In 2017, U.S. healthcare spending grew 3.9 percent, reaching $3.5 trillion. On average, that’s more than $10,000 per person.
Smaller employers are having a hard time keeping up with rising costs, causing many to move to high-deductible plans that shift the cost burden onto the employee, says Reuben Buckareff.
“Everybody wants to retain good employees. We’ve got a really tight labor market. Employers are stuck between a rock and a hard place because their insurance keeps going up every year. Benefits are the second largest line item after payroll,” Buckareff tells Hypepotamus.
“With high-deductible policies, people are having to deal with more and more of their own decision-making as employers shift since they can’t afford insurance.”
With high deductible plans comes higher-cost prescriptions, as well. This can be mitigated by searching for a better deal at a specific pharmacy or provider, but how do you know where you can find those deals in real-time?
Clutch Health wants to help you do just that. The app captures electronic prescriptions that come in from a doctor. The patient can pick the most affordable price from pharmacies in the area right on the app.
It then quickly forwards the prescription to the chosen pharmacy.
Enrollment in the app is done through the patient’s employer, who also pays a fee for the software on a per claim basis.
Buckareff has nearly 30 years of experience in healthcare, where he observed up close how the pharmacy network operates. Much of the money is being funneled to Pharmacy Benefit Managers (PBM), middlemen who set drug prices.
Solutions like prescription discount startup GoodRx offer pharmacy discount cards with a lower spread — the difference between the price you pay and the actual cost of the medicine.
For example, a Lipitor generic may only be 60 cents, but it’s sold to you for $8-$12 a prescription.
But to really disrupt the industry, Clutch Health has set itself up as an actual PBM — the typical bad guys in the scenario.
“There’s been a shakeup in the industry where insurance companies are buying PBMs or PBMs are buying insurance companies, like Caremark (a PBM) bought Aetna (a payor),” says Buckareff.
“Through friends at Humana, we were able to buy into one of the large PBM networks to play alongside the big boys. Even though we’re a small PBM startup, we can compete with Caremark and Optum because we have a network of 65,000 pharmacies.”
Buckareff, along with partners Randy J. Mire (also a pharmacist) and Todd Croom, created the technology behind Clutch Health.
“This platform allows us to give the consumer the ability to shop for the best price,” he says. “Smart employers want to retain employees. If they lower the costs of prescriptions for them, it makes a big difference.”
Croom says it also benefits the employer by providing full transparency on their spend.
“We don’t need to make $8-12 per spread. For us, if we make $3 per claim, that’s more than fine because there are millions of claims that get processed every year,” he says.
Atlanta-based Clutch Health has raised an undisclosed amount of funding and is generating revenue.
Buckareff teases that their next product update involves adding blockchain technology to improve transparency and lower costs even further.
“It’s probably the most fun I’ve had of any business I’ve ever done because it affects so many people. It’s just amazing,” he says. “When you see people are actually starting to save money on their drugs — that’s a big deal.”