John Kao experienced firsthand the frustration of America’s fragmented healthcare system when his mother suffered a heart attack and was taken to a hospital.
“The care inside the hospital was fantastic,” Kao recalled. “What’s scary was when she was discharged, the care coordination didn’t exist. I had to step in and be the coordinator.
“If I wasn’t involved as a navigator, the likelihood of her going back into the hospital was pretty high.”
He thought he could do a better job so in 2013 he began Alignment Healthcare, with the idea of an artificial intelligence platform that could scale and be like “a doctor in every family.”
Nowadays, his mother, who has recuperated, is a member of Alignment Healthcare along with more than 60,000 others. The Orange-based company has almost doubled its sales in the past two years, reporting revenue of $703.5 million for the 12 months ended June 30, making it the fastest-growing private company on the Business Journal’s annual list, as profiled in the Sept. 16 issue.
Alignment Healthcare’s Kao can now add the Business Journal’s Innovator of the Year award, which was presented on Sept. 25 in a ceremony before an audience of 400 people at Hotel Irvine (see other profiles, pages 1, 6, and 8).
“This company is building the nation’s most innovative model,” Gordon MacLean, director of audit services at RJI International CPAs, said when presenting the award. “They set out a new kind of healthcare company. This company is changing lives.”
Home Monitoring
Kao has more than two decades in the healthcare system. He and other investors in 2006 acquired Downey-based CareMore Medical Enterprises Inc., where he became president. It was sold for about $800 million in 2011 to Indianapolis-based WellPoint Inc.
In 2013, he began Alignment Healthcare to sell Medicare Advantage insurance to people enrolled in Medicare.
The company’s edge is to provide constant monitoring of elderly, particularly high-risk patients who have complex medical problems.
The company developed a platform, Alignment Virtual Application, or AVA, an artificial intelligence-driven “command center.” The platform, which is designed to scale, has more than 100,000 unique data signals per member that identify changing care needs in real time to provide care when and where seniors need it most.
Alignment patients are monitored wirelessly at their home for items like weight, heart rate, blood sugar and blood pressure information. The platform then uses this data to triage each member every 30 minutes, 24 hours a day—identifying any signs for needed immediate intervention or changes in care—from oxygen deficiencies to lapses in medication pickups.
5,000 Alerts
The goal is to reduce the average length of hospital stays for its patients and continue to manage care after discharge, whether at home, a rehabilitation center, or another facility.
The company said it has given more than 5,000 actionable health alerts, providing members with “in the moment” care interventions; given “informed responses” to nearly 1 million inbound calls from members and their caregivers; and has hospital admission rates approximately 30% less than that of traditional fee-for-service Medicare in certain counties.
For example, an Alignment member visited a Bay Area emergency room, triggering an AVA alert. Alignment’s care team proactively called the ER doctor, who was preparing to send the patient home. Using data from AVA, Alignment caught a flag in the patient’s medication history that indicated a high likelihood of previous blood clots. With this information, the doctor ordered additional tests that, indeed, showed a pulmonary embolism, or a clot in the patient’s lungs, which could have led to her death had she been sent home as planned.
It’s earned a 4 out of 5-star rating in overall quality this year from the Centers for Medicare & Medicaid Services.
Growing Industry
Medicare Advantage plans are popular because they offer extra coverage for things such as vision, dental and hearing exams, and prescription drugs, in addition to traditional coverage of doctor visits and hospital costs.
Alignment is in an industry that is clearly growing. Kao estimated the current population of 60 million individuals older than 65 will increase to 75 million in a decade and 95 million in 25 years.
The company has won converts, including two former top Medicare administrators on its board of directors. It’s received more than $240 million in funding from private equity firms; other firms are constantly asking to invest, Kao said.
Kao is aiming to be a billion-dollar company, possibly as soon as 2020. For him, the business model isn’t complex.
“Take care of every patient [like] your mom or dad. It’s so simple,” he told the IOTY audience.
