Why I joined the Sana Benefits team
I distinctly remember the first time I made a purchase from my phone while on the go. It was 10 years ago. I was in a taxi going somewhere – probably a 12-minute trip. I found a sought-after toy for my baby on Amazon and bought it. Maybe you can relate to the joy and relief I felt when the “Confirmed” message popped up on my phone. Had I tried finding this item in a retail store, it would have taken me at least half a day. This was so much better, faster and lower-cost.
If you reflect on your own health insurance and healthcare experiences 10, 20, or 30 years ago and compare them to today (or at least, pre-pandemic times with respect to virtual care)… has it changed much?
I have had the privilege of working in healthcare innovation for almost 15 years, and there truly has never been a better time to make an impact. COVID vaccines were developed and commercialized with breathtaking speed. And if you work in healthcare, you probably can name 20 venture-backed startups targeting just Medicare or Diabetes off the top of your head. It makes sense why there is so much attention in these spaces. For one, Medicare represents 31% of health policy premiums earned per the NAIC 2019 Accident and Health Policy Experience Report. Secondly, Diabetes and related conditions accounted for 23% of healthcare spending. There is so much need and amazing innovation in each of these segments and so many others!
Yet, every year we are faced with tides of ever-growing healthcare spend ($3.8 Trillion in 2019), while U.S. health outcomes fall far short of other developed nations that spend substantially less on healthcare. While there are many reasons for this, one key reason is encapsulated in Clayton Christensen’s landmark work, The Innovator’s Dilemma.
It’s a key part of Sana’s strategy, and what first drew me in.
Smart, rational organizations focus on large, growing markets and high profit margins (see Medicare and Diabetes above). However, this causes under-investment in certain kinds of disruptive innovation.
Big disruptors more often come from smaller, lower-margin market segments.
For example, Airbnb began by renting airbeds to people that weren’t able to find hotel rooms for the 2008 Democratic National Convention and other high-demand conferences. It now poses a genuine threat to traditional hotels, comprising nearly 20% of all consumer lodging spending in 2018 and offering everything from low-end single rooms to luxury villas.
Another example is Southwest Airlines. Southwest introduced a more economical model of air travel utilizing point-to-point short-haul flights and less-expensive gate slots at lower-demand airports instead of the traditional hub-and-spoke model employed by legacy carriers. The company also employed a lower margin, no-frills approach of minimal food service and no assigned seating. This “low-end disruption” approach of appealing initially to budget travelers eventually made its way upstream, disrupting the incumbents’ position with Southwest now holding the #1 market share position serving 17.8% of passengers in 2019.
So what might that look like in health care?
Small businesses make up 99% of U.S. employers, accounting for ~44% of U.S. economic activity and two-thirds of net new job creation.
But the Small Employer market is just 6% of total health policy premiums earned, per the NAIC 2019 Accident and Health Policy Experience Report. A far cry from the market size of Diabetes (23%) or Medicare (31%). Because it’s so much smaller, many established and new players do not invest as much in the Small Employer market.
As a result, this market segment is feeling serious pain. Small employers, on average, pay 8-18% more than large employers for the same health insurance policy. A recent poll released by the Small Business Majority and Families USA highlights this cost burden for small businesses in the face of the pandemic:
- 1 in 3 small business owners say it’s a challenge getting health insurance coverage for themselves and their employees
- Nearly 1 in 5 say they plan to make changes or reduce healthcare coverage in the next few months to keep their businesses open
This is the market Sana Benefits is focused on.
Of course, it’s high risk, with plenty of headwinds (as with any start-up).
This is where Sana’s strategy, track record of building and delivering on a high cadence, team and culture drove my decision.
Sana’s customer base is growing rapidly. To achieve this growth – and accelerate future growth – Sana focuses on pairing talent density with empowerment through context, trust and candor. The team has scaled from less than 40 employees at the start of 2020 to close to 100 today, including product, design and engineering teams in-house.
For me, joining and helping nurture an inclusive, productive and innovative work environment was a requirement. Sana was founded in 2017 as a remote-first company; even our co-founders live 1,200 miles apart! More importantly, our commitment to diversity and inclusion continues to grow. Juneteenth and Election Day are company holidays. We encourage employees to take PTO to protest and volunteer. Our company t-shirts are made by a Black-owned, family-owned business. We have a policy of not participating in panels that lack women or minority panelists. We sponsored The Black in HR organization. We match employee non-profit donations. Diversity, and more importantly inclusion, are key to improving performance as any company scales, and a priority at Sana.
With this team and culture, we’re building an integrated health plan, centered on accountable primary care, with robust consumer advocacy and digital care delivery. Serving small employers not only means focusing on an under-served market with acute needs. It enables us to productize solutions, build for scalability and automate flexibility upfront. By contrast, innovators targeting large employers often initially serve just a few clients who demand a highly consultative, bespoke solution. You can read about some of what we’ve already got going in value-based care and digital health partnerships as well as customer experience and more in this blog post.
And people outside of Sana are noticing us too. LinkedIn ranked Sana on their list of the Top 50 Best Startups to Work For. LinkedIn’s ranking has a pretty good track record: More than 20% of the featured startups over the past three years have either gone public or been purchased.
One of Sana’s values is “build the future.” I came to Sana, sleeves rolled up, to help build and scale what healthcare should – and can – be. And you know what? We’re on our way to delivering healthcare experiences orders of magnitude more impactful than that first e-commerce transaction on my smartphone.
Want to join our team and mission? We’re hiring!
Prior to joining Sana Benefits as Chief Product Officer, Jaime served as Interim CEO at seed-stage consumer health and benefits platform Yaro through to its acquisition by Virgin Pulse and advised digital health companies and venture capital firms via Shift Health Advisory. She has helped design, build, evaluate, scale and lead a range of products and services across Blue Plans, Aetna (now CVS), Walgreens and Venture-backed start-ups that have improved healthcare quality and outcomes, lowered cost and improved consumer experience. She is a member of January Venture’s Operator Network. Her predictions on market dynamics amidst Covid have been published in MedCity News and Fierce Healthcare, and her perspectives on the globalization of digital health and AI were featured in MedCity News.