Startup health plans target the public and private exchanges

The Fourth Industrial Revolution merges the physical, digital and biological worlds. The need for human connections has never been greater. With virtually unlimited possibilities business model shifts are occurring across every industry including healthcare. How we work and communicate is undergoing a profound paradigm shift – asking every member of society to rethink their values and goals. Startups are emerging leveraging virtual care platforms to predictive analytics with visions of revolutionizing the consumer experience.

These healthcare startups are attacking the edge of healthcare capturing the attention of patients and their loved ones. For example, Apixio is focused on care delivery and quality measures with their cognitive computing platform to increase Medicare Advantage (MA) risk adjustment accuracy, proficiency, and productivity. Pieces Technologies offers population health solutions with predictive analytics. They provide end-to-end monitoring, prediction, documentation & discovery software for health systems and community-based organizations. Lantern, focuses on online mental health wellness services and products. Medicast is helping hospitals and health systems bring back the house call. This new platform offers care delivery for the on-demand age. Medicast helps hospitals and health systems modernize their care delivery networks with sophisticated, easy-to-use technology that has been designed in collaboration with patients and physicians. Health insurance exchanges will need to partner with technology innovators to survive.

Despite U.S. Department of Health and Human Services confirmations that marketplaces will continue to grow – it may be nearly impossible with limited plan choices, increased prices, and consolidated competition. Roughly 13 percent, 1.6 million of the 12.7 million who enrolled by the end of March 2016 didn’t renew their coverage. Plan drop outs were largely due to unpaid premiums. Apparently, even small price increases matter. Meanwhile, California rates to increase 13.2% for 2017 , meanwhile the Vermont exchange rejected a vote to increase rates by 8 to 10 percent for 2017. Apparently, even small price increases matter. Consumers will soon be forced to select plans network that contains fewer providers and contain limited plan offerings. According to an analysis by Avalere, health plans offering preferred provider organization (PPO) networks in 2016 dropped from 39 percent to 27 percent; representing a 31 percent decline over the last three years. Will competition increase when Aetna acquires Humana or Anthem takes over Cigna? Doubtful.

There continues to be a mass exodus from health exchanges, making room for startups. Exchanges have been so focused on not drowning; they forgot that survival involves more than making payroll. Health plans are critical to exchange success. The problem is health plans are running for the door. UnitedHealth Group will be exiting 26 of the 34 insurance exchanges where it operates sighting expected 2016 losses of $650 million. Some markets to be impacted from UnitedHealth Group’s exit include Alabama, Arkansas, Colorado, Connecticut, Georgia, Louisiana, Maryland, Michigan, Missouri, Nebraska, North Carolina, Oklahoma, Pennsylvania, Tennessee, Texas, Washington, among others. Stabilization is going to be slow when 795,000 consumers lose coverage and must find new plans (and likely more expensive plans). Blue Cross Blue Shield of Minnesota (dropping PPOs only), starting in 2017. In 2015 the Blues reported a $265 million loss from the individual markets impacting 100,000 consumers. HealthyCT, in Connecticut, was recently placed under an order of supervision requiring all 40,000 HealthyCT consumers to select new plans. This brings the total Connecticut carriers onAccess Health CT for 2017, down to two. Collectively not a good story for consumers expecting choice in 2017.

Health insurance exchanges need to reconsider what makes themselves effective from the consumers’ perspective, and which partners are required for success.

Article originally published in Health Insurance Marketplace News in July 2016.


Buzz, B. (2015). Calling all Healthcare Startups in Odisha (online image). Retrieved from

Nichol, Peter B. (2016). Thought Leaders’ Corner: What does the future hold for small businesses in the public and private Exchange markets. Health Insurance Marketplace News, Volume 4 (Issue 12), 2.

Peter B. Nichol, empowers organizations to think different for different results. You can follow Peter on Twitter or his blog Leaders Need Pancakes. Peter can be reached at pnichol [dot]

Previous articleFinding innovation while universities brace for tightened enrollment through 2025
Next articleThe new gig economy: Shared and collaborative
Peter is a technology executive with over 20 years of experience, dedicated to driving innovation, digital transformation, leadership, and data in business. He helps organizations connect strategy to execution to maximize company performance. He has been recognized for Digital Innovation by CIO 100, MIT Sloan, Computerworld, and the Project Management Institute. As Managing Director at OROCA Innovations, Peter leads the CXO advisory services practice, driving digital strategies. Peter was honored as an MIT Sloan CIO Leadership Award Finalist in 2015 and is a regular contributor to on innovation. Peter has led businesses through complex changes, including the adoption of data-first approaches for portfolio management, lean six sigma for operational excellence, departmental transformations, process improvements, maximizing team performance, designing new IT operating models, digitizing platforms, leading large-scale mission-critical technology deployments, product management, agile methodologies, and building high-performance teams. As Chief Information Officer, Peter was responsible for Connecticut’s Health Insurance Exchange’s (HIX) industry-leading digital platform transforming consumerism and retail-oriented services for the health insurance industry. Peter championed the Connecticut marketplace digital implementation with a transformational cloud-based SaaS platform and mobile application recognized as a 2014 PMI Project of the Year Award finalist, CIO 100, and awards for best digital services, API, and platform. He also received a lifetime achievement award for leadership and digital transformation, honored as a 2016 Computerworld Premier 100 IT Leader. Peter is the author of Learning Intelligence: Expand Thinking. Absorb Alternative. Unlock Possibilities (2017), which Marshall Goldsmith, author of the New York Times No. 1 bestseller Triggers, calls "a must-read for any leader wanting to compete in the innovation-powered landscape of today." Peter also authored The Power of Blockchain for Healthcare: How Blockchain Will Ignite The Future of Healthcare (2017), the first book to explore the vast opportunities for blockchain to transform the patient experience. Peter has a B.S. in C.I.S from Bentley University and an MBA from Quinnipiac University, where he graduated Summa Cum Laude. He earned his PMP® in 2001 and is a certified Six Sigma Master Black Belt, Masters in Business Relationship Management (MBRM) and Certified Scrum Master. As a Commercial Rated Aviation Pilot and Master Scuba Diver, Peter understands first hand, how to anticipate change and lead boldly.