February 21, 2019

Centivo Rethinks Employer-Sponsored Health Insurance

by Chas Roades and Lisa Bielamowicz MD


Over the past year, we’ve had the opportunity to get to know Ashok Subramanian, the CEO of health insurance startup Centivo, and to meet periodically with his team to provide informal advice as they build their business. Centivo is one of a new cadre of innovative companies looking to redesign health insurance; along with companies like Oscar, Bright Health, and Bind, they’re working to address the inefficiencies and shortfalls of traditional health insurance. Centivo has focused primarily on the self-insured employer space, leveraging consumer engagement tools, customized network assembly, and an emphasis on primary care and prevention to help employers reduce the growth of healthcare spending. Last summer, Centivo raised $34M in Series A funding from Bain Capital Ventures and others to support their market launch.

Prior to Centivo, Ashok co-founded Liazon, operator of the nation’s industry-leading private benefits exchange for active employees. Liazon was acquired by Willis Towers Watson in 2013, and after the acquisition, Ashok served as Managing Director for Willis Towers Watson’s Group Exchange business. Prior to Liazon, Ashok was an Associate Principal at McKinsey and Co., where he served as a leader in the firm’s healthcare and private equity practices. In addition to his role at Centivo, Ashok serves as an independent Board director at Artemis Health as well as a senior advisor to Silversmith Capital, a growth equity firm. Ashok received his undergraduate degree from Princeton University, a Master’s degree from Stanford University, and an MBA from the Stanford Graduate School of Business.

Our conversation with Ashok Subramanian, CEO, Centivo


Gist Healthcare: Tell us about what you’re building with Centivo. How will the experience be different for employers and consumers?

Ashok Subramanian: Centivo is a new type of health plan administrator that allows self-funded employers and clinicians to join forces and deliver high quality, affordable healthcare to their employees. An alternative to traditional insurance carriers or third-party administrators, Centivo is a coordinated benefits platform that offers the technology, network, claims processing, and customer support to fully administer health benefits for all or a portion of an employee population.

The Centivo model emphasizes the partnership between individuals and their primary care team as the proper model to coordinate healthcare needs. Centivo’s clinical partners are dedicated to controlling costs and helping members navigate the healthcare system, aided by personalized patient-doctor matching tools. We find great clinicians, partner with them, and compensate them beyond the traditional fee for service model, with rewards tied to healthcare quality, total cost of care, and patient satisfaction.

Employers get lower and transparent costs, happier, healthier employees, and a better experience. What makes it better? A more proactive partner who’s facilitating great access to care and trusted relationships between employees and the clinicians in their community. We make it easy for the employer to integrate Centivo into the organization with a high-touch implementation process, simple employee communications, and concierge level support.

The Centivo model emphasizes the partnership between individuals and their primary care team as the proper model to coordinate healthcare needs.

Consumers get a better experience as well, and lower, more predictable costs. They get high-quality care and support in navigating the healthcare system. And they get lower costs and peace of mind in knowing what they are going to pay before they go to the doctor. For many employed Americans who have been facing increasing deductibles, high out-of-pocket costs, and surprise bills while dealing with stagnant paychecks, and don’t have several thousand dollars socked away for an emergency, this is a critical need.

GH: This is not your first experience in launching a company, having successfully launched Liazon, a private insurance exchange. What did you take from that experience that is informing your work at Centivo? 

AS: At Liazon, we offered consumers choice in their health plans, supplemented with education and decision support. What we learned was that many people were happy to trade off some flexibility in exchange for lower costs. More people picked high-deductible health plans and narrow-network plans than their employers would have expected. And at the end of the day, they were happy with their choices – one year later, over 95 percent would have picked the same plan again. But choice in existing plans could only go so far. We realized that to really make a difference for employers and employees, it wasn’t enough to offer choice, that we had to get deeper into how healthcare is organized, consumed, and delivered.

Centivo was founded to reduce costs and deliver ongoing sustainability to employers and affordable, high-quality healthcare to the millions of Americans who struggle to pay their healthcare bills. Our name – Centivo – is rooted in the word “incentive”, to emphasize our intent to re-align incentives in healthcare among employers, employees, and leading clinicians. Aligning incentives, by making cost and quality transparent and having all parties share in total cost of care savings, is the only way to unlock real and enduring value.

GH: While many other insurance start-ups have launched in the individual or Medicare Advantage markets, Centivo has entered the highly-competitive group market, which is dominated by large, incumbent players. Why did you choose to start here? 

AS: Simple – that’s where the need and the lack of innovation is. The individual and Medicare markets are growing, so we’ve seen many new entrants innovating there, but the group market has remained stagnant for too long. We see the incumbents dabbling in innovation in the group space, but their attention is divided and, in many respects, while they have positive intent, their hands are tied given legacy technology and contracting constraints across their lines of business, and their sheer size. In contrast, we’re able to put our full focus on serving the self-insured employer and their employees.

GH: How will Centivo work with doctors, hospitals and other providers? How are you thinking about networks and performance?  

AS: Over the past twenty years, we’ve seen consolidation within the insurance carrier sector. These larger enterprises bring scale and a “national solution”, but healthcare is delivered locally, and network dynamics vary community by community. Our goal is to design networks organized to best meet the needs of each client’s employee population.

Our network consists of directly-contracted “Centivo Select” providers in addition to broad foundational networks. We contract directly with high-performing practices and/or health systems in priority areas. In some markets, we start with primary care practices and then extend these contracts into key areas of costly and high-variation spend including musculoskeletal, oncology, cardiovascular, and diabetes. In other markets, we partner with health systems that are already structured to bring a high-quality and fully-integrated solution to that market. In both cases, we identify physicians and systems who are committed to providing high-value care and an improved patient experience. Providers must meet Centivo quality standards and expanded access criteria to qualify for inclusion in the Centivo Select network.

The mistake some make is in assuming that their employees aren’t ready to embrace change. Employees, who feel the full brunt of rising healthcare costs and deductibles that are larger than their savings, are more  ready for alternatives than their employers give them credit for.

Centivo Select Providers coordinate downstream care for their patients.  Where appropriate, we arm them with data and AI-derived analytics so they can refer to the best providers and enable more precise, personalized physician matching for patients around key episodes of care.

A very important point here: people listen to their doctors when it comes to their healthcare. And that’s how it should be. So instead of creating a whole new industry of confusing entities and intermediaries trying to intercept that relationship, we partner with clinical teams to help them do their jobs even better.

GH: For years we’ve seen employers tinkering around the edges with new benefit designs and direct contracting, but the majority of the market  is still very much locked into a traditional insurance model based on broad choice and large networks. What will it take to bring employers to a tipping point to really rethink health benefit design? Can that happen while the economy remains strong? 

AS: Employers are cautious when it comes to healthcare. And rightfully so – it’s a high-stakes, emotional, and sensitive area.  But there’s no need for an employer to move all their employees to a new, radically different benefits design in one shot. Self-insured employers especially have the flexibility to introduce choice and let their employees choose what’s right for them. The mistake some make is in assuming that their employees aren’t ready to embrace change. Employees, who feel the full brunt of rising healthcare costs and deductibles that are larger than their savings balances, are more ready for alternatives than their employers often give them credit for.