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“BETTER MRI” Finding The Best MRI For Your Patients
Ming Yang, Kathleen Brennan-Beshara, Jon Herman, Alex Bagley, Charlie MaherHealthcare VenturesDec 8, 2015
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58.4% self insured employers > 1000 employees
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Healthcare cost climbs at 17% anuually
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Solution/Cost sharing with employees• High Deductible Plans• Average deductible for employee from
• $2000 a year per individual• $4000 a year for family*
• True out of pocket cost >$6000 a year
• HSA help with tax free savings, but not enough.• Most financed with credit debt
*Kaiser family foundation
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Benefits / Healthcare as key recruitment tool
• Healthy employers, more productive employees, less absenteeism
• Adobe system reports 100k’s in savings and higher retention by investing in enterprise healthcare management tool to support employees
• Management to Cadillac Tax: 40% tax on most expensive private plans
PSU Professor of Economics Dan Goldstein
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Employer contracts with Better MRI to provide price transparency on costs
• Employees resent high deductible plans as they believe they are bearing all the burden of rising healthcare costs.
• 44% of employers considering it the only option - 18% there already*
• Better MRI helps avoid reaching the high deductible maximum, which shifts all the burden to you once HD achieved.
• Competitors in the field do not offer price integrity, patients frequently disappointed with charges double what appeared on website.
• * pwc healthcare trends 2014
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Competitive AnalysisCentralized Control of Cost Variables
Dynamic Change of Healthcare Plan
Discount referrals & bonuses
Gurantee Price
Prepaid services with HSC direct Payment
Castlight, CA
Y Y
Vitals SmartshoppersMA, KY, NH,PA
Y
SpeedWell, WA/OR
Y
Better MRI Y Y
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As deductibles rise consumers forego medical care
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John and Mary… & mgmt of healthcare costs.
• In order to control healthcare cost, couple has chosen a high deductible healthcare plan from their employer.
• John and Mary are responsible for first $2000 out of pocket and need outpatient MRI.
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Where do they cut costs?
28% avoid MD visits
24% skip Rx or take less than prescribed
24% skip Specialists referral
18% don’t do reccdm f/u care ie physical therapy
16% delayed or cancelled
procedure, screenings or
treatments
Health and wellness survey 2015
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NPR One 11/30/15 radio showPricing Tools as ‘imperfect clue of costs’
Better MRI will offer ‘starter kit’ based on size / medical history demographics of employee claims. For example, upfront $10,000 package and if we don’t save at least $10k in covered employee outpatient tests in 6 months…we will refund 120% of the cost of starter package.
Ongoing cost will be a % of the total savings realized by the employees for using Better MRI network
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Employees need help
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Shopping in the dark….
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Value Proposition and Revenue
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10
Yr 11
0100200300400500600700800
Value Proposition
Unit of MRI Scans covered(in thousands)Savings brought by using our service(in millions)
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10
Yr 11-5.00
0.005.00
10.0015.0020.0025.0030.0035.0040.00
Revenue
Revenue from self insured employer(in millions)Operating Income(in millions)
Yr 1-5 Yr 6-10 Yr 11-Savings per scan(in thousands) 5 3.5 3
Growth in Volume 100% 20% 5%
Charge 5% of cost savings
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Validation on value proposition
• Companies offering self-insurance to their employees are struggling to control costs of outpatient MRI for employees & families.
At least 1 in 10
Americans need MRI scan each year
3,000Private MRI facilities
$1k-7k at hospital$500 at private
facility for scan of extremity
$5.5Bper year
Better MRI helps to save the self-insured employer approximately 50% of the total cost of scans (extremities to outpatient / more complex to hospital)
Risk Assessment• Market Risk
• Geographic distribution/scalability
• Rely on contracts with imaging centers to limit competitors
• Adoption by self-insured companies
• Reimbursement for non-MRI services
• Financial Risk• Low initial capital will allow for
lower profits in early stages• Technology Risk
• EMRs and payment models in flux
Courtesy of Zen Chu
Questions?