The End of Confusing Health Benefits | with Matt Scovil & Nathan Gilchrist

This video explores Medefy Health's innovative approach to solving the pervasive problem of low engagement and confusion surrounding employee health benefits. Co-founders Matt Scovil and Nathan Gilchrist discuss their journey, starting from a personal frustration with navigating healthcare, to building a platform that acts as a "quarterback" for health plans. Their core philosophy, "great entrepreneurs fall in love with the problem," led them to focus on the member's perspective, employing a "bottoms-up" strategy to demystify complex benefit structures and drive meaningful engagement. The discussion highlights how traditional methods of informing healthcare consumers have failed, necessitating a new model where assistance is provided in the moment of decision.

Medefy Health's methodology centers on removing friction points in the healthcare journey. Initially exploring price transparency, they quickly realized that simply showing costs wasn't enough; members needed comprehensive support for tasks like transferring records, scheduling appointments, and even mediating conversations with doctors. The platform, primarily a mobile app, leverages psychological principles like "loss aversion" and consistent, multi-channel communication to achieve remarkably high engagement rates, often exceeding 90%. This proactive, high-touch, live support model, initially unplanned, emerged from user feedback and proved to be the key to driving both member satisfaction and significant cost savings for self-insured employers.

A substantial portion of the conversation delves into the strategic deployment of Artificial Intelligence (AI) and Large Language Models (LLMs) within Medefy Health. The company utilizes AI both internally to streamline workflows across various departments (e.g., marketing, coding) and externally to augment its care team. An internal "co-pilot GPT" assists care guides, enabling them to handle more concurrent member interactions and improve efficiency. The future vision involves AI agents handling simple, routine queries, while complex, emotional, or highly individualized cases are seamlessly handed off to human care guides, ensuring a "human in the loop" approach. The speakers also touch upon intriguing research suggesting that AI, when its identity is unknown, can sometimes be perceived as more empathetic and informative than human counterparts, hinting at a future of hyper-personalized healthcare experiences.

Key Takeaways:

• The "Problem-First" Approach: Great entrepreneurs prioritize understanding and solving the core problem rather than falling in love with a specific solution. Medefy spent five years researching the "engagement, navigation, and behavior change" problem in health benefits before writing a single line of code.
• Healthcare Engagement Crisis: A significant percentage of employees (e.g., 25-33% of millennials) would rather perform undesirable tasks than learn about their health benefits due to complexity, dryness, and boredom. This leads to delayed care, inappropriate ER use, and underutilization of valuable benefits.
• Bottoms-Up Strategy for Member Engagement: Solutions should start from the member's perspective, capturing their hearts and minds, rather than forcing top-down mandates from insurance providers or doctors. This approach focuses on making the experience easy and intuitive for the end-user.
• Friction Removal is Key: Price transparency alone is insufficient. True behavior change requires removing all layers of friction, including setting appointments, transferring medical records, having uncomfortable conversations with doctors, and ensuring follow-up care. Medefy handles these tasks on behalf of the member.
• Leveraging Loss Aversion: Psychological principles, particularly "loss aversion" (people are more motivated to avoid pain than gain a benefit), are highly effective in driving engagement. Messaging that highlights potential financial or health consequences of wrong decisions, coupled with easy solutions, resonates strongly.
• Consistent Multi-Channel Communication: Effective engagement requires continuous, year-round communication through various channels (mobile app, emails, texts, push notifications, even traditional flyers) with simple, insurance-speak-free value propositions, not just during open enrollment.
• Mobile-First Platform Design: Given that 90%+ of people are mobile-first or mobile-only, a mobile app is crucial for high engagement, as opposed to 800 numbers or web portals which typically have low engagement rates.
• The "Household Effect": Engaging the primary healthcare decision-maker in a household, often the female spouse, creates a "halo effect," leading to deeper penetration and usage across the entire family.
• AI as an Augmentation Tool: AI is most effectively deployed to augment human capabilities, not replace them. Medefy uses AI to streamline internal workflows and provide a "co-pilot" for care guides, increasing their efficiency and allowing them to handle more complex, empathetic interactions.
• Human-in-the-Loop AI Model: The optimal approach for AI in healthcare involves AI handling simple, repetitive queries (e.g., deductible status, in-network facilities) and seamlessly handing off complex, emotional, or individualized problems (e.g., pharmacy issues, patient distress) to human experts.
• Future of Individualized Healthcare: The healthcare system is moving towards hyper-personalization, driven by individual demands and technological advancements like gene mapping and AI. This will lead to tailored care plans, specific medicines, and AI assistants that understand individual needs and data.
• Impact on Claims and Costs: By driving members to appropriate, lower-cost care settings (e.g., ambulatory surgery centers), introducing competition among providers, and promoting preventative care, platforms like Medefy can significantly reduce healthcare spend (e.g., $800 less per colonoscopy incident for users).
• HR as a Key Partner: HR departments often lack the time, tools, and data access to effectively manage complex health plans and drive employee engagement at scale. Solutions that partner with HR, making their lives easier and providing actionable insights, are invaluable.
• The "Quarterback" Analogy: Health plans are like football teams with specialized players (point solutions). A "quarterback" (like Medefy) is needed to call plays, hand the ball to the right player, and navigate members through the ecosystem to achieve optimal outcomes.

Key Concepts:

• Loss Aversion: A cognitive bias where people prefer avoiding losses to acquiring equivalent gains. Used by Medefy to motivate engagement by highlighting potential costs of inaction.
• Bottoms-Up Approach: Starting solution design and implementation from the end-user's perspective and needs, rather than a top-down mandate.
• Human-in-the-Loop AI: An AI model where human intervention is integrated into the decision-making or problem-solving process, especially for complex, nuanced, or ethical considerations.
• Agentic Model (AI): A paradigm where AI systems are designed to perform specific tasks or act as autonomous agents, often collaborating with other agents to achieve broader goals.

Examples/Case Studies:

• Co-founder's Eye Exam Ordeal: Matt Scovil's personal struggle in 2012 to understand network, costs, and access for a simple eye exam, highlighting the systemic complexity.
• $4,000 to $0 Cancer Scan: A 24-year-old uninsured cancer patient needing a full body scan was quoted $4,000 by a hospital. Medefy identified an independent clinic for $400. When the hospital learned of this, they waived the cost entirely to retain the patient, demonstrating the power of competition and informed navigation.
• Colonoscopy Cost Reduction: Medefy users spent an average of $800 less per colonoscopy incident compared to non-Medefy users, illustrating tangible cost savings.
• Preventative Care Incentives: An employer offering a $100 bonus for colonoscopies or mammograms saw a shift from struggling to get any preventative care to some individuals attempting monthly colonoscopies, showcasing the impact of incentives and engagement.