Garner Health Raises $45M Series B for Doctor Review Service

The Pursuit of Informed Doctor Selection: Garner Health's Approach

When choosing a holiday gift, consulting reviews is commonplace. Garner Health proposes a similar approach to selecting a physician, recognizing that conventional reviews often fall short of providing sufficient information.

Garner Health: Connecting Patients with Optimal Care

Established in 2019, Garner Health offers a service designed to streamline the process of finding the right doctor. The company collaborates with employers offering health plans to their workforce.

Employees can utilize Garner’s application to search for doctors within their geographic area, with a focus on specialists possessing expertise relevant to their specific health concerns. Selecting a doctor through the service unlocks employer-provided funds to help offset medical expenses.

Securing Growth Capital

Garner Health recently concluded a $45 million Series B funding round, spearheaded by Redpoint Ventures. Participation in this round included Founders Fund, Thrive Capital, and Optum Ventures.

This latest investment follows a Series A round completed in February, bringing the company’s total funding to $70 million, as stated by CEO and founder Nick Reber. Previous backing was received from Sequoia Capital and Maverick Ventures.

Demonstrating Value and Growth

Reber attributes the strong interest in this funding round to a ten-fold expansion of Garner’s client base, demonstrable savings in healthcare costs for employers, and a high rate of employee engagement with the service.

“We consistently achieve average realized savings of 10% for our employer clients. Furthermore, over 40% of employees are actively using our tool to identify a suitable doctor. We are exceptionally pleased with both of these metrics,” Reber explained.

Differentiating from Existing Solutions

While Garner’s doctor search functionality shares similarities with services like Zocdoc, which has secured $150 million in growth financing and boasts a $2 billion valuation, Garner distinguishes itself through its data-driven ranking system and incentive structure.

Garner Health’s doctor recommendations are not based on crowdsourced reviews, but instead leverage medical claims data. The company’s algorithms have analyzed claims data from approximately 200 million patients.

Data-Driven Doctor Evaluation

This analysis compares doctors’ actual prescribing practices against established best practices outlined in scientific literature. Garner has developed over 500 individual measures to assess how doctors treat different patients and achieve positive health outcomes.

“We measure these specific behaviors within the claims data, providing a more comprehensive understanding of their practice and patient care,” Reber stated.

Objectivity and Potential Limitations

The result, according to Reber, is a more “objective” review system. However, this system relies on the often-complex process of submitting medical claims.

While medical claims are utilized in public health research, potential issues exist, such as incomplete data and the absence of billing codes for certain conditions, as highlighted in existing research.

Addressing Potential Biases

A potential concern is that such a system might inadvertently favor certain doctors over others. For example, doctors serving communities with higher rates of underlying disease or limited access to healthcare could see their performance metrics negatively impacted, even while providing optimal care.

Reber assures that his team is actively addressing this concern, ensuring that algorithms compare doctors based on groups of comparable patients.

Employer and Employee Incentives

Garner’s approach also includes a unique incentive structure. Selecting a doctor through the service unlocks funds provided by the employer to cover out-of-pocket medical costs.

Addressing Employer Concerns

Reber’s pitch to employers centers on the escalating costs of healthcare and the risk of losing talent if employee benefits are reduced.

A Kaiser Family Foundation survey of 300 large private employers revealed that 83% consider healthcare benefit costs excessive. Specifically, 49% moderately agreed, 28% considerably agreed, and 6% strongly agreed.

Projected Healthcare Cost Increases

Furthermore, a Willis Towers Watson survey indicates that employers anticipate a moderate 5% increase in healthcare costs next year, driven by the resumption of routine screenings and treatments delayed during the pandemic.

Employer Strategies for Cost Management

Employers are exploring various strategies to manage costs, including implementing spousal surcharges or narrowing in-network options, according to the Willis Towers Watson survey. However, some companies are choosing to absorb costs to retain employees, with 32% of the 1,502 employers surveyed by Mercer planning to decrease premium costs.

Garner’s Value Proposition

Reber aims to convince companies that Garner can enable them to maintain existing benefits while directing patients toward specialists who can reduce long-term costs. The company currently claims to have achieved 10% savings for employers.

These savings are then partially used to cover employees’ out-of-pocket expenses.

“We essentially cover the deductible, copay, and coinsurance bills. This translates to greater savings for the employer and a reduction in overall healthcare costs,” Reber explained.

Expansion and Future Plans

Garner has already established partnerships with approximately 100 clients across 47 states. The new funding will facilitate expansion of its client base, with a particular focus on small to mid-sized companies, which often lack access to advanced benefits solutions.

The company is also developing a “scorecard” service for doctors and providers, providing insights into their performance relative to peers, such as test ordering rates and complication levels.

Provider-Focused Insights

This service is intended to empower doctors with data-driven insights and assist primary care physicians in making informed referrals.

Currently in a pilot phase with a select group of large primary care groups, hospital systems, and multi-specialty providers, this provider-focused service represents a smaller segment of Garner’s business.