Focus on the best, get rid of the rest: How Centivo builds networks around the highest-performing providers

As hospitals evolve into integrated systems, Centivo is designing networks to evolve with them. 

The startup, which administers self-pay commercial plans, was created in 2017 and has scored investments from Morgan Health and others. 

Alan Cohen, co-founder of Centivo and chief product officer, sat down with Becker's to explain the company's approach to building high-quality networks. 

Centivo administers self-pay plans for around 70 employers, covering 50,000 members. Mr. Cohen said Centivo is focused on creating "partnership plans" with the company's proprietary network and around finding the "highest-value" provider in an area. 

"I think if you want to focus on the best, you've got to get rid of the rest," Mr. Cohen said. 

Centivo typically partners with ACOs or clinically-integrated networks that have succeeded in Medicare shared-savings and can provide for most healthcare needs in one system, Mr. Cohen said. 

"This is something that couldn't have been done even 10 or 20 years ago, because back then, hospitals were hospitals," Mr. Cohen said. "Now they've developed their own microcosm of the whole healthcare community." 

For example, in New York City, Centivo's network is built around Mount Sinai Health System, Mr. Cohen said. Starting with a high-value system, Centivo members access primary care, often in a patient-centered medical home model. 

"This isn't like your father's primary care from 20 years ago. These are new age-organizations that are built around team-based medicine, integrated behavioral health, 24/7 access to a clinician, and they are part of a clinically integrated network," Mr. Cohen said. "That advanced primary care provider can really guide the patient through that fully integrated clinical network." 

For most plans the company designs, primary care visits have no cost sharing, Mr. Cohen said. 

The company doesn't design high-deductible plans, which Mr. Cohen said leave many workers "functionally uninsured." 

"High-deductible health plans with HSAs are a wonderful innovation for people who have significant assets and significant income and are able to afford a $5,000 deductible and $10,000 out-of-pocket [limit]," he said. "They are not good innovations for people who are not able to." 

The insurance industry's 'status quo bias' 

Centivo currently has networks in 16 states and operates virtual primary care in 15 states. 

Mr. Cohen said they've been able to create networks in a lot of markets, but the high-value network can't work in every area. 

"You have to have some level of healthcare competition," Mr. Cohen said. "In some rural areas, where there's a dominating health system, they might not have chosen to focus on value; they might have chosen to focus on something else." 

The company's growth strategy is to expand in the markets where it already serves employers, and to expand to new areas where it can compete with existing administrators. 

Centivo, currently a third-party administrator rather than an insurer, could move into taking on more risk in the future, Mr. Cohen said. 

The greatest challenge when starting a new business in the health insurance industry is status-quo bias, Mr. Cohen said — but things in the industry can evolve quickly. 

"No one would have thought that this company called United Healthcare, which no one ever heard of, would be the largest insurer. No one ever thought that the Blue Cross [companies] would band together and go for-profit, right? This can change quite often," he said. 

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