Deel × US Healthcare
Intro
That’s an experiment of how company X can disrupt market Y. In the last years, I’ve started to see patterns of how the company is behaving in a market and eventually what culture this company have. It’s not Uber for X, it’s more like Soren Iverson’s newsletter “What If” but on a company × market scale.
How entering a completely new market could fix US Healthcare and get plus $500M valuation to Deel.
Deel’s mission is to “shrink the world” or “remove barriers to hiring people from any country” — none of this could work in healthcare as every country has their own rules and laws.
So, let’s stretch our knowledge of Deel into a “highly ambitious company driven by a vision of change the world”. On the other side, Healthcare is still the largest employer in the US with above $1Trillion in payroll annually.
So how Dell could fix Healthcare? Deel is the largest value provider for startups and companies. All companies in the world are potential clients of Deel. What value is there inside healthcare? Insurance Billing. We’re talking about the part where the doctor is getting paid for their services. Part comes from Insurance and part could be billed from the Patient.
Now there are Medical Billers aka Hospital Billing Staff who are doing this. But there is a problem — a lot of their knowledge and actions are not unique — convert types of visits into codes and submit to the right Clearinghouse. And exactly this part is repelling all independent medical people: therapists, dieticians and others from working insurance. As soon as they have a sustainable client base — they will accept out-of-pocket only and go independent. This is worse — I had a customer interview with a Dietitian who closed her own business and went to work for a clinic where she earns less just because of the bureaucracy.
How it works
How Healthcare Payments Work with Candid Health | Out-Of-Pocket, link below
Here comes the power of Deel. Deel wants all Telehealth Staff (Partners) to be paid via Deel. But there is a classic marketplace problem: either Telehealth provider should get agreements with all insurance companies (in-network, out-of-the-network) and hire Partners or every Partner should have their agreements with all insurance companies. 30% of all physicians are LLC or independent.
The power of Deel could come from several aspects: first, Deel could hire these people on behalf of a Telehealth Provider, Deel could sell services of these people to several Telehealth providers, as they are independent of marketplaces and could sell their services to anybody (and this is the simplest way to “the largest company in the world”). But there will be questions about the responsibility of their work.
On the other side, Deel could simplify and automate medical billing for LLCs too — integrate insurance contracts (per state) sign everything in the shortest time possible and not hire anybody.
How Deel can achieve this? Thanks to other Y Combinator startups — Candid Health and Opkit. They are providing insurance checks and APIs for payout processing. At the same time, Deel can show their brand to all US Healthcare providers how things should be done.
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So the model could look like this:
- Deel Healthcare (DH) works with care providers LLC’s
- DH provide LLC with all paperwork automation as much as possible
- Deel provides LLC with payment solutions via Insurance as well as copay via Stripe and/or any other card processing.
Benefits
As a result, there will be more independent health workers who will work for themselves and there will be less bureaucracy for them about dealing with insurance and payouts. Clinics and hospitals, at first will be not happy about this, as they have “as it goes” for 100 years now, but eventually, such automation will be implemented for them too as they can use it. And there will be a 2d or even 3d wave of marketplace platforms like Nourish or Fay Nutrition.
Markets and How Much Money Are There
If counting all spending — 5 Trillion annually in the US is dedicated to Healthcare, 1 Trillion just for payroll.
Market Opportunity — focusing at the start on only 30% (and lower income per physician too!) will give an opportunity around $100B market size.
Capitalisation 1yr after launching by the Healthcare part could be $500M.
A good piece of the healthcare pie to disrupt?
Now is your, reader, turn
This one is another experiment for me. It was a lot of fun to write, talk with friends and fix things, but I need your comments and ideas on what industry and scaleup to explore next. Could it be Grammarly for Academia, Canva for Real Estate, Stripe for HRtech, Revolut for Transportation, Klarna for Government or Brex for Travel?
Links
How Healthcare Payments Work with Candid Health | Out-Of-Pocket (outofpocket.health)
Health Care Still Largest U.S. Employer (census.gov)
US Healthcare Industry 2023: Sectors, Trends & Statistics (insiderintelligence.com)
