Thursday, March 19, 2015
Collective Health believes the answer to the problem of out-of-control health care costs starts with employers. Today, 150 million Americans receive health insurance coverage through their employer.
San Mateo, California-based Collective Health helps employers cut out the insurance company middleman and create their own insurance plans for employees.
“One-fifth of our country’s GDP goes toward paying for something where there is no clarity on why things cost what they do,” Collective Health founder Ali Diab said, “and the customer experience of interacting with your health insurer feels like entering a time warp back to 1980.”
The company talks to employers about which health services they want to cover for employees, then it sets up an easy-to-use interface where employees can select what they need.
The idea apparently has legs, and some high-profile investors have now placed bets on the company.
Collective announced today that it has raised $38 million in a round led by Founders Fund and NEA (New Enterprise Associates). Formation 8, Redpoint Ventures, RRE Ventures, Subtraction Capital, and Rock Health also threw in.
Collective Health stated the new funding will enable it to “meet the rapidly growing demand for its employer self-insurance platform.”
The startup is still very young — it was founded in 2013 and exited stealth mode only in August 2014. But it has a big job in front of it this year: It currently serves only California-based employers, but it says it will be expanding its geographic coverage nationally starting in 2015.
venturebeat.com
