Healthcare
See the 15-slide presentation Hint Health used to sell its vision of cutting insurance companies out of primary care
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- Hint Health’s software helps direct-primary-care providers manage patients and process payments.
- Patients pay their doctor a flat monthly fee to get primary-care services without billing insurance.
- Hint Health raised $45 million in June led by Banneker Partners and Frist Cressey Ventures.
After working together at WellnessFX, a consumer blood-testing startup, Zak Holdsworth and Graham Melcher wanted to start a company that could transform the foundations of healthcare.
So, Holdsworth said, they started running ideas through a self-created rubric.
“If, in theory, every American had this type of thing, would it shift the system in such a way that it would eliminate the 20% to 30% of total cost-of-care spend that is wasted, improve outcomes, and actually improve the patient experience and physician experience?” Holdsworth said. Most of their ideas, he said, failed this test.
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Then Holdsworth and Melcher came across direct primary care. Holdsworth said he thought the model, in which patients pay their primary-care provider a monthly membership fee directly rather than through an insurance company, “could be really transformational at scale.”
Holdsworth and Melcher created Hint Health in 2013 to provide software to practices pushing into direct primary care, with tools for enrolling, managing, and billing patients.
Hint Health
Services in direct primary care typically include annual wellness visits, acute care for sickness, medication management, and even lab testing. Specialty care isn’t included in the model.
These practices tend to make less money but also have lower administrative burdens, since patients pay them directly. Patients also tend to see their providers more consistently, and for longer visits, since those practices typically take on fewer patients.
In June, nearly nine years after its founding, Hint Health banked $45 million in fresh capital led by Banneker Partners and Frist Cressey Ventures. The raise brought the startup’s total funding to $60 million, according to PitchBook.
Holdsworth said he thought the boost of capital represented not only that Hint Health had proved its business model but that more practices were trying direct primary care and demonstrating its viability.
“What we’re starting to see is the data consistently showing that if you do this properly, it actually works,” Holdsworth said. “Patients love it, doctors love it, outcomes improve, and the total cost of care drops.”
Hint Health shared with Insider the presentation it used to raise $45 million in June. The startup removed detailed financials and client information that isn’t public before Insider’s review.
Here’s the presentation Hint Health used to raise $45 million.
Hint Health helps providers that practice direct primary care manage their businesses with software to automate tasks like patient enrollment and billing.
Hint Health
With direct primary care, patients pay a monthly flat fee to a primary-care practice to receive care including annual checkups and prescriptions. The doctor’s office doesn’t take insurance.
Hint Health
Because the office doesn’t take insurance, the provider doesn’t have to deal with processing insurance claims.
Hint Health
This memo from the American Academy of Family Physicians explains more about the direct-primary-care model.
“Insurance is not a bad thing,” Holdsworth said. “We just don’t think insurance, and especially fee-for-service insurance, should be used to pay for 80% to 90% of care.”
Hint Health
Holdsworth said those practices often increase their monthly fees as members get older but don’t charge more for sick patients than they do for healthy patients “as a general rule.”
Hint Health
Hint Health says that, on average, the practices using its platform charge patients $75 a month for a membership.
Hint Health
Holdsworth said practices pay a base fee to use the HintOS platform based on the size of the practice, plus monthly fees per member managed through the software.
Hint Health
Holdsworth said Hint Health also collects a fee on payments processed through its software.
While Hint Health primarily works with independent practices, Holdsworth said, some health systems with direct-primary-care offerings have adopted the software.
Hint Health
The startup launched Hint Connect in February as a national network to connect employers with Hint Health’s ecosystem of providers.
Hint Health
Hint Health charges employers and employer groups a fee to access the startup’s network, Holdsworth said.
Hint Health
Holdsworth said Hint Connect is useful for employers with employees in multiple states, allowing the employers to set up several subcontracts to get their employees memberships in a direct-primary-care practice in their area.
Hint Health
Hint Health’s customer- and revenue-retention rates have been fairly consistent over the years. That predictability, Holdsworth said, was a selling point for investors.
Hint Health
Holdsworth said the $45 million raise — substantially larger than Hint Health’s last funding round, of $5 million, in 2021 — coincides with more data emerging to support direct primary care’s potential to cut total healthcare spend.
Hint Health
An overview of direct-primary-care literature that was published in 2020 and cites dozens of studies found that direct primary care frequently reduced the total cost of care and gave people expanded access to their primary-care physician.
Holdsworth said Hint Health now processes close to $600 million in patient payments every year through its software.
Hint Health
Holdsworth said that while the startup hadn’t explored merging with another company or getting acquired, he’d be “very open” to deals with players that share Hint Health’s vision.
Hint Health