Can an Israeli start-up bring a virtual Kupat Holim (sick fund) to the United States and gain a foothold in a $4 trillion a year market?
Tel Aviv-based Antidote Health believes its hybrid digital health and fin-tech solution can help change the rules of the game for an estimated 38 million Americans who currently don’t have any form of medical insurance.
“A belief that guides everything we are doing is that every person is born with a fundamental right to receive proper medical treatment,” says Ben Enosh, the company’s president and chairman. “There is a portion of the US population that doesn’t have private health plans, but don’t have public health plans for people with low income either. We are talking about people in the middle, with household incomes of $17,000 to $55,000 a year, who specifically suffer from the broken system in the US.”
The US healthcare market is worth about 19% of the country’s GDP, but the two pillars to the American health care system, the hospitals and the insurance providers, both have an incentive to keep inflating the prices of medical treatment, Enosh says.
The Health Maintenance Organization (HMO) system in the US, on the other hand, which works more like Israel’s sick funds, better aligns the interests of the patient and the health providers, because individuals pay a fixed monthly cost and it is in everyone’s interest for him to stay healthy.
“That’s why, for example, Israel has a third as many appendix surgeries as the US,” Enosh says. “In this system, patients are more likely to get antibiotics before the condition gets to the point where it requires surgery.”
HMOs have earned somewhat of a bad reputation in the US for providing substandard care. Because customers are limited to using only doctors they employ, coverage can be severely limited as well. However, Enosh says, providing a virtual HMO with the benefits of technology can be a game-changer.
“This service lives in the digital world, and we are incorporating AI so that we can cut the costs of the service to about a tenth of what Americans pay now,” Enosh says. “The average medical expense for all Americans, whether young or old, is $11,500 a year. We believe we can provide the same type of service for about $100 a month, or $1200 a year. We aren’t at that level yet, but that’s our aim.”
THIS WILL require Antidote to cut costs in multiple layers of service simultaneously. “The first level is the acute primary care that makes up 70%-80% of all interactions between patients and the health system,” Enosh said. “Since we launched at the beginning of 2021, we have been providing that for our customers virtually in five US states – New York, New Jersey, Michigan, Florida and North Carolina. We are providing these online with our own doctors who are licensed in each state, as per federal law.
“Next, we are adding additional virtual services, such as mental health and support for diabetics that we’ll be launching in the coming quarters,” he said. “In some cases, we’ll build our own system for these, and in others, we’ll partner with existing providers.”
Furthermore, Enosh says, for cases where a customer needs more advanced services from outside the HMO network, Antidote will provide a debit card pre-loaded with the funds to cover charges for hospitals and medicines. “So if you need a drug that we’ve approved, you can walk into CVS or another pharmacy and pay for the drug using the money on the card.”
Antidote can do that because of the other layer of the business, the financial side,” Enosh explains. “The real unique thing about our company is the way we converge two different worlds. One is the digital health layer, and the other is the world of Fintech and Insure-tech.
“Israel has a number of virtual insurance companies like Lemonade and Next Insurance that have caused significant disruption in their fields and become multi-billion dollar companies. We are looking to do the same for the world of health insurance.”
That’s no small vision, and achieving it will require a massive investment. Antidote said Monday it raised $12 million in seed-stage funding to expand its service nationwide and fuel its marketing initiatives, in a round led by iAngels, Welltech Ventures and Flint Capital, along with other angel investors. The company currently has 50 doctors and over 30 employees, and is headquartered in New York with an R&D center in Tel Aviv.
“There will be a lot more funding needed,” Enosh said. “The launch in five states was a minimal viable product launch. Our company is led by a phenomenal team, and I believe we can be successful.”