An entrepreneur who started health benefits company Definity Health and sold it to UnitedHealth Group for $300 million is looking to shake up the health plan market again.
Minneapolis-based Bind has focused on redesigning health insurance to enable members to view treatment options and compare costs before making a decision. This gives employers the opportunity to offer a sustainable, attractive health benefit without compromising coverage or quality, according to the company.
Bind's approach to health insurance innovation has attracted big investors including Ascension Ventures, the venture arm of the Ascension health system, and UnitedHealth.
The company, which offers "on-demand" health plans, scored a $105 million series B funding round. Bind has raised nearly $250 million in capital in four years.
Bind was founded in 2016 by entrepreneur Tony Miller, who previously started two companies that he sold to UnitedHealth Group. One company, Definity Health, was sold to UnitedHealth Group in 2004 in a $300 million deal. He also founded healthcare consulting firm Carol Corp., which was sold to Optum, UnitedHealth’s health services arm, in 2011. The terms of that deal were not disclosed.
Bind started by administering health plans for self-insured employers. The company operates its self-funded administrative services only platform nationally for dozens of employers including Best Buy, Culligan, Lumen and Medtronic.
Enrollment in Bind grew eightfold from 2019 to 2020 and is expected to double from 2020 to 2021, company officials said.
Bind is different from traditional insurance as its plans feature no deductibles and no coinsurance, and members have the option to buy and activate additional coverage for certain non-urgent medical treatments at any point throughout the year, Miller told Fierce Healthcare.
Bind members can search for doctors or by condition on the MyBind app or by logging into the website, then see what's covered, clear prices for treatments and options of where to go before making an appointment.
“Bind was built on the belief that consumers deserve to see and compare costs in advance, so they can make informed treatment choices for their condition. And they should pay less for providers and treatments that have a greater potential to get them or keep them well,” Miller said.
For employers, Bind plans provide members with the opportunity to see clear, upfront prices that demonstrate improved outcomes so they can choose effective and efficient paths to health, company officials said.
In September, Bind released data that show its health plan outperformed risk-adjusted industry benchmarks; total cost (combined employer and employee) of Bind was 23% lower than the average benchmark and 11% lower than the highly managed benchmark. The results show that higher member engagement and better health plan design can lower costs for employees and employers.
The company is now diving into the fully insured health plan market for companies with more than 50 employees. Bind is launching immediately in the state of Florida. The company expects to serve more than 30 states with its fully insured offering by year-end 2021.
The company plans to use the latest funding round to rapidly accelerate its growth and expansion into the fully insured health plan market.
“To break the cost curve for both employers and employees, we went all in on building a health plan that provides the tools needed to see cost and quality comparisons, as well as treatment path options across conditions. And we removed unnecessary affordability barriers, like deductibles and coinsurance,” Miller said.
"Bind has proven when people have cost clarity, they buy more effective and efficient care—and that makes healthcare more affordable for everyone," he said.
Startups looking to shake up health insurance and benefits management are attracting attention from investors.
Ryan Schuler, managing director of Ascension Ventures, said Bind has progressed from an idea of leveraging data and technology to create a next-generation insurance design into a platform that is gaining market traction with employers and with members.
Investors bankrolled nearly $1.5 billion in funding deals for companies focused on employer benefits in the third quarter of 2020, according to CB Insights. Funding has skyrocketed by 241% compared to $429 million raised in the third quarter of 2019.
Big deals in this sector include Bright Health's $500 million round, Waterdrop, a health insurance crowdfunding platform, raising $230 million, and benefits administration platform Rippling banking $145 million.
Tech-enabled insurer Oscar Health scored a funding round for $225 million in June. The company has raised $1.5 billion to date, according to Crunchbase.
GoHealth, a Medicare-focused health insurance marketplace, nabbed a blockbuster initial public offering in July that raised $914 million.