On average, employers spend nearly as much on healthcare benefits as they do on payroll. But the complexity of the healthcare system means many workers still struggle to find, access and understand their care options. That’s why health tech startup Grand Rounds created a navigation platform to make the process of finding and receiving healthcare easier, faster and more affordable. It’s also why the company has played a critical role in helping employers and health systems grapple with the coronavirus pandemic. You can find some of their public COVID-19 resources here.
As a provider of data, clinical expertise and resources for employers and their workers, Grand Rounds has become an integral part of the healthcare system. As a partner to many Fortune 500 companies, Grand Rounds covers more than 5 million members and has experienced an uptick in usage since the earliest days of the pandemic. While the crisis has caused a significant downturn in business for many companies, Grand Rounds has had the opposite experience, and has risen to meet demand with new technology and resources including an online symptom checker, telemedicine appointments, and guidelines for safe return back to the office. The company is also supporting employers as they rethink healthcare spending in uncertain economic times.
Grand Rounds CEO and co-founder, Owen Tripp sat down with Greymatter to share his experience of running a health tech startup; how his company has evolved over time to meet the ever-expanding needs of employers; and what he believes still needs to happen to ensure the health and safety of workers is at the center of all business operations.
Listen to the podcast here:
Below are highlights from the conversation:
Putting Costs in Perspective
“If you look at any blue chip American company, you’re going to find that healthcare spending usually ranks only behind payroll on their total expense line items as you go through them. For example, in the case of Starbucks, they spend more money on healthcare than they do on coffee, which is kind of shocking to people when you think about it. They have this massive supply chain team that’s better than anybody else in the world at finding and selecting coffee beans. But they have just a few people – and I literally mean a few people – who are thinking about the selection and procurement of healthcare and healthcare benefits, so that’s just sort of the world as we inherited it.”
“In terms of sales cycles, and at the moment of COVID-19, there’s good news. When we talk about total enterprise spend, these very same companies are spending more on healthcare benefits than they are on their internal software portfolio. It’s striking to think about it in those terms, but it’s entirely true. It has been an under-penetrated part of enterprise selling.”
On Product Development and Sales in Uncertain Times
“As we confront this moment, how do we make sure we don’t build something that is really only purpose built for this moment? We thought about whether we wanted to build a sort of robust contact tracing approach. But the debate was really around whether that was something that was going to have a lot of longevity or whether that was a purpose built thing for the next iterations of the virus. So I’m less enthusiastic about things like contact tracing, but I’m more enthusiastic about things like virtual primary care and sort of longitudinal ways of connecting and developing a relationship with people so that they can get the majority of their healthcare needs met through the ease, convenience, security, and personalization that these new virtual care platforms will allow.”
“The word ‘pilot’ is sort of like a four letter word for me, mostly because of the way that it has been historically used: if somebody was piloting something, it was really just a project. They didn’t really care a whole lot about it. And they look at it from the point of something they weren’t going to commit a lot of time or capital towards; that makes it unlikely that it’s going to be successful for either party. So we tend to go all in. I think this is the classic thing that you have to do as an entrepreneur. When you’re trying to earn a spot in the marketplace, you have to back up your theory and your projections with stiffer financial commitments. And we were absolutely able to do that. Now we’re starting to flip it in the other direction where it’s, ‘Hey, there’s a presumption. We’re going to be successful at the beginning.’ That’s a shared presumption. And now let’s make sure that as we’re more and more successful, let’s share in the upside that we can create together. And I love being there because it’s very much about aligning with the employer as to what you’re trying to create together.”
On the Importance of Having a Healthy Workforce
“While corporate budgets have been frozen on a number of topics, benefits went from being the thing that you kind of needed to do as a company to make sure that people had access to healthcare, to now the thing you need to figure out, otherwise your company can’t run.”
“You have to think about patients holistically. Unless you’re thinking about their financial wellness, unless you’re thinking administratively about how they get to their appointments, how they get access to the things that they need – unless you think about that whole patient approach — it’s unlikely that you’re going to achieve the business results you want to achieve, because you’re certainly not going to achieve the clinical outcomes that you want to achieve.”
“Think about those who are working to keep the food supply chain safe and secure for all of us. We’re consuming their products daily, and there is no work from home strategy for Tyson foods. There is no way for them to keep America’s grocery stores stocked if they take a lot of people off the line. [They can’t do that unless] they are thinking about the entire strategy for wellness, the entire strategy for how to safely take care of people, how to take care of people when they get sick, and how to protect and prevent people from other people from getting sick. This is the sort of work that Grand Rounds is doing across the country. Companies like that have made budgets pretty liquid to make sure that people can attack that problem with vigor.”
“I think the only challenge is knowing that there hasn’t been one authoritative playbook written on this. How do we work with those companies hand in glove to make sure that we’re accelerating against their strategy?”
The Evolution of the Health Tech Market
“There’s this incredible moment right now to get capital behind companies like Grand Rounds that have a blueprint to service massive addressable markets.”
“Capital cycles might be slowing after our 10 year bull run, and I would say broadly in tech, I’m sure that’s true. But I’d say in my little corner of the world, that’s probably not true. I think you’re going to see acceleration in digital health because we are at a moment now where two or three of the companies that we are seeing emerging in digital health will be the managed care companies in the future. Many of the managed care companies we’re familiar with now, like the United Health’s and CVS’s of the world are not just the Fortune 100, they’re in the Fortune 20, right? There are some of the largest companies in the world.”
“We’ve seen a lot of acceleration on virtual care. And generally, this is a big part of our forward strategy. The notion that I will connect with my medical team through my camera, through short texts, through a primarily digital environment – that wave is here to stay. This is not sort of a passing moment. We’ve gone from about 3% telehealth usage in the country to about 40% in less than three months. And by the way, just getting from zero to 3%, took us about 10 years. Ten years to go from zero to 3%, and then we went from 3% to 40% in three months. And we’re not going backwards because even when we start to recover from from COVID-19 specific implications, you’re going to have a whole bunch of people who are high risk, who have chronic medical conditions, who are over a certain age who are not going to want to go into a traditional doctor’s office unless they absolutely have to. So for all of us working in healthcare and healthcare delivery and the digital side of it in particular, that is a massive call to arms and a huge opportunity.”
On Partnerships for Health Tech Entrepreneurs
[As an entrepreneur] You would really be well advised to make sure that any sort of capital partner that you pick has an understanding of the speed of the cycles in selling into these markets, because they don’t look like other sales cycles. And the last thing you’d want to do is have somebody who is used to any sort of consumer sales cycles – or even a traditional enterprise sales cycle who is sitting on your board, and doesn’t understand that sort of building the momentum and building the influence through all the partners that you need to in order to start to conduct these employer sales is time consuming. Very little happens in this industry overnight.”