The (Self-insured) Employers are Coming

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Livongo’s upcoming IPO is big news. It is one of the few IPOs to come from the large amount of funding that has gone into the digital health space. According to Startup Health, $14.6 billion of venture funding was pumped into digital health startups in 2018 alone. Investments over the last decade in the space have led to relatively few success stories in the form of IPOs or significant exits. In fact, Livongo’s IPO ends a three year drought for digital health IPOs.

In addition to the good news for Livongo and its investors, the IPO further highlights the growing success of companies that cater to self-insured employers. While the majority of digital health companies sell to providers (health systems, hospitals, clinics, SNFs, etc), payers (health insurers, Medicare, Medicaid), or manufacturers (pharmaceutical and medical device companies), a growing number now focus on selling to employers who take on the risk of insuring their own employees, and pay their medical bills directly instead of contracting with traditional health insurers like UnitedHealth or Anthem. Large and smaller companies alike have entered into the business of healthcare to try to reign in rapidly rising costs.

This trend is accelerating, with rising healthcare costs leading to employers that want more transparency into, and control of, how employees use their healthcare benefits. The share of self-insured employers has grown by more than one-third since 2010, according to the Employee Benefit Research Institute. Today, 91% of employers with more than 5,000 employees are self-insured. While that number drops down to about 50% for companies with 200 to 1,000 employees, the share of smaller employers moving to self-insured models is also increasing. In fact, more and more employers are entering into Administrative Services Only (ASO) contracts with traditional health insurance companies, where the insurers only perform specific administrative tasks such as plan enrollment and claims processing, while the employer pays the actual medical bills.

At SalesBetty, as a result of this shift of risk to employers, we are seeing a growing number of our own users shift their focus to sell to these self-insured employers. For example, one telehealth company uses SalesBetty’s Relationship Mapping tool to identify and reach out to VPs of Wellness and Employee Benefits at large employers, who their current customers and champions know well.

Livongo focuses on net promoter score as a driver of their growth

Livongo focuses on net promoter score as a driver of their growth

As more companies sell to employers, they are finding that they typically have shorter buying cycles and less convoluted decision-making processes (ie. fewer decision-maker sign-offs) than provider and payer organizations. While the decision-making process may be faster and simpler, selling to them does necessitate a deep understanding of their buying motivations, especially around user (employee) satisfaction. While employers care about lowering healthcare costs, they also see employee benefits such as digital health apps, wellness programs, gym memberships, and fertility benefits as ways to recruit and retain talent. This is especially true in competitive labor markets in industries such as tech & finance. This means that successful digital health companies in this space will need to prove the triple goals of ROI, improved health outcomes, and user satisfaction, with a bigger emphasis on the last. In Livongo’s case, they tout their net promoter score of +64, a sign of high user satisfaction. To successfully sell to employers, no longer is it enough to treat user satisfaction as a nice to have, instead it is often the main buying decision driver for employers as they seek to purchase tools that engage and keep their employees happy.


Engineering Serendipity in Healthcare Sales

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At SalesBetty, we consistently hear the same pain point from healthcare marketing and sales teams - they spend months or years chasing deals that keep getting pushed back, and many “sure thing” prospects ultimately never close. Whether the customers are providers, payers/health insurers, life sciences, med device, or employers, anyone who works in healthcare sales is familiar with the long sales cycles, many stakeholders, and frustrating bureaucracy of selling into enterprise healthcare. In a survey conducted by SalesBetty of B2B health technology companies in 2018, their average sales cycles were 13 months, and each new customer had a Customer Acquisition Cost (CAC) of $180k. According to the Harvard Business Review, 63% of B2B salespeople across industries are under-performing, and we hear similar statistics in healthcare specifically.

We attribute this underperformance to the often used "spray and pray" method of lead generation - marketing and sales teams contact as many people as possible in the hopes that a small fraction might convert into a meeting. They do so despite knowing that their specific products and services are only relevant to a subset of the market. This inefficiency at the top of the sales funnel distracts teams with “doomed leads” and causes the notoriously long sales cycles in healthcare. Classic symptoms include many meetings but few deals, and estimated close dates that continuously get pushed back.

At SalesBetty, we encourage sales teams to move away from the “spray and pray” method by leveraging data and AI to generate what we call engineered “Sales Serendipity.”


What is Sales Serendipity?

Imagine a world where we could find new prospects, who at this exact moment, have the pain points that our products and services solve? This is Sales Serendipity. When done right, finding Sales Serendipity can free marketing and sales teams from non-productive outreach, accelerate deals, and delight prospects who ultimately turn into customers.

For example, one of SalesBetty's customers uses telehealth to treat patients with diabetes. Using SalesBetty's AI, we were able to identify over 150 health systems that had recently launched new diabetes initiatives or were discussing the use of telehealth to support diabetic patients. We delivered intel on the decision-makers at each health system who were responsible for these initiatives and mapped their relationships to the telehealth company's network of current customers, investors, and champions. Their sales cycle length decreased by 30% and pitches increased 3x in the first 6 months.


Putting Sales Serendipity into Action:

Switching from the old ways of doing lead generation - buying lead lists from lead sellers, using drip email campaigns, and cold calling - is easier than it may seem. To do so, first, it's important to identify the Ideal Customer Profile (ICP). This can either be done using customer interviews, or with the help of tools like Salesforce Einstein, which uses data from your CRM. At SalesBetty, our AI reverse-engineers ICPs by finding the common attributes amongst your best customers, including their past initiatives, pain points discussed, decision-makers’ job tenures, organization profile, and more.

Next, a sales team can use the ICP to find prospects who match that profile. Make sure to not just focus on job titles and organization profiles (that’s the old way of doing things), but expand to the buying signals that really matter: pain point signals, decision making power, topics of interest, and even factors such as an organization's financial health. SalesBetty's buyer scoring system makes doing this easy, and automatically calculates scores for each unique ICP for 250,000+ healthcare decision-makers. We call these “low hanging-fruit prospects” (LHFPs) - they’re aware of the problem you’re solving, likely have the relevant pain points, and have the decision-making power necessary to make thing happen.

Finally, and perhaps most importantly, check to see if people in your network know these LHFPs well. Tools such as Linkedin and Relationship Science can help track down warm introductions. SalesBetty’s Relationship Mapping technology does this specifically for healthcare decision-makers.


The Last Word:

Powerful tools now exist that can free marketing and sales teams from chasing unproductive leads. Successful teams are now more sophisticated in who and how they target. With a focus on fewer, but more relevant prospects, teams can condense their sales cycle and reverse the trend of long sales cycles in enterprise healthcare.


Introducing: Kara Kerker - Head of Marketing at Bright.md

In our work with healthcare companies, we come across some pretty amazing marketing and sales professionals working in a rapidly changing industry. This month, our CEO Jerrit Tan, sat down with Kara Kerker to ask her about her work at Bright.md.

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Bright.md is a healthcare automation company, focused on transforming the way care is delivered, starting with low-acuity conditions. Their solution, SmartExam, is a direct-to-patient, asynchronous telehealth solution for healthcare systems to add to their convenience care offers so that their patients can get affordable, immediate, private care from their trusted healthcare system when they need it, from wherever they are. The built-in automation in the SmartExam software means clinicians can confidently deliver care in less than two minutes.

Kara Kerker is the head of marketing at Bright.md, where she works closely with the head of sales to grow the company through partnerships with healthcare systems. Together with her team, Kara has responsibilities across lead generation, branding, and educating health systems on the value of Bright.md.

Below is our interview with Kara.


JT: How did you get to be in your position today?

KK: I began my career working at HP. Some would call it the “original start up” and the grandfather of Silicon Valley. The company was rapidly innovating, creating, and owning new categories. For a young professional who wanted to work in tech, it was a great place to land, learn the ropes, and grow. We were developing breakthrough technology that could solve real problems and the company valued great ideas and integrity. I benefited from excellent mentors and a remarkable team of people to learn from and work with.


That decade was formative in so many ways—relationships, work approach, leadership skills, commitment to learning—that are still at the core of who I am professionally. Without that foundational experience, the rest of my career would not have been possible.


JT: You came from outside of health tech. What has surprised you most in your current role?

KK: As someone who has experienced the healthcare system as a patient and benefitted from the advances that technology has brought to healthcare, it’s been surprising to see how technology that was supposed to make things better has had the opposite effect. Unfortunately, some technology has burdened our healthcare system and the providers who work so hard to deliver care. This has led to tech fatigue and weariness in a sector of the economy that desperately needs to harness every advantage that technology can deliver.


JT: Now that you’ve spent some time in healthcare, what do you think are important problems that need to be solved in our healthcare system?

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KK: The time I have spent in health tech has further validated the initial reason that I was excited to join Bright.md — that access to high quality, affordable, convenient care is of prime importance. This mission is being stalled by the burden borne by our health providers. For example, I had no idea that some clinicians can spend twice as much time on paperwork as seeing patients, or that it can take 32 clicks in a software system to order a flu shot. Providers are burning out and leaving the healthcare system at alarming rates, which puts more strain on everyone’s access to care.


JT: What is the hardest part of your job?

KK: There are two interesting and unrelated challenges in my job. First, because healthcare is more than 17% of the US GDP and there are endless information channels for decision-makers in the space, choosing where to experiment and where to focus our marketing efforts can be daunting. There are never-ending options for marketers in healthcare. But, like in any other sector, choosing your strategy is a combination of art and science and we look for leading indicators (such as those from SalesBetty) to help us choose our ripest targets and use data to help guide our planning and decision making.

The second challenge is overcoming tech fatigue and indigestion in the sector.  Healthcare leaders are, for good reasons, risk averse and cautious. Nearly a decade of experience with solutions that over-promised and under-delivered have left a lot of decision-makers skeptical. Finding the innovators and fresh thinkers is the most important way we can accelerate access to affordable, convenient care.


JT: What is one best practice that you use in your marketing/sales organization?

KK: Alignment. The organization needs to move in harmony and be agile so that we can immediately incorporate insights and learnings into our plans. Even with a small team, we are geographically dispersed, but our religious use of tools like Slack and Asana help us all stay in sync.


JT: What do you think successful healthcare sales & marketing organizations will look like 10 years from now? What will they do differently than the organizations of today?

KK: The healthcare sector will not look the same in 10 years. We are in the early days of the digital disruption and transformation of the structure of our healthcare sector. The go-to-market side of any company selling into healthcare will morph as needed. That said, like any world-class B2B marketing and sales organization, they will need to have a sophisticated technology backbone and depend on it to collect data, generate insights, and help to deliver results through informed decision making. And, of course, without automation, there is little ability to scale for consistent, excellent execution.


JT: What is your wish list for things that would make your job easier or make you more successful in your role?

KK: First of all, it’s not really about me; it’s about what will make our team able to do more with less, and always do it better. As a marketer, you are always thinking about your “great” clients—and how to find more of them with the fewest resources. Any set of tools that can help deliver those insights to us and help us build a bigger and more productive funnel… well, sign me up!