Why we invested in CareAdvisors.
Written by: Angeli Agrawal
2020 seems to be the year of healthcare. Everyone from doctors, journalists and the general public have for months have discussed the intricate details of hospital bed utilization and vaccine development in light of coronavirus. One specific headline we at Chingona Ventures have been following, however, is the rise of the Medicaid eligible population. We believe this group is one of the most overlooked in healthcare, and it’s why we’re so excited to announce our investment in CareAdvisors.
Why the uninsured population?
The U.S. healthcare system can be overwhelming for many, but especially for the ~10% of Americans (~27.9M people) who do not have health insurance. Health insurance and medical care need to be weighed against essential needs like food, housing and transportation to work; when the uninsured actually use healthcare services, they can be charged full cost (rather than insurers’ negotiated discounts) or face prohibitive medical bills. [1][2] When they’re unable to pay these fees, hospitals are sometimes left with unpaid medical bills. Professor Craig Garthwaite from Northwestern’s Kellogg School of Management estimated based on research from 2015 that every uninsured patient costs hospitals about $900 per year; in another study from 2014, hospitals provided an estimated $45.9B in uncompensated care.[3][4] It’s no surprise that the COVID-19 pandemic has exacerbated these losses as well, as millions have filed for unemployment and migrate off of employer-sponsored insurance plans.
These numbers for both patients and hospitals seem daunting, but part of the solution lies in helping Americans enroll in the government health insurance programs they might not even be aware they qualify for. As of 2016, an estimated 27% of the uninsured population (8.8M people) were eligible for Medicaid or CHIP (Children’s Health Insurance Program).
What’s preventing people from enrolling? Oftentimes fear and misinformation — one third of uninsured adults didn’t even visit the marketplace, citing a belief in the lack of affordability as their main reason.[5]
Clearly there is an opportunity to inform and guide patients through this journey and help them access more affordable health insurance coverage — and that’s where CareAdvisors (case workers that trained in processing enrollments) comes in.
Why CareAdvisors?
CareAdvisors solves the dual challenge of helping patients enroll in Medicaid and ensuring that hospitals are reimbursed for the care they provide. The company contracts with hospitals and community-based organizations to provide access to Care Navigators, individuals trained in helping patients through the enrollment process via live assistance. If patients enroll in Medicaid within 90 days, hospitals can qualify for reimbursement for services rendered.
We were impressed with CareAdvisors growth over the last few years. The company, headquartered in Chicago and founded in 2018, has partnered with over 17 hospitals and 1 Medicaid plan in the region, including health systems like Rush Medical Center, Presence Health, and Oak Street Health. They have plans to expand into NY, MI and CA and are exploring offering enrollment into other government programs like SNAP. Despite having only three actual case managers so far, the team has been able to process between 500–600 enrollments leveraging their platform.
We also believe in their management team and ability to build strong relationships despite a lean organization. CEO Chris Gay brings finance and healthcare experience to the team from Goldman Sachs and his role at Healthcare Navigator; CTO Pradeep Keshary, a Software Engineer and former entrepreneur; Dawn Gay brings over 20 years in business development at a variety of healthcare organizations.
The healthcare challenges that existed before March are being highlighted by this pandemic; we’re excited to welcome CareAdvisors to the Chingona family and support them as they help uninsured patients receive the affordable care that they need.
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Footnotes:
[1] https://www.kff.org/report-section/the-uninsured-and-the-aca-a-primer-key-facts-about-health-insurance-and-the-uninsured-amidst-changes-to-the-affordable-care-act-what-are-the-financial-implications-of-lacking-insu/
[2] https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/
[3] https://www.meddata.com/blog/2017/10/26/medical-billing-statistics/
[4] https://www.usatoday.com/story/news/politics/2017/07/03/who-pays-when-someone-without-insurance-shows-up-er/445756001/
[5] https://www.commonwealthfund.org/publications/issue-briefs/2019/aug/who-are-remaining-uninsured-and-why-do-they-lack-coverage
