JPM’s Vera Investment And Healthcare’s ‘Moment Of Reckoning’ With Payments

JPMorgan Chase’s new healthcare unit, Morgan Health, has made its first investment, putting $50 million into Seattle startup Vera Whole Health. In addition to the investment, JPMorgan will begin offering Vera to its employees during benefits enrollment season this fall.

Vera’s core product is its healthcare subscription model for employee healthcare, created to help ease payment challenges and care costs. The Vera model varies from the norm in that it charges the companies it provides coverage for a flat fee per person and tasks the primary care doctor to function as the healthcare coordinator for all services a patient needs.

“In our care model, our teams are paid a salary plus bonus, and that bonus is tied specifically to their outcomes,” Vera CEO Ryan Schmid said in a recent interview, as opposed to the more traditional model which pays providers based on the volume of procedures they do.

JPM is Vera’s first major corporate partner, and represents another step forward in upgrading the payments portion of healthcare that data and experts agree is desperately needed.

Meeting The Moment Of Reckoning

The healthcare system pre-COVID was sick, Forward Co-Founder Rob Sebastian told PYMNTS’ CEO Karen Webster earlier this year — largely because the system’s focus is treating sickness instead of promoting wellness. The push of firms like Forward, and Vera, he noted, isn’t so much remaking healthcare in response to the pandemic so much as COVID unmasked the baked-in inefficiencies in how doctors are incentivized to treat patients.

“The last year has really proved to be a moment of reckoning for the healthcare system at large,” he said. “It’s a system of really good people with really great intentions, but I think they’re often using the wrong tools and working for companies with the wrong incentives. And so from that perspective, I want to see more investments in something that I think of as literally one of the biggest, most important industries in the world. I think this is a place where you have a chance to truly positively impact humanity if you get it right.”

In depth: ConnectedEconomy 2021: Forward Rethinks The Spirit And Intent Of Healthcare

The traditional healthcare system, he said, is not incentivized to care about patient satisfaction, though patients are paying a lot to be left unsatisfied. As of 2019 Americans spent $3.8 trillion, or a little under 20 percent of the nation’s gross domestic product (GDP), on healthcare alone.

A lot of spend, without a lot of choice for patients, Sesame Founder and CEO David Goldhill told Karen Webster. The employer-based health insurance programs that dominate consumer healthcare choices, he said, exist because of a quirk of U.S. tax law, not because anyone thinks employers are well position to take the lead on employee care choices.

Read more: Sesame CEO: Direct Payments Inject Innovation Into Healthcare

Unlike nearly every other part of the economy, he said, suppliers and sellers are dealing with insurance companies, instead of with patients who are the actual consumers — ultimately making it much more complicated for people to get the care they need and understand what they are paying for it at the same time.

“I’m a big believer that one-size-fits-all solutions in healthcare for 330 million people is one of the problems with the system,” Goldhill said. “And the reality is that the line between wellness and care is often defined by what’s covered by insurance and what isn’t. It’s not about your healthcare experience or even a therapeutic journey or path. It’s about what’s paid for by someone else.”

Consumers’ Changing Needs

The pressure on the healthcare industry to remake itself into a more consumer-friendly model has not eased off as the pandemic has pulled back and consumers have begun to make their way back to their more traditional places of care in doctor’s offices. In fact, PYMNTS data demonstrates, consumers are more likely to actively look for flexibility when they pay at their provider.

See more: REPORT: Consumers Demand Digital Be Part Of Their In-Person Healthcare Experience

PYMNTS found the majority of healthcare consumers (56 percent) showed an interest in payment plan options, with patients across all demographics reporting interest in paying medical bills not covered by insurance using a payment plan. Younger patients show significantly greater interest in payment plans than older patients, with younger consumers becoming more interested in payment plans for typical visits. This group’s interest rose from 32 percent in 2020 to 40 percent in 2021.

The industry is changing, consumers are looking for control in both how much they pay and how they pay it — and providers are learning that caring for patients’ financial wellness is part of the whole treatment package.