Digital health benefits company Collective Health scored $280 million in a Series F funding round—bringing its valuation to over $1.5 billion. It plans to use the cash to scale its platform and make it more user-friendly to reach larger employer customers. For context, Collective Health helps employers and members identify, navigate, and pay for health benefits and digital health services all in one place.
Health benefits solutions are gaining major momentum amid the pandemic-induced digitization of healthcare:
- Digital health benefits companies like Accolade and Grand Rounds have been diving into M&A deals—a sign of their growth and increasing demand: Accolade acquired telehealth firm PlushCare in April, and Grand Rounds merged with telehealth giant Doctor on Demand in March.
- This growth has been largely fueled by their ability to provide a seamless digital experience, deliver transparency, and streamline clunky administrative processes. For example, customers who experience hiccups in their digital interactions with insurers tend to show less loyalty toward their insurance providers, per a recent Bain & Company analysis—which makes digital health benefits solutions more attractive.
As the cost of providing healthcare benefits skyrockets, health benefits solutions will become attractive partners:
- Health benefits cost for employers is expected to increase 4.4% by the end of 2021, and follows an upward trend, according to Mercer’s 2020 National Survey of Employer-Sponsored Health Plans.
- Employers expressed their mounting concerns over their ability to keep up with the costs of providing healthcare benefits for their employees. 87% think the cost of providing health benefits will become unsustainable in the next 5 to 10 years, per a recent April 2021 KFF survey.
- Solutions like Collective Health’s can address this pain point. Digital health benefits solutions can leverage their tech-driven platforms to slash excessive costs related to health benefits by analyzing claims data to recommend treatment options to members, and undertaking admin functions (like claims processing).