Tony Luong for Business Insider
- In the future, going to the doctor’s office might start to feel different, with you or your insurer paying a monthly fee for routine access to your doctor without paying a copay.
- It’s the model for Iora Health, a startup that works with "sponsors" — mainly employers or private health plans for the elderly (known as Medicare Advantage) — that cover the monthly fee. Iora also built out care teams of nurses and other health professionals that can help the doctors within the practice.
- We spoke with Iora’s CEO Rushika Fernandopulle about how he built a company that’s raised more than $250 million with plans to grow to 50 practices around the US by the end of 2019.
- Fernandopulle is one of Business Insider’s 10 people transforming healthcare.
- Visit BusinessInsider.com for more stories.
Fifteen years ago, Rushika Fernandopulle had a radical idea.
A primary care doctor by training, he had been treating patients in the standard, insurance-backed way. But he started to realize that wasn’t working, and insurance wasn’t covering what he wanted to do for patients.
"Working in the system, you have to be blind, deaf, and dumb to not realize that the system is broken," Fernandopulle, the 51-year-old CEO of Iora Health told Business Insider.
So he decided to create something new. The practice was initially called Renaissance Health and was based in Arlington, Massachusetts, outside of Boston.
There, Fernandopulle gave patients a proposition: He could charge them around $40-$50 a month and wouldn’t take insurance. In return Fernandopulle could give them longer doctor’s visits, follow-up calls, and more hands-on care to keep them healthier.
While the model of charging a monthly fee worked, the person paying that fee has shifted. Now, instead of having patients pay the monthly fee directly, Iora works with "sponsors" — mainly employers or private health plans for the elderly (known as Medicare Advantage) — that cover the monthly fee. Iora also built out care teams of nurses and other health professionals that can help the doctors within the practice.
Iora says the approach is working. In one group of Medicare patients, Iora says it reduced hospital admissions by 50% and emergency room visits by 20% over 18 months.
The company has raised more than $250 million from investors like GE Ventures, Khosla Ventures, Temasek Holdings, and Humana who are betting that the model could be the future of healthcare in the US, especially for the elderly population.
Courtesy Iora Health
How Iora works
Say you’re on a Humana Medicare Advantage plan in Phoenix. You can opt into an Iora membership (about one-quarter of those Humana MA members do exactly that), and get linked up to doctors and health coaches aimed at keeping you healthy. Because it’s a membership model, you don’t have to worry about copays for visits.
Doctors see about 500 to 700 patients, depending on where they practice and the health of those patients. It’s much smaller than the more than 2,000 patients traditional family medicine doctors might oversee.
Today, Iora has about 34 practices around the US, a number it’s planning to grow to 50 by the end of 2019 via setting up entirely new practices. In March, Iora announced its plans to expand into North Carolina through a collaboration with Blue Cross Blue Shield of North Carolina.
The way Fernandopulle sees it, he and the Iora team are building something entirely different from what exists today.
"We’re building a radically new consumer-centric relational model for healthcare that’s not a little different than the current transactional ‘do stuff to people’ model," Fernandopulle said.
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