Jaime Moran is the Chief Product Officer at Sana Benefits, a technology-driven health insurance and care company on a mission to make healthcare affordable, understandable and accessible. Jaime was interviewed by Andrew Daniels, Founder and Managing Director at InsurTech Ohio and COO at LISA Insurtech.
Jaime, why the healthcare industry and why now?
“Healthcare is a huge industry – almost 20% of GDP. A majority of healthcare is paid for through health insurance, which is a bit unique compared to auto or home insurance. That makes healthcare complex and even more interesting from an insurtech standpoint.
In addition, the health care and insurance industry is early in the adoption of technology and data. Fax machines have all but disappeared in most industries but continue to thrive in health care.
I remember sitting in the pediatrician's office with my two year old in 2012, watching the pediatrician count the number of ear infections by flipping through two years’ worth of paper visit notes to figure out if she should refer him to get tubes in his ears. My son was fidgeting like crazy. I needed to get back to work. I remember thinking this should have been digital - served up to the doctor in milliseconds.
About a decade ago, federal regulations helped drive adoption of electronic medical records. So, we've now digitized enormous volumes of data, and we are beginning to apply that to the health insurance space as well as health care delivery. Layer on top the acceleration of virtual care models due to Covid. It's an exciting and impactful time to work in this industry.”
How are these new data sources and big data influencing the healthcare industry?
“Of course big data and new data sources unlock opportunities in underwriting, pricing, marketing, customer retention, claims handling and automation more broadly.
A key opportunity with big data and new data sources in health insurance is around risk prediction and prevention - keeping our members healthier and helping guide them to better care choices. This translates into a competitive advantage in terms of the price we can charge for a comparable risk profile. Across the industry, we’re getting better and better at predicting big claims and high claimants. But, reaching out to a member to tell them they’re at high risk of diabetes and recommending they exercise and lose weight is not only ineffective but downright creepy. A key focus now is on driving behavior change with personalization and meeting our members where they are. To provide a simple example, when we can send an automated, mass-personalized message recommending an alternative for an upcoming care need that saves a member money or time, we see an impact.
What I see as even more impactful with digitization of medical records and new kinds of healthcare data is disruptive innovation in the actual practice of medicine. A lot of us wear smartwatches or use apps to track our sleep, activity and more. We’re just starting to see this data used. Another example is connected medical devices. One of my family members has type 2 diabetes, and their care will probably sound familiar: their primary care doctor sees them a couple times per year, does a key blood test, maybe adjusts their medication and asks about diet and lifestyle. In contrast, connected glucose monitors can not only automatically share data to a patient’s care team but also provide algorithm-based feedback to the patient day to day while they are living their life. This is a game changer to help manage someone with diabetes not just in terms of better data to develop and manage care plans, but also transformative in empowering the patient and substantially more scalable.
So, new data sources and big data are changing every aspect of our business: how we price and manage risk, how we drive membership growth and more favorable unit economics and increasingly what health insurance covers.”
What makes Sana's model unique in a fiercely competitive health insurance industry?
“It is interesting that health insurance has been dominated by a small set of players for decades. If you think back, it is hard to remember a new health insurer. It is a very difficult industry to break into. But, there's been a spate of health insurance innovators over the last couple years.
Our model is uniquely focused on the small and mid-sized employer market which is heavily underserved. Small employers face significantly higher prices for health insurance than larger employers. There is a similar cost to acquire and serve an employer whether they have 10,000 employees or a hundred, so within the employer-based health insurance segment, the large employer market is the focus for most competitors.
Serving small and mid-sized businesses is critical because it requires us to focus on lowering cost and automating at scale so that we can serve that population - and eventually expand to additional market segments - affordably.
First, we use technology to bring down administrative costs. For example, we have more automated underwriting, which enables us to issue rates with little human involvement and fast turnaround as compared to other players.
Second, we have an integrated business model in contrast to the fragmented stack of vendors typical of employer health benefits. Typically, the fee structure is based on percent of premium or volume of claims, which means lower prices or fewer claims translates to lower revenues. It is a conflict of interest. We are able to make certain fees a flat per person, per month versus a percent of premium. Our ability to align incentives there - and in many other aspects of our business - is critical.
Third is our adoption of value-based care. Our adoption of advanced-care models and fair pricing enables us to deliver better and more affordable care to our members. We are integrating advanced primary care into our benefits and pricing via Sana MD. We offer many other new tech-enabled care models, from mental health to pediatric care, personal health coaching to house calls. For example, Sana offers SWORD Health, which pairs FDA-listed wearable technology with a virtual Physical Therapist, so our members can get care at home after hours and on weekends as compared to driving to a 30 minute physical therapy session once a week. So, we're pricing and underwriting new kinds of care for our members, which is exciting. But, our adoption of value-based care is important for another reason too. There have been high profile articles about the irrational variability in hospital and health care costs. We are not as reliant on local hospitals and health providers for fee-for-service billing at arbitrarily variable rates. This enables us to have more certainty in our pricing and underwriting.
So we are pulling many levers to make health insurance and care not just a modern experience and higher quality but also more accessible and affordable. And it is having an impact. We are proud that thirty percent of our customers previously did not offer health insurance to their employees.”
What are you looking for when you hire a product team? Where do you find good product people and how does your background help you in this endeavor?
“Healthcare is so complex and heavily regulated that it can be intimidating to break into. We are throwing away the status quo and looking to disrupt, which requires a mix of industry expertise and outsiders. Our co-founders come from outside of healthcare with experience building SaaS products for small employers. Our COO and I, amongst many people on our team, have deep healthcare backgrounds. So, we love hiring folks that have been healthcare innovators, but in product, design and engineering, we look to bring in people from various tech sectors. People who join Sana may have been working at a hyper growth tech company, but they are looking to work at a company where their work is making the world a better place. So, the mission really helps, right? Everybody either is a healthcare patient or knows somebody who's impacted by it, and we're working to make it better and more affordable.”
You've been a part of big companies and startups. What are some of the main differences between the two?
“I spent the first half of my healthcare career in big companies, and I was attracted to those companies because you can have an impact at scale. There are innovative products and programs that I was a part of that are still out there today that are accessible to tens of millions of people across the United States. That's really rewarding. The reason I made the switch to startups is for the talent and the speed. It is energizing and so fun to work with folks that are at the bleeding edge from a technology and data science standpoint. The speed with which startups can get stuff done is amazing. We're launching new capabilities all the time. It is really exciting to make a difference quickly. Every day I am focused on how we can accelerate in order to bring affordable, tech-enabled health insurance and care to more customers and members. We are building to scale.”