Jan 2, 2019 · 18m · a16z
a16z Podcast | Scaling Healthcare
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
This panel discussion from the a16z Podcast explores how digital health startups like Omada Health and Accolade partner with self-insured employers to bend the healthcare cost curve through proactive care, personalized engagement, and outcome-based business models.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 3.7 Guest teaching 4.8 Guest disagreement 1.5 The host pushing back 2.3
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:33 Dismissing consumer-driven health plan effectiveness
Rajiv Singh rejects the implicit assumption that employers haven't tried addressing costs, calling consumer-driven health plans a euphemistic shifting of economic burden onto employees.
Hardest push from the host ▶ 12:18 Challenging surrogate weight loss pricing metricsJeffrey Lowe directly challenges the guest's billing structure, asking why Omada doesn't take a direct cut of financial savings instead of using weight loss as a proxy.
Biggest teaching moment ▶ 13:01 Exposing the flaw of shared savings contractsRajiv Singh details why the theoretically attractive shared-savings business model breaks down in practice, frequently devolving into year-end legal arbitration over actuarial attribution.
The host holds their own ▶ 12:18 Identifying attribution disputes in health billingJeffrey Lowe demonstrates strong corporate finance insight by correctly identifying that proxy-based pricing creates attribution disagreement between vendor and client actuaries.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| The Evolving Role of Employers in Healthcare | 3 | 5 | 3 | 2 | Host Jeffrey Lowe opens by framing healthcare costs as an international competitiveness issue and asks if anything has changed. Guest Rajiv Singh gently counters the notion that employers haven't tried to fix this, explaining how consumer-driven health plans merely shifted financial burden onto employees without improving health outcomes. | |
| Self-Insurance and Business Competitiveness | 2 | 5 | 1 | 1 | The host prompts the panel on why non-healthcare business leaders should care about healthcare spend. Guests Sean Duffy and Rajiv Singh educate on the economics of self-insurance thresholds and how unchecked health inflation directly erodes corporate competitiveness and talent retention. | |
| Prevention vs. Early Intervention and Proactive Engagement | 4 | 5 | 2 | 1 | Host Jeffrey Lowe asks about turning prevention theory into practice and transitioning academic papers into real commercial products. Sean Duffy reframes Omada's work from generic prevention to early metabolic intervention, while Rajiv Singh explains why traditional reactive carrier management programs failed. | |
| Personalization through Accolade's Data Platform | 4 | 5 | 1 | 3 | The host presses the guests for hard financial numbers and proven ROI for employers. The guests deliver concrete metrics, including $1,300 annual savings per enrollee for Omada and 5-7% total healthcare trend reductions for Accolade. | |
| Alignment of Incentives and Pricing Structures | 6 | 5 | 2 | 6 | Host Jeffrey Lowe actively challenges Sean Duffy's pricing model, questioning why Omada charges based on clinical proxies like weight loss rather than taking a direct percentage of actual financial savings. Both guests elaborate on why direct shared savings models lead to adversarial actuary disputes during year-end reconciliation. | |
| Operational Implementation and Carrier Integration | 3 | 4 | 0 | 1 | The host asks about operational roadblocks during employer implementations. The guests outline how filing claims directly through self-insured plans and taking over carrier 800 numbers eliminates friction for human resource buyers. |
Statements from this episode (17)
Duffy: Preventable chronic disease now kills more globally than infectious disease
“In our space, for the first time in global human history, preventable chronic disease is killing more people than infectious disease.”
Duffy: Diabetes healthcare costs inflate by 5% year over year
“Year over year, you see in the diabetes space, about five percent cost inflation.”
Singh: High-deductible health plans only temporarily reduce healthcare costs
“The unfortunate reality is, the consumers never, didn't really get smarter as a part of joining the healthcare system as an economic buyer, and costs would go down for a year, and then start to slowly but surely drift back up.”
Duffy: Self-insured employers drive 55% of US private healthcare spend
“55% of the private health spend in the U.S. Is through self-insured employers, and they have an enormous amount of power To influence the plans, to influence change across the whole ecosystem.”
Duffy: A 10,000-employee company spends roughly $100M annually on healthcare
“If you take a 10,000 person company, that company's annual medical spend, I mean, they'd be self-insured at the level. It's probably around a hundred million a year.”
Singh: Companies with as few as 200 employees are adopting self-insurance
“And, you know, the number of thousand employees used to be the boundary for employers to move to self-insured. That number's going lower and lower every year. The number of employers who are saying, hey, in this fully insured model, my carrier's not necessaril…”
Duffy: Omada Health achieves $1,300 in annual medical savings per enrollee
“We have claims data now that look out a year and see 1300 in savings per enrollment.”
Duffy: Omada secured the AMA's first-ever digital-specific CPT billing code
“We got the American Medical Association for the first time in AMA history in the U.S. To approve a digital-specific CPT code. Never happened before.”
Duffy: US healthcare fails by dumping system complexity onto individual patients
“I think in the US healthcare system, we've made the mistake of just placing all the complexity burden on the person, the patient, and you really, in order to make the sort of impact that we need to make on the prevention side, on just kind of retooling some of…”
Singh: Accolade cuts employer healthcare spending by 5% to 7% initially
“We're really attacking the entire volume of healthcare spend, and so, you know, we've seen cost savings in the first year, five to seven percent.”
Singh: Accolade saved 2.9% in first year on 100,000-member exchange population
“We just got our first set of data on a 100,000 member population. That's 2.9% savings in the first year.”
Duffy: Omada Health charges clients based on clinical weight loss outcomes
“So when we enroll someone, we file a claim, and actually from there, we charge on an outcomes basis. So the more successful we are with the person according to what percent of weight loss we get them to, the more money we make”
Duffy: Shared savings models strain client relationships over actuarial attribution disputes
“The slight challenge with that is you get in this reconciliation moment at the end of the year where it's like, You know, where's the attribution? You know, it's kind of my actuaries versus yours, and it's kind of not a good way to foster just deep partnership…”
Singh: Accolade moved all customer contracts from shared savings to fixed fees
“We've, in fact, moved all of our agreements To take a percentage of our revenues on a fixed basis, but we do want to be aligned with the customer's needs, and so we do that by saying, we'll measure ourselves on engagement.”
Singh: Healthcare platforms should replace carrier support numbers to drive engagement
“The second thing we really have to do is in that early stage of deploying that customer, we have to be great at understanding their data, creating those personalized recommendations, and then finding a way via both consumer-based marketing techniques as well a…”
Duffy: Omada Health has collected 24 million structured weight readings
“We now have twenty-four million weight readings, you know, all very structured after more than three years that we can use as the primary endpoint to see what for that person is working.”
Duffy: Omada's Medicaid trial yields health outcomes comparable to its core business
“We're right now doing a big clinical trial in the safety net Medicaid space. And, you know, thus far, you know, the outcomes are quite comparable to book a business, I mean, in large part due to this personalization.”