HealthJoy secures $12.5M to boost its AI healthcare benefits platform
Healthcare startup HealthJoy has secured $12.5 million in funding to double its team to 250 people over the next 10 months, to improve its artificial intelligence-powered benefits platform, the company says.
The Series B financing, which was announced March 8, is led by U.S. Venture Partners, participating investor Epic Ventures and existing investors Chicago Ventures, Sidekick Ventures, and the company co-founders Doug Morse-Schindler and Justin Holland.
“The pace at which clients and their employees have adopted HealthJoy is only fueling the excitement of their channel partners, leading to significant and accelerating revenue growth,” Jonathan Root, general partner at U.S. Ventures, said in the announcement. “We’re excited to help this first-class team shape the future of how employees engage with their healthcare”
The U.S. spends $3.5 trillion on healthcare annually, which has grown over 30-fold in the last 40 years, according to HealthJoy. To stay competitive, many employers have shifted rising costs to their employees. HealthJoy aims to work with companies to reduce healthcare costs and administrative burdens by focusing on how employees and their families use healthcare benefits.
At the center of the HealthJoy’s platform is an AI-powered virtual assistant that routes users to appropriate care.
HealthJoy has about 200,000 users, has grown by 600% last year and is on track to grow by more than 300% this year.
“Our growth owes in large part to working with consultants whose vision for making an impact on healthcare aligns with ours,” says Morse-Schindler, who's also HealthJoy’s president. “When you have that alignment, it follows that we’ll have the opportunity to speak with a lot of employers and educate them on our product.”
Over a third of HealthJoy’s sales were new customers for the company’s broker partners, Morse-Schindler notes. He believes this speaks to the merit of the partners they are working with and how the platform can make a difference in a competitive market.
“I believe that most people understand the problems with our existing healthcare system, and most brokers know what needs to be done to reduce costs,” Morse-Schindler says. “The hardest part has always been to change the consumer's behavior.”
“We will be adding more in sales, implementation and customer success to support our brokers and clients throughout the country,” Morse-Schindler says.
Using a mobile app, HealthJoy’s platform focuses on a personalized, conversational AI model — virtual assistance that people can interact with as texted-based conversation — that incorporates a wide variety of healthcare data. This includes claims, medical deductibles, HSA balances, prescriptions and more in an effort to drive employee engagement throughout the year.
When someone comes onto the platform looking for an ER or an urgent care facility — provided it’s not an actual emergency — the artificial intelligence can redirect that person to an online medical consultation. This would be a virtual medical provider that’s available via the app either by phone or video call. Between 70% and 80% of all medical visits can be handled with a virtual visit, HealthJoy says.
“Because we engage both proactively and at the time of need, our telemedicine utilization last year was 27.3% across all our clients,” Morse-Schindler says. “That’s a massive improvement over 5%-7% in a telemedicine point solution or 1%-2% when bundled into a health plan.”
Telemedicine can translate into about $450 to $500 in savings per visit, by avoiding more costly centers for care.
“Employees will shop for healthcare when it’s easy to shop for healthcare. That’s what we’ve made possible,” Morse-Schindler says. “Changing the member experience allows us to tackle multiple problems at once in healthcare and employee benefits.”