Understanding Health Insurance Doesn’t Have to Be a Burden

- On my daughter's sixth birthday, I was sitting at my desk, when out of the blue, I got a really intense pain in the middle of my stomach. (siren wails) My small intestine had twisted on itself. Everything below the place of the twist lost blood flow. I ended up having ten feet of my small intestine removed. I had a really bad abdominal infection, so I ended up being in and out of the hospital for a couple of months. When I came home, I started to receive bills from my insurance company, and my total bill ended up being several hundred thousand dollars, of which almost half was not covered by my plan. After spending hundreds of hours on the phone, not getting a straight answer, I was just like, "This is not fair, "this has gotta stop." So I vowed that I was gonna fix this. I vowed that I would make it better. (soft music) The good thing about being an American is that we are wired to not accept things that don't fulfill our expectations. The general public decides

that they don't like the status quo, and they do something about it. And that's why I think Silicon Valley can really only exist in a place like the United States. I think what's exciting about this new wave of companies in the valley is that they're really bringing the power of the web, the power of networks, the power of data, the power of customer service experience, the power of great design to the physical world in a way that is unlike anything that we've seen before. (upbeat music) I don't really think of myself as a member of some, like, swashbuckling coterie of entrepreneurs, I just view myself as one actor that's trying to fix what I think is a very in-need-of-fixing part of our economy. I think it was just a matter of time before health insurance had its reckoning, or had it's moment. For me, obviously, it's very personal. I felt like I was getting incredible care, but the experience of how to pay for it, understand what I was paying for, felt decidedly different. That was the driving force for Collective Health. When I was researching the health insurance industry, I discovered this phenomenon of self-insurance.

Usually people think of their health insurance as coming from the logo on an ID card. But in many cases, larger employers, especially those with 1,000 employees or more, turn to self-insuring their health plans, which means they're the ones footing the bill, and taking on the entirety of the risk of covering their employees' health care costs. Essentially, they become mini health insurance companies. Companies do this in order to better tailor their health benefits to the unique needs of their people. So for example, they could offer a fertility or a behavioral health program that might meet the specific needs of their population in a way that traditional health plans don't. Under this model, the incentives are really well aligned, because at the end of the day, employers care about having healthy, productive workers, but they also need to do it in a financially responsible way. Self-insured employers, therefore, are in a position to drive the kind of change we want to see in the health care system, because they're far more accountable for spending their money wisely. Collective Health was designed specifically for them, to make it much easier, and much more transparent to manage their health care investment.

But it's not an easy thing to do. What we do is a lot like an iceberg. There's obviously engineering, and operations, and design, and product, but there's also customer service, and customer support, and legal, and compliance. And so the minimum viable product that we have to build as a startup is really, really large, and unlike any one that I've worked on before, especially at this stage. We sit at this nexus of people's health and people's money, and honestly you can't sort of mess with either. People are very, very, very anxious. I mean, health care costs are the number one cause of personal bankruptcy in this country by a pretty wide margin. - If you go out there and you surveyed Americans, what's a copay, what's a coinsurance, what's a deductible, and what's an out-of-pocket max? Only 14% of people could answer just one of those questions correctly. So what we're working to do is to radically simplify the benefit design, and the plans, and the way those plans are presented, so that they can actually make sense to people. - Fixing health insurance is a huge problem. It's daunting, it's scary,

but that's also what makes it motivating. People aren't motivated by easy challenges, they're motivated by the gnarliest, hairiest challenges out there. Everyone, without exception, here has had some experience that's made them personally very motivated to make the industry a lot better than it is today. You're not thinking about yourself or your own sort of individual accomplishment, you're thinking about this issue that's bigger than any individual one of us. Entrepreneurship is not easy, but for those of us who are unsatisfied with the way things are, I don't think there's a better way of expressing that kind of protest. I think working on something that has meaning in the way that what we're doing does, definitely makes me feel good, because I can go home and tell my kids, "Look, I'm trying to fix this system "that touches each and every one of us." - I'm really proud that he has taken this as a fight that he wants to fight, and has gathered amazing people around him to help him do that. And hopefully, other families won't have to go through what we went through.

- [Man] What does daddy do? - What does daddy do? - [Man] As his job? - He works on health insurance. - He makes people healthy. - He works on health insurance. - People are frustrated and want change. We're just very happy to be able to deliver on that change.