Employer Direct Healthcare, a company that connects members with specialty care, has rebranded as Lantern and is expanding into infusion care as it continues to build out its services for health plans and employers.
The Dallas-based company, founded 13 years ago, has been quietly and steadily growing in the specialty care space. Working with large employers like Hyatt Hotels, 7-Eleven and the state of Florida, Lantern serves hundreds of self-funded plans across more than 1,000 employers, representing about 6 million people nationwide. The company has facilitated more than 60,000 care journeys, including nearly 40,000 in the past two years. Lantern is on track to add nearly 2 million more members by the end of the year.
The company's network includes more than 3,000 surgeons and oncologists and over 1,500 facility partners.
Lantern offers supplemental healthcare benefits for employers, including access to specialty networks, bundled payments and centers of excellence. The company started with a surgical benefit solution and then expanded into oncology. Lantern says it curates a network of top-performing specialists to make high-quality care more accessible to members, even within driving distance for most individuals, while also lowering costs for employers and employees.
Lantern’s expansion to infusion therapy to provide nationwide access to both in-home and facility-based options marked an important milestone for the company, CEO John Zutter told Fierce Healthcare in an exclusive interview.
"It's an important moment in time for us. We've gone from being kind of a quiet leader in this center of excellence space to expanding now across specialty care capabilities, so including cancer and infusion," he said.
Changing the name to Lantern offered an opportunity for a brand identity that was "a little bit cleaner, brighter and more modern," he noted.
"I think it really represents where we're going. We're increasingly partnering with health plans. We announced our inclusion in the UnitedHealthcare hub last year, and we're working very collaboratively with a number of different health plans. We didn't want a name that suggested that we were exclusive to working directly with employers. We work with navigators, we work with health plans, we work with other ecosystem players. We wanted to reflect that kind of change in how we think about the landscape and our position in it," he said.
The new company name also reflects its corporate values, which spell out the word "light"—logic, inclusion, grit, humanity and truth—Zutter noted.
"We wanted a name that really spoke to values that we embody as an organization, as a team, and kind of live by every day," he said. "Healthcare also is really hard to navigate. It's complex. It's not well understood, especially by those who are our target members, those who are going through the complex health situations that matter most—surgery, cancer or infusions. We think of ourselves as a guiding light through that journey."
Lantern works with a number of ecosystem partners to expand access to services to more organizations, such as HealthJoy, Accolade, OneOncology and others.
Along with the new company name and new services, Lantern is also expanding its in-house clinical team. It hired former Teladoc Chief Quality Officer Jason Tibbels, M.D. as chief medical officer. Raymond Hwang, M.D., previously senior medical director at Hinge Health, also joined Lantern as vice president and medical director for Lantern Surgery Care. Hwang is an assistant clinical professor of orthopedic surgery at Tufts University School of Medicine and is a practicing spine surgeon at New England Baptist Hospital.
Lantern’s medical advisory board also recently expanded to include Troyen Brennan, M.D., former executive vice president and chief medical officer of CVS Health.
"We're excited to have Jason Tibbels joining the team, he brings a wealth of experience not only from his practice, but also from his experience in Teladoc. Teladoc created, in many ways, the example of how to grow first with employers, second through partners and create some degree of scale doing that," Zutter said. "He also has really important roles in the medical community itself from a quality perspective, and that speaks to really what's first and foremost to us around ensuring our patients are only going to the best quality. As we get into other specialty care categories, like oncology, like infusions, we wanted to make sure that we were equally investing and ensuring that we maintain the quality standards that we've had many years on the surgery side, and so continuing to invest in the clinical side of our business has been a core area."
Lantern's model is to focus on specialty care services that typically drive high costs for plan sponsors and employers but also have substantial variability in cost and quality of care. Surgical cases, for example, make up 20% of spend, driven by a small subset of employees. Employees have no easy way of finding the best care and struggle to navigate a complex system. Cancer care has the same challenges. According to Lantern's data, 2% of companies' member base with active cancer drive 20% of total healthcare spend and nearly 40% of those with cancer deplete their life savings to pay for their care.
Lantern aims to steer members to high-quality care providers while also offering care advocates to assist them and help them navigate the system. Beyond its network's capabilities, Lantern also designed care teams to support patients with nurse navigators along with screening, diagnostics and second opinion services supporting members from diagnosis all their way through their treatment, Zutter noted.
The company also designed its platform to help drive down the cost of care. For its surgical services, for example, Lantern contracts at agreed-upon rates to drive significant reductions in cost per procedure.
Over the past 12 years, the company claims it has lowered overall healthcare costs for employer clients by a total of about $700 million since inception.
The company is now focused on bringing that same model to infusion care.
"Like surgery and cancer treatment, infusion therapy is an area where employees are not getting the best care—and employers are not getting the best deal. It’s time that changed. With our new brand, new infusion offering, and top clinical talent joining our team, we’re delivering on our promise to ensure top-tier specialty care isn’t reserved for the lucky few," Zutter said.
For large employers, the price of covering infusion therapy continues to skyrocket due to the high cost of delivering infusions in a hospital setting. And despite the rise of ambulatory infusion centers and safe in-home options, hospitals remain the default, costing employers upward of $75,000 per employee a year on average for those undergoing treatment for cancer or autoimmune disorders.
"A great number of infusions are still done in a hospital setting, and for some patients that's appropriate. For many, being able to do that in an ambulatory infusion center around the country conveniently would be a great choice, and much more cost-efficient. Being able to do so in the convenience of your home for the right patients can also be more convenient, more cost effective. We wanted to create that affordable and convenient access to specialty care for the people that really need it most," Zutter said.
Studies have shown that, for low-risk patients, receiving infusions in the home or in a high-quality ambulatory infusion center leads to outcomes as good or better than the hospital.
Through partnerships with infusion therapy providers across the country, Lantern's infusion care service gives members nationwide access to top-tier facilities within driving distance that offer more focused nurse attention, as well as at-home, 1:1 care when clinically appropriate. By negotiating prices at the individual drug level and contracting across a range of site of care alternatives, Lantern and its partners can save employers upward of 50% compared to what they typically pay while delivering care safely, according to the company.
There is a growing list of players in the special care market, including Transcarent and Carrum. Zutter contends Lantern offers a differentiated approach.
"When we think about constructing our network, we think accessibility is critically important, and so we really differentiated by being much more locally accessible. We have a surgeon-first or specialist-first approach and how we think about quality, and obviously coupling that with a review of facilities, but not just resting on quality alone, and that's how you're able to deliver world-class care in a community. And then obviously supporting that with providers like Johns Hopkins and Cleveland Clinic and other national institutes. That local-first orientation is a key differentiator," he noted.
While other companies have extended their capabilities into areas like virtual care and pharmacy, Lantern has "stayed true" to its core focus while partnering with other organizations to expand its services. "In the virtual physical therapy space, we work with folks like Hinge Health and Sword Health. We won't try and enter those spaces because there are great solutions. We can partner with them. Where we will enter as a product extension is really around the specialty care continuum and things that require that network capability," he said.
In December, Lantern picked up $92 million in secondary investment from Insight Partners, bringing its valuation to $1 billion, hitting "unicorn" status. The company's existing institutional investors, Serent Capital, Redmile Group and Dundon Capital, maintained their ownership interest in the business.
At the time, the company said it would use the funding to expand its oncology solution and several key partnerships with national health plans, navigators and other industry-leading employer solutions.
Lantern did not disclose details about its financial performance, but Zutter acknowledged that the company is profitable.
Going forward, Lantern plans to stay focused on its "narrow lane of specialty care," Zutter noted. "We want to be a household name in the specialty care space, meaning those low frequency but scary moments that matter most to patients. We want to really continue to focus on those areas and make our services available, not just in the large enterprise ASO market to large employers, but also to smaller employers, to fully insured populations, partnering in a more comprehensive fashion with industry players to bring our services to bear to a greater portion of the American workforce," he said.