Collective Health wants to turn employers into their own health insurer

Collective Health

Collective Health is on a mission to change the healthcare system. The goal of this San Mateo, California-based startup is to cut out the insurance company middleman and allow companies to create their own insurance plans for employees. “We’re building a complete solution to replace your employer health insurance,” writes Collective Health founder Ali Diab at the company’s website.

Collective Health has paid for access to physicians in a large California PPO network that connects it with 95% of the doctors in California and 90% of the doctors in the U.S.According to Diab, the current state of the U.S. healthcare market is a mess with one-fifth of the GDP going towards paying for something where there is no clarity on why things cost what they do. At the same time, the customer experience of interacting with a health insurer feels like “entering a time warp back to 1980.”

Collective Health comes to the rescue for the companies who agree to their terms. And these would preferably include those employing between 100 and 1,000 people. For these employers, Collective Health will provide modern digital tools that are available across platforms, both desktop and mobile; and the same goes for employees who also get to benefit from on-the-go access to their plans. Relying on an easy-to-grasp UI, employees will be able to select what they exactly need.

In terms of available doctors, Collective Health has paid for access to physicians in a large California PPO network that connects it with 95% of the doctors in California and 90% of the doctors in the U.S. So, chances are employees will be able to go to their own doctor for treatment.

In the future, Collective Health will add health service and procedure cost comparisons to the sites for both employers and employees.At the moment, Collective Health is working with five clients to help them set up insurance programs for their employees. Under the deal, the employer will take on all of the risk and cover all the losses with its own insurance.

Going forward, the company hopes to add health service and procedure cost comparisons to the sites for employers and their employees. A mobile payment option is also in works.

Collective Health has already raised its seed round, though it’s unclear just how much money they managed to secure. What we do know is their investor list; it includes Formation 8, The Social+Capital Partnership, as well as some prominent angels, like PayPal investor and board member Scott Banister, and PayPal co-founder Max Levchin.