we make the
• 2:25
  piping between payers and providers much more smoothly,
• 2:28
  try to get more providers outside of the
• 2:30
  business of practicing insurance and more into the
• 2:32
  business of practicing medicine.
• 2:34
  Fantastic. So really interesting background, and I appreciate
• 2:37
  that overview of of the rebrand from Tero
• 2:40
  Health to Mending.
• 2:42
  I I honestly think we could do an
• 2:43
  entire podcast just talking about ICRA alone. But
• 2:46
  Yeah.
• 2:47
  You know, before before we do dive into,
• 2:50
  Mending specifically and and what you all do,
• 2:52
  talk to us about the rebrand. You you
• 2:54
  announced that very recently.
• 2:56
  What is why? What what's behind this? What
• 2:58
  does this shift represent in terms of the
• 3:00
  company's evolving identity and and and strategy?
• 3:04
  Yeah. Absolutely. So we were TerraHealth for four
• 3:07
  years. We've recently rebranded to Mending as you
• 3:09
  pointed out.
• 3:10
  And,
• 3:11
  you know,
• 3:12
  transparently,
• 3:13
  we always felt like a rebrand was something
• 3:15
  that would happen later down in the future.
• 3:18
  The early,
• 3:19
  the early story of how we got to
• 3:21
  TeroHealth is not glorious like a lot of
• 3:23
  early startups. It it was me and Frank,
• 3:25
  just the two of us in a room
• 3:26
  sitting on his couch saying, oh, at some
• 3:28
  point we need to name this company.
• 3:30
  And literally we're finding, you know, cheap domain
• 3:32
  names,
• 3:33
  things that can just get us started. We
• 3:34
  always knew branding as a, you know, mattered
• 3:37
  as a company, but it was good enough
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  to get started. And we really liked the
• 3:41
  name. It it kind of spoke to us
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  in terms of Taro being a root vegetable
• 3:45
  and trying to get in fixing kind of
• 3:46
  the root of health care.
• 3:48
  You know, as we've evolved in the last
• 3:50
  couple years now that we're in market, we've
• 3:51
  been growing really quickly. We work with lots
• 3:54
  of different doctors and patients in the market.
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  We felt like Mending more uniquely captured our
• 3:57
  mission and our momentum. And as I stated
• 3:58
  earlier,
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  mission and our momentum. And as I stated
• 4:02
  earlier,
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  a lot of how we got started is
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  we feel like there's this health care system
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  we that, you know, all of us depend
• 4:09
  on. We love it. There's ways to improve
• 4:12
  it and mend it. Mend the doctor patient
• 4:14
  relationship. Mend,
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  you know, how really US health care works.
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  And,
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  we just, again, felt like it was thematically
• 4:21
  great. And before we get bigger, it's easier
• 4:23
  to rip the Band Aid off earlier. And
• 4:25
  so we did the rebrand just a few
• 4:26
  weeks ago.
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  Got it. Got it. Very cool. And and
• 4:29
  it sounds like so this is something that
• 4:31
  was always,
• 4:32
  in your heads. You you you fully expected
• 4:34
  to have a rebrand come down the line.
• 4:37
  And it makes sense, the the mending word.
• 4:38
  That's that's that's a that's a great word
• 4:41
  to use, for what you all do. You
• 4:43
  know, the company is positioning itself as the
• 4:46
  first AI native health insurer, which, you know,
• 4:49
  that's a really interesting,
• 4:51
  way to phrase things, I think. And especially
• 4:53
  because we've heard so much, especially the last
• 4:56
  few years, in the headlines,
• 4:58
  usually negative, Jeff,
• 5:00
  about, you know, insurers' use of AI.
• 5:03
  So
• 5:04
  what's what's your perspective on on or Mending's
• 5:07
  position on this in terms of how you're
• 5:09
  using this technology to meaningfully reduce
• 5:13
  administrative burdens for the providers that you contract
• 5:16
  with, and then ultimately, of course, improve the
• 5:18
  outcomes,
• 5:19
  for your members in comparison to a more
• 5:22
  traditional insurer?
• 5:24
  Absolutely. I love this question because
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  I think, Jacob, to your point, there is,
• 5:28
  you know, AI is omnipresent in all of
• 5:30
  our lives, and there's a lot of news
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  happening quickly.
• 5:34
  And a lot of what you hear is
• 5:35
  provider organizations hiring,
• 5:38
  AI agents to go bill better and and
• 5:40
  help their rev cycle. And then what happens?
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  Well, the payer organizations buy their own AI
• 5:45
  to potentially put up more walls or deny
• 5:47
  claims or make it even higher harder with
• 5:49
  prior authorization.
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  And that's kind of the most more negative
• 5:52
  version of things. The way we think about
• 5:54
  it, you know, just stepping back for a
• 5:56
  second,
• 5:57
  we think there's no better time to be
• 5:58
  building a health insurance company than in 2025.
• 6:01
  Obviously, there's been a long history of Upstart
• 6:03
  payers who, to your point, has been largely
• 6:06
  a very challenging experience.
• 6:08
  But if you look under the hood of
• 6:10
  what health insurance truly is, it's
• 6:13
  people,
• 6:14
  it's processes, it's payments, it's a set of
• 6:17
  rules, it's data shifting around, it's a financial
• 6:19
  services company,
• 6:21
  And all of those things combined, we think,
• 6:23
  are uniquely great
• 6:25
  for AI today in a first principles way.
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  And we just know the AI is gonna
• 6:30
  be a 100 x better in 2030. So
• 6:32
  how can we infuse AI truly from the
• 6:35
  start
• 6:36
  of everything we think about in terms of
• 6:38
  our operational processes and the way we think
• 6:40
  about delivering care.
• 6:42
  And so, you know, Mending's version, we we
• 6:45
  this is how it kind of manifests today
• 6:47
  for us. One, like I said earlier, we
• 6:49
  got our start and a deep part of
• 6:51
  our company DNA
• 6:53
  is that the philosophical belief is that preparer
• 6:56
  should be building technology to make providers' lives
• 6:58
  easier. So for a lot of the doctors
• 7:00
  that we work with, primary care doctors, some
• 7:02
  direct primary care doctors,
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  From day one, we have a very unique
• 7:07
  relationship with them where we're embedded with them
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  using AI and technology.
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  For a lot of the doctors,
• 7:12
  they don't have to have staff or RCM
• 7:15
  processes to work with us. There's auto benefits
• 7:18
  and verification.
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  We integrate directly their EHR so that we
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  understand when our members are actually inter getting
• 7:24
  care from these doctors. They don't file any
• 7:27
  claims with us at all,
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  and there's no denial of payments as we
• 7:31
  look at some of that clinical evidence. So,
• 7:33
  you know, again, going back to how AI
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  is being positioned of two agents
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  fighting with each other in a very calcified
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  pipeline,
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  we think there's ways to
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  really, really reduce the friction between payers and
• 7:45
  providers and how payers like us can be
• 7:47
  a very provider friendly organization
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  that ultimately translates to better patient care and
• 7:52
  and better patient experiences.
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  The other thing, as I mentioned, is we
• 7:57
  think insurance companies doesn't need to be an
• 8:00
  army of people to run those processes.
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  A lot of historical and large insurance companies
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  had to build up decades of processes and
• 8:08
  people and admin to run their SG and
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  A to run their operations.
• 8:12
  And I think one of the advantages in
• 8:14
  2025
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  is you you don't have to scale on
• 8:16
  people that quickly. You can actually, from day
• 8:19
  one, embed automation, customer support, network contracting, even
• 8:23
  the broker appointment process. All of these things
• 8:26
  don't need a ton of humans,
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  and we think that savings on operations can
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  ultimately translate to a lot of value and
• 8:34
  savings when we think about premium prices and
• 8:36
  the way we, and the the overall cost
• 8:39
  of the health care system.
• 8:41
  Interesting. And and that's such a fascinating little
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  tidbit you just ended with there with Jeff
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  of the some of the more legacy players,
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  the big ones we see today needing to
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  really build up their staffs,
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  because that's what you needed to run an
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  insurance company, let's say, twenty, thirty, forty years
• 8:57
  ago. And that's really not necessarily the case
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  anymore as technology has evolved. That's that's really
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  fascinating you said that. And I think what's
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  also really interesting is hearing you say that
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  your providers don't don't need an RCM staff
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  or or staff at all necessarily to work
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  directly with you. I think any of providers
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  listening in, that's quite the enticing
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  message given, some of their relationships, I think,
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  probably with other insurers and the staff that
• 9:22
  they do have to hire to work with
• 9:24
  them.
• 9:24
  Let let's talk about a little bit, you
• 9:26
  know, you're you have exclusive partnerships with direct
• 9:29
  primary care practices,
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  And and that does stand out, or at
• 9:33
  least that's that stood out to me because
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  when we hear about this kind of model,
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  usually, direct primary care operates outside of of
• 9:41
  the insurance plan.
• 9:42
  So,
• 9:43
  you know, from your experience,
• 9:45
  the the least last few years, first with
• 9:48
  Taro, now with Mending, how do you think
• 9:50
  this model has has impacted cost for your
• 9:52
  members? How has it impacted,
• 9:55
  the the utilization trends you're seeing internally?
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  And then what are you hearing on the
• 9:59
  ground and from providers in terms of,
• 10:02
  is this actually making a dent? Is this
• 10:04
  making a difference in how they feel in
• 10:05
  terms of interacting with the health plan?
• 10:08
  Yeah. Absolutely. So, for those of you who
• 10:11
  maybe are less familiar with direct primary care
• 10:13
  or DPC,
• 10:15
  these are a lot of, you know, typically
• 10:17
  independent physicians in the community who have started
• 10:19
  their own practices
• 10:20
  who effectively their entire revenue model is cash
• 10:23
  only outside of insurance to your point. Right?
• 10:26
  These are physicians who have kind of walked
• 10:28
  the walk in terms of leaving the system
• 10:31
  and part of, you know, not this is
• 10:33
  not the whole reason, but part of this
• 10:34
  is is precisely because they were in the
• 10:36
  business of practicing insurance, not medicine. And they
• 10:39
  hated the fact that they had to buy
• 10:41
  all these systems and hire all these people
• 10:42
  just to deal with how do we get
• 10:44
  paid by insurance companies.
• 10:46
  The irony is that to your point direct
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  primary care is a really unique feature for
• 10:50
  us.
• 10:51
  As you can imagine if you approach these
• 10:53
  DPCs
• 10:54
  as an insurance company and say hey let's
• 10:56
  partner to a bunch of doctors who have
• 10:58
  literally left that system it's an awkward conversation.
• 11:03
  But from a mission perspective you know they're
• 11:05
  really aligned on figuring out how can we
• 11:08
  mend this healthcare system and
• 11:10
  the technology and AI product for them has
• 11:12
  to be a really high bar for them
• 11:14
  to say yes I'm actually going to become
• 11:16
  in network with Mending,
• 11:17
  I'm gonna accept these insurance insured members
• 11:21
  and my
• 11:23
  kind of my my day to day, the
• 11:24
  way I practice clinically is not going to
• 11:26
  change drastically
• 11:28
  and this has impacted
• 11:29
  cost utilization, member satisfaction in a huge way.
• 11:33
  One, for most of these direct primary care
• 11:35
  doctors, they're only in network with us
• 11:37
  and so they have way more time to
• 11:41
  be spending with their patients. A lot of
• 11:43
  the annual physicals are forty five minutes to
• 11:45
  an hour long.
• 11:47
  You know, patients can go on telemedicine,
• 11:50
  they can emails. A lot of doctor a
• 11:52
  lot of patients, excuse me, will actually text
• 11:55
  their doctors directly and so there's constant interaction
• 11:57
  between the two. The insurance company, us, we're
• 11:59
  not the middleman between the doctor and the
• 12:02
  patient and that's what they love about the
• 12:04
  model as well. We have
• 12:06
  seen early days in our markets of Maine
• 12:09
  and Oklahoma
• 12:10
  on a normalized basis per 1,000 members specific
• 12:13
  to the demographics and market, a 70% decrease
• 12:16
  in specialist utilization,
• 12:18
  a 50% decrease in urgent care,
• 12:20
  35% decrease in ER.
• 12:23
  And we think it's because these doctors are
• 12:25
  actually making themselves way more accessible to our
• 12:27
  members, managing that care effectively.
• 12:30
  And because of all these interactions,
• 12:33
  the doc the patients feel
• 12:35
  really satisfied. We have a ninety seven percent
• 12:38
  renewal rate for our members year over year,
• 12:42
  for for those who are attributed to one
• 12:43
  of these direct primary care practices. So again,
• 12:46
  we're looking for those win win win scenarios
• 12:48
  and going back to that core belief, if
• 12:51
  we can free the doctors from this administrative
• 12:53
  burden and focus on the doctor patient relationship,
• 12:56
  we think it's gonna be better for us
• 12:57
  in the overall system. Sure. Absolutely. No. It's
• 13:00
  an amazing renewal rate you just you just
• 13:02
  mentioned. But I also imagine, you know, from
• 13:04
  the physician's
• 13:05
  perspective, this is an amazing model because, you
• 13:08
  know, it's obviously not a very easy time
• 13:10
  to be an independent physician right now. And
• 13:12
  this just gives you it sounds like a
• 13:14
  broader,
• 13:15
  patient's
• 13:16
  base to access even from from their side
• 13:18
  of things. So it's really interesting.
• 13:21
  And you mentioned Maine and Oklahoma. I know
• 13:24
  that's the states you first got started in.
• 13:27
  Can you educate me, our audience,
• 13:30
  where do things stand today? Where are you
• 13:33
  looking for the future?
• 13:35
  Are you are you looking to expand into
• 13:37
  new markets? And, you know,
• 13:40
  what what have you learned from your initial
• 13:42
  growth in those two states?
• 13:44
  Yeah. Absolutely. So we started in Maine and
• 13:47
  Oklahoma really as a testing bed and to
• 13:50
  understand different populations within The US. Between those
• 13:53
  two states, you have urban settings, suburban settings,
• 13:55
  certainly rural settings
• 13:57
  where patient access is really challenging,
• 14:00
  access to primary care is really challenging. So
• 14:02
  we we felt like they were great environments
• 14:04
  for us to learn in. We will be
• 14:06
  expanding into Georgia this fall, which we're really
• 14:08
  excited about.
• 14:09
  And I think for us,
• 14:11
  you know, working in the fully insured commercial
• 14:14
  space on the exchange, it's a
• 14:16
  dynamic environment.
• 14:18
  You know, you have to look at the
• 14:19
  hospital landscape, you have to look at the
• 14:21
  other competitor payer landscape, the regulatory landscape,
• 14:24
  how many hospitals and direct primary care doctors
• 14:27
  are there available. And so,
• 14:29
  we've learned a lot over the last couple
• 14:31
  years of scaling
• 14:33
  but I think the common theme for us
• 14:35
  is
• 14:36
  as an upstart insurer,
• 14:38
  understanding the history of other insurers who've tried
• 14:41
  to compete against the large legacy players
• 14:44
  you know when they zig you have to
• 14:45
  zag a little bit and you have to
• 14:47
  truly truly find ways to differentiate.
• 14:50
  The network size is one, premium price is
• 14:53
  another, but you you have to really
• 14:55
  you can't use those old playbooks of let's
• 14:58
  just cut premium prices, grow really fast and
• 15:00
  big, lose a lot of money, and try
• 15:02
  to come back and fix our economics.
• 15:04
  And so for us, learnings is, you know,
• 15:06
  making sure that we scale responsibly,
• 15:09
  do it in a way that's sound unit
• 15:11
  economically,
• 15:12
  and then,
• 15:13
  you know, kinda go from there.
• 15:16
  Got it. Cool. So so you're expanding into
• 15:18
  Georgia this fall.
• 15:21
  How do you how do you think that
• 15:23
  could influence or how do you think other
• 15:24
  insurers,
• 15:25
  what do you think they could learn from
• 15:27
  from your scaling?
• 15:29
  And is there any advice that you would
• 15:31
  offer,
• 15:32
  those individuals listening in right now in terms
• 15:34
  of what you've learned up up till this
• 15:36
  point?
• 15:37
  Yeah. I guess,
• 15:39
  guess it depends on who's listening and if
• 15:41
  you're certain that sit sitting on the
• 15:44
  legacy insurer side versus the kind of you're
• 15:47
  with us in terms of being a a
• 15:49
  startup player here. Yeah. Yeah.
• 15:51
  But I I I I go back to
• 15:53
  that
• 15:54
  differentiation,
• 15:56
  where I would also encourage even the legacy
• 15:58
  players to rethink
• 16:00
  how they think about their provider network. And
• 16:02
  it's not just direct primary care, it's finding
• 16:05
  different ways to truly create personalized and differentiated
• 16:08
  products that the market demands.
• 16:11
  You know, even with ICRA now, you're seeing
• 16:13
  more and more employers,
• 16:16
  give that money to their employees and those
• 16:17
  employees are looking for
• 16:19
  very personalized plans that speak to them. But
• 16:22
  the, you know, the the the way provider
• 16:24
  networks have been built over the last couple
• 16:26
  of decades of fee for service contracting and
• 16:29
  just continuing to kind of build those reimbursement
• 16:31
  rates,
• 16:32
  we feel like
• 16:34
  there's gonna be room prop there's opportunity set,
• 16:37
  to really figure out how do you differentiate
• 16:39
  truly on network? How do you use AI
• 16:42
  to be able to augment your,
• 16:44
  your care navigation?
• 16:46
  What are some of these tools that are
• 16:48
  now available that weren't available even five years
• 16:50
  ago and and to kinda double down, triple
• 16:52
  down in those areas?
• 16:55
  Yeah. No. It's good advice. And I wonder
• 16:57
  anything else you wanna mention today?
• 17:00
  You obviously we've got a lot of health
• 17:02
  plan leaders listening in, I think, from both
• 17:04
  sides of the aisle in terms of nonconventional
• 17:06
  and some of the legacy players.
• 17:08
  Any final thoughts you wanna share?
• 17:11
  Yeah. I think, you know, especially at the
• 17:13
  time of this recording,
• 17:14
  there's a lot happening in health care and
• 17:17
  Yeah. You had mentioned too a lot of
• 17:18
  negativity and understandably
• 17:20
  so.
• 17:21
  I think no one can truly truly predict
• 17:24
  the outcome of the one big beautiful bill.
• 17:27
  Everyone is navigating the landscape.
• 17:30
  My overall advice to folks and we say
• 17:32
  this constantly to the internal team is amidst
• 17:35
  all this uncertainty,
• 17:36
  the challenges,
• 17:38
  even the chaos,
• 17:39
  like find the opportunities.
• 17:42
  There actually is a a a set of
• 17:44
  positive opportunities.
• 17:46
  It's gonna be tough. I'm not saying it
• 17:47
  won't.
• 17:49
  But, you know, in in uncertain times, there's
• 17:52
  also at the same time a way to
• 17:54
  radically change how we think about delivering health
• 17:56
  care, how we think about building some of
• 17:57
  these systems.
• 17:58
  And I'm personally very excited and optimistic even
• 18:02
  amidst everything. I think it's time to get
• 18:04
  creative and
• 18:06
  these these times of uncertainty,
• 18:08
  create these windows where,
• 18:10
  we we feel like we can offer truly
• 18:12
  novel products and see if we can break
• 18:14
  the paradigm of how an upstart insurer could
• 18:17
  succeed, in this space.
• 18:19
  Awesome. Well, I feel it's a great place
• 18:20
  to leave things, Jeff. So I wanna thank
• 18:23
  you for taking the time to sit down
• 18:24
  with us and for sharing your insights and
• 18:26
  and future growth plans at Mending with our
• 18:29
  audience. We really appreciate it. Thanks so much
• 18:31
  for having me. And to our audience, if
• 18:33
  you'd like to listen to more podcasts from
• 18:35
  Becker's Healthcare, you can visit beckershospitalreview.com.