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Jude Odu of Health Cost IQ - The Tech Tribune
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Feb 17, 2022
An exclusive Tech Tribune Q&A with Jude Odu (founder and CEO) of Health Cost IQ, which was honored in our: Tell us the or...
Problem
Companies and their health plans are facing enormous financial pressure today
Patients and healthcare providers aren’t the only ones impacted by consistent increases in healthcare spending. Employers, health plans, organizations, and other businesses that provide or manage healthcare coverage for employees and their dependents are also feeling the pinch.
With nowhere to turn, these companies are reaching for drastic measures to rein in costs: reduced health coverage and cuts in other benefit areas lead to excessive time spent on health plan changes. This in turn results in increased occurrence of employee health problems, absenteeism, and low employee morale.
Solution
Making healthcare more intelligent
Introducing Health Cost IQ, a healthcare software innovator with a mission to help employers, health plans, and other risk-holding fiduciaries identify and address the causes and sources of their ever-increasing healthcare costs.
Emphasizing early risk identification and prevention, we provide a diverse ecosystem of services including health management and cost analytics, predictive modeling, and decision support — while simultaneously empowering organizations to act more quickly to prevent crippling costs before they occur.
Product
Reducing health plan costs through advanced predictive models and smart algorithms
Health Cost IQ is a HIPAA-compliant, SOC 2 certified SaaS ecosystem that helps minimize and eliminate excessive healthcare spending. Through a proven methodology, it identifies avoidable risk factors present in medically insured populations, analyzes the risks, and provides clear solutions to help clients minimize those risks, thus reducing unnecessary costs and saving organizations money.
Starting with the predictive models and algorithms embedded in our flagship Health Data IQ platform, employers, health plans, and other fiduciaries can now gain peace of mind in all key operational areas, including future cost/risk modeling, cost management, population health, and more.
Our 3-step PIA® methodology (which we trademarked the name of), has been proven time and time again to help organizations rein in runaway spending, resulting in significant cost savings that run into the millions of dollars per client.
A Brand-new Opportunity Discovery Module
In June 2021, we launched a brand-new, innovative Opportunity Discovery product module that utilizes a series of sophisticated, smart algorithms and machine learning to mine medical and pharmacy data to uncover systemic and avoidable inefficiencies, wasteful spending, potential fraud, abuse, and unnecessary costs that exist within most employer health plans. We identify and quantify – in precise dollar terms – opportunities for cost reduction and significant cost savings, enabling them to take concrete actions to not only eliminate avoidable costs and costly inefficiencies, but also prevent them from reoccurring.
Subdivided into Medical, Pharmacy, and Emergency Room content areas, the Opportunity Discovery module is ideal for employer health plan design and formulary design. It can be deployed for ongoing, enterprise-wide cost containment initiatives.
In our initial, limited deployment of these algorithms using real client data, we have been able to identify high levels of inefficiencies amounting to several millions of dollars in potential savings for our client organizations.
SOC 2 Certified
In 2020, we successfully completed the System and Organization Controls (SOC) for Services Organizations SOC 2 Type 2 examination for our Health Data IQ SaaS software platform and technology infrastructure, thereby reinforcing our commitment to information confidentiality and data security. Remarkably, the Type 2 SOC 2 audit of Health Cost IQ’s infrastructure and internal processes revealed no exceptions, affirming that the company's security policies, data protection, and privacy protocols met or exceeded the highest industry standards.
Established by the American Institute of Certified Public Accountants (AICPA), the SOC 2 examination is designed for organizations across all industries and scope to ensure the personal and business assets of their potential and existing customers are protected. SOC 2 reports are recognized globally and affirm that a company’s infrastructure, software, people, data, policies, procedures, and operations have been formally audited by a third party.
Traction
Over 1,500 companies onboarded onto our SaaS platform
Health Cost IQ signed our first paying client 2 months after our initial launch. From there, we've achieved direct platform integration with the Johns Hopkins’ University ACG System and inked data acquisition agreements with a variety of top national & regional carriers, including UnitedHealthcare and Anthem.
We now have over 1,500 companies and organizations on our platform and exceedingly high proof of concept. We have helped a single client save $2.5M, and another one $1.5M — all within 2 years of being on our platform. As of June 2021, our MRR is ~$52K. We've grown our revenue from $350K in 2018 to $610K in 2020.
Our company was chosen in May as a member of the 2021 class of Jumpstart Foundry (JSF) portfolio companies. JSF is a Nashville-based, health tech-focused fund that invests in innovative digital health startups across the US. In choosing to invest in Health Cost IQ now, JSF recognizes us as a healthcare software innovator working to improve the future of health technology.
Our 5-year revenue projection
Customers
Powering healthy populations with insights and a healthy bottom line
The Health Data IQ platform is proving itself every day as a reliable technology partner to cost-conscious organizations nationwide. We've gained a reputation as a powerful cost savings tool for clients currently using it. We utilize a trademarked 3-step methodology to deliver better cost management and ultimately produce significant cost savings.
Organizations of all types and sizes across diverse industries are reaping the benefits already. Below are some of our recent success stories:
Customer Praise
Verbatim quotes from our clients and end-users
Monday, November 11, 2019 from Jean Ann Cloud, Assistant Benefit Plan Administrator at EPC regarding EPC dashboards and the HCQ team going above and beyond to meet client goals:
Subject: RE: Anthem and UHC Cobra (EPC)
"THIS IS AWESOME!!! I just can’t contain my excitement!! I think our carriers will be thrilled as well. THANKS David and crew for going above and beyond my expectations!!"
-- Jean Ann Cloud, Asst. Benefit Plan Administrator – Operations, EPC
July 12, 2019 In response to HCQ Dashboards
Subject: RE: EPC - Task to Complete and deploy the Premium and Adjustments Reporting
“AWESOMENESS!!! YOU GUYS ROCK!!!”
-- Jean Ann Cloud, Asst. Benefit Plan Administrator – Operations, EPC
Monday, October 21, 2019 From Brian Lewis of Optimal Health Initiatives (OHI)
“Let me add that working with Holly and David has been exceptional. Looking forward to getting better acquainted with Chris also.”
-- Brian Lewis, VP of Operations & Client Services, Optimal Health Initiatives
December 11, 2018 in response to HCQ predictive capabilities and our overall client services
“Thank you. That is what I thought and hoped [to receive]. I am enjoying diving in now and am getting what I need. Your responsiveness has been EXCELLENT. Jude, I wanted to add that David and Holly have been great partners in helping me get what I need from the data collected. Thanks for assigning them to our groups.”
-- Brian Lewis, VP of Operations & Client Services, Optimal Health Initiatives
November 15, 2019 in response to survey question regarding overall service HCQ provides
“Holly and David are EXCELLENT at peeling apart the data and helping isolate and teach me where to obtain the info I need, AND are developing new dashboards and reports patiently with me and my availability. Whenever I do ask a question I receive a response same or next day!”
-- Brian Lewis, VP of Operations & Client Services, Optimal Health Initiatives
November 22, 2019 regarding HCQ reporting and service (EPC)
“I ran November HCIQ reports verses my spreadsheets and can’t contain my excitement 😊 😊. I had to share the excitement with all of you as ALL YOUR HARD WORK IS PAYING OFF!! I am so ready to go live with reports 😊 😊. David, Holly & Khan, I couldn’t have done this without your patience during all our calls, emails to understand our structure craziness!! YOU GUYS ROCK!!! Jude, you have an AWESOME crew working for you!!”
-- Jean Ann Cloud, Asst. Benefit Plan Administrator – Operations, EPC
February 19, 2021 regarding life insurance carrier reporting
“Again, want to say THANK YOU to everyone at HCIQ for working diligently on getting EPC running like a well-oiled machine! I’m sure you can attest that the EPC and districts are unique in our processes. There is a method to the madness 😊 “
-- Jean Ann Cloud, Asst. Benefit Plan Administrator – Operations, EPC
Business model
Annual tripling of revenue starting 2022
Health Cost IQ utilizes the PEPM (per employee, per month) pricing model that’s common in our sector. The actual PEPM fee the client pays is negotiated with each new client during contracting based on the following pricing matrix:
In addition to the monthly SaaS fees, we also charge one-time implementation fees and custom software and product development products. With annualized revenue of roughly $650K so far, this model has proven to be quite successful. Our current margins are ~80%. Going forward, we are projecting even more significant growth, conservatively doubling our revenue through the end of 2021 and tripling it annually from 2022 onward, achieving an ARR of $67.5M by 2025.
Market
$1.3M projected revenue by EoY 2021 with a $2.5B TAM
With $3.8T spent annually on healthcare in the US, there’s plenty of room for our solution to work. There are over 23K+ organizations in the US with 1K+ employees; and total health plan premiums were estimated at $1.3T in the US.
Our TAM comes in at roughly $2.5B. This total was calculated using a “bottom-up” methodology that leverages data from our sales efforts and our current pricing structure. The broad-serving nature of our platform is what sticks out in this analysis, as we have pinpointed 8 different target segments that could legitimately benefit from our solution immediately.
*$3.8T US healthcare spending in 2019; 23K+ organizations as of Feb 2021; $1.3T in premiums in 2019; 33M covered by ACOs in 2018
Competition
More versatile and comprehensive than many other SaaS solution out there
The Health Data IQ platform allows our customers to accurately determine the true cost of the medical risk, and empower them to quickly and efficiently develop targeted, cost-saving interventions before it’s too late. Because of this, Health Data IQ is much more versatile than other competing solutions on the market today — providing superior value in four key areas: population health, predictive cost/risk modeling, pharmacy opportunity discovery, and business decision analytics.
There are 3 top players we compete against in this space — Benefit Science Technologies, Deerwalk, and Advanced Plan for Health. Despite the successes these companies have enjoyed so far, it’s our vastly superior product offering, UI/UX, and ability to serve a wider spectrum of fiduciaries that stand as our primary differentiators.
Vision and strategy
Customer acquisition by building a national sales team
Now firmly planted on the market, Health Cost IQ is focusing squarely on customer acquisition. While our previous customers have been acquired mostly by referrals & word of mouth, the time has come to grow more aggressively. The main way we’ll achieve this is by building a national sales team incentivized with commissions, stock options, and a small monthly retainer. Product development will also become more of a focus going forward. Here are a few key product modules currently in the pipeline for delivery in Q3 and Q4 of 2021:
Ultimately, we are positioning ourselves for a lucrative exit strategy by increasing revenue significantly over the next 24-36 months to become a much sought-after acquisition target.
Funding
Raising to support customer growth
Health Cost IQ recently completed a convertible note round that has proven crucial in bringing us to our current position. But now, with further market share growth on the horizon, the time has come for a larger infusion.
This capital will provide us with the flexibility needed to optimize customer acquisition — primarily through building out our new sales and marketing team. A healthy portion will also be used to fuel the product development efforts mentioned on this page.
Some of our current investors
About 70% of our current investors are board certified physicians in various clinical specialties who are experienced investors in the health tech space, further validating our business model and strong position within our sector.
Dr. Thomas Kovack
Dr. Ergun Kocak
Dr. Pankaj Tiwari
Founders
