Plug and Play launches health accelerator in Northwest Arkansas

Health care leaders are turning to digital health to increase consumer access and engagement. Industry leaders spoke Tuesday (Aug. 20) in a panel discussion on digital innovation to improve employee health.

The panel was part of the launch event for the Plug and Play Northwest Arkansas Health Accelerator in downtown Bentonville. Over the past five years, the Sunnyvale, Calif.-based venture capital firm has focused on supply chain investments and accelerators in Northwest Arkansas.

About 125 attendees and a dozen digital health and insurance startups from across the United States participated in the launch for the new health accelerator. The event convened startups focused on consumer health and self-insurance.

In the coming weeks, Plug and Play will announce participants for the 12-week accelerator. The launch event included startup pitches, 1-on-1 sessions, discussions about market trends, and insights from industry leaders on new technologies to improve employee health and wellness, increase health care affordability and access, and reduce health care costs.

In the panel discussion moderated by Ryan Cork, executive director of health care transformation for the Northwest Arkansas Council, Marcus Osborne, executive chairman for New York City-based musculoskeletal health startup RightMove Health, highlighted the design challenges of the U.S. health care system.

“The system was not designed to drive real consumer engagement,” Osborne said. “When you don’t get consumers to engage, you don’t get good outcomes.”

He said companies, especially in digital health, are looking to innovate to drive consumer engagement. Some of the challenges include health care affordability and accessibility and “fundamentally making care simpler.”

Osborne said large employers have told him that health care costs are exceeding the growth rate in their earnings before interest, taxes, depreciation and amortization. The costs are also their No. 1 expense item.

He said another challenge is to “reduce the friction that enables innovation and those who need the innovation to come together faster to get the benefits of what’s out there.”

Before he joined RightMove, Osborne was senior vice president of health transformation at Walmart. While there, he learned that “people don’t know where to go when they’ve got an issue and aren’t getting the right answers…evaluation…diagnostics… They don’t know what’s really going on, and they’re not being put on the right care plan.” Seeking a solution for this led him to RightMove.

Cal Kellogg, chief strategy officer for health care insurance company Arkansas Blue Cross Blue Shield, said the company’s involvement in digital health goes back to when it was one of the first in Arkansas to offer electronic claims submissions. Before the COVID-19 pandemic, he said the company was looking at ways to increase consumer access. It’s looked to digital services to support consumers who more often need care after hours, not just from 8 a.m. to 5 p.m.

He said demand for virtual health care was strong during the pandemic, but it’s since moderated for primary care. However, demand for virtual behavioral health care has remained strong.

“What we’re looking at is how to leverage that and then start to integrate the behavioral health with the physical health to get to whole person care because the two components are kind of still disconnected,” he said. “And we’ve got to figure out how to do things a little bit differently.”

He said the company is working with a startup to improve access for behavioral health patients by scheduling appointments when they want them. He added that scheduling virtual physical therapy appointments for musculoskeletal patients when they want them could help them avoid surgery.

Laura Wallace, director of total health for Fort Smith-based transportation company ArcBest, said the company is self-insured and self-administered and pays its health claims in-house.

More than a decade ago, the company started its wellness focus with the idea that investing in wellness would mean that employees wouldn’t get as sick. In 2017, it offered physicians on-demand and second-opinion services. In 2019, it introduced virtual primary care. Other services the company added included at-home screenings, musculoskeletal care and increasing access to behavioral health. The company does annual employee surveys to ensure the care that’s provided is what they want.

“I think one important thing to us (is) most of our digital health solutions, there’s no cost to the employee for those,” Wallace said. “So when you talk about affordability and people having the consistent care that they need, those are things we really felt like were important. So…through COVID we removed some co-pays, but we just decided that people were getting the care that they needed through some of those solutions. And we maintained those at zero co-pay.”

Before the panel discussion, Julianne Roseman, principal of Health Ventures for Plug and Play, spoke about health care industry trends, including insurance, regulatory changes and consumer demands.

Roseman explained the popularity of self-insured plans for employers and that they allow employers to create the best plan for their employees. She noted that being self-insured comes with risk because employers must plan for employee health costs.

She said recent federal laws are trying to allow consumers to comparison shop for health insurance, but it’s complicated to do. Another new program allows employers to set aside money for their employees to spend it on health care as needed.

She said that, following regulatory changes, employees are suing employers amid rising health care costs and stagnant wage growth. Employee health insurance premiums and prescription drug costs have been rising, and they’re blaming employers. However, she noted that employers also face increasing costs outside their control.

Roseman said the Biden administration’s price cap negotiations for the top 10 drugs on Medicare will impact the rest of the market “because now we know what those prices are, and I don’t think anyone’s going to pay $1 more for a drug now that we have these set prices.”

She said that regarding consumer trends, self-service and personalized care have become more prevalent. Consumers have more options to receive care, whether virtually or at a clinic. They also have a range of care options, from inexpensive to premium services and treatments.