Credit Suisse an international financial services company, as part of their Healthcare Disruptive Technologies & Innovations series, hosted a small group investor dinner in April with Dr. David Berman, Founder & CEO and Chad Spooner CFO of Slingshot Health in New York City https://credit-suisse.com/us/en.html. The discussion centered on the company’s Dual-Sided Online Marketplace Model.
Slingshot Health https://www.slingshothealth.com opened their doors 7-8 months ago with their dual-sided online marketplace model. Management notes that the company was formed to address two major issues in the U.S healthcare system where providers are leaving in excess of $750 bin on the table annually, patients are dealing with high healthcare costs, and may have limited access to healthcare.
The company notes that on average, every provider has four openings per day that go unused which translates to about $150,000 of lost revenue per year. The cost per provider to do insurance billing is roughly $90,000 and the amount of unpaid bills per provider is roughly $65,000. On the flip side, patients typically wait 24-30 days to see a provider and almost half of all Americans hesitate to enter the healthcare system because of lack of transparency.
The company’s customer focus is currently on individuals without insurance which is about 13% of adults in the U.S. Also, the focus is on individuals with High Deductible Health Plans which is about 40-45% of adults in the U.S with private insurance coverage. The company also sees Millennials as their key demographic target, noting that 45% of Millennials have no primary care physician and they are unwilling to wait weeks for appointments.
Slingshot Health works with a basic workflow. An individual identifies the service in a specialty they want specifying a particular date and time window, and then Slingshot will provide an average cost for the service. The patient places a bid for the amount they want to spend for the service with the bid distributed to all providers that can provide the specific service to the patient.
A provider can ignore the bid, accept the bid, or provide a counterbid. At this point, the provider informs the patient of the exact appointment time within the time window provided by the patient. Slingshot receives a small percentage of the accepted bid as a success fee at the time of the appointment.
There are no maintenance costs, subscription fees, or joining fees for patients or providers. However, when a patient joins Slingshot Health, the company collects the individual’s credit card, debit card, or HSA/FSA account information. Therefore, providers do not have to worry about not being paid, billing, or administrative costs etc.
Slingshot Health guarantees payments in cash to providers within 48 hours but the majority of payments are executed with 24 hours. In addition, Slingshot guarantees payment in full to a provider if a patient doesn’t show up for their appointment.
The company is focused on growth which includes expanding their provider network. The company signed two major contracts in 2018 with Hackensack Meridian Health https://www.hackensackmeridianhealth.org with 7,000 providers and another contract with Prospect Medical https://pmh.com with 11,000 providers.
The company’s second growth strategy is to accelerate customer acquisition by providing inexpensive wellness services where in the majority of cases, patients are paying out of pocket. The strategy also includes providing relatively expensive services such as specially care and procedures where health insurers are likely to pay for the services.
For more information or to provide feedback, contact Jailendra Singh Director Equity Research, Managed Care and Health Care Distribution and Technology at jailendra.singh@credit-suisse.com or call +1 212 325-8121 or cell +1 585 260 0962.