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- [00:00]
A
Hello everyone, this is Jacob Emerson with the Becker's Payer Issues podcast. Thrilled today to be joined by Jeff Yuan who is the co founder of Mending. Jeff, thanks so much for taking the time to be with me on the podcast today.
- [00:12]
B
Jacob, great to be here. Big fan of the podcast. Thanks for having me.
- [00:15]
A
Thanks a lot Jeff. Appreciate you taking the time to be here with me. So Jeff, before we dive into everything we want to talk with you about, can you tell us a little bit more about yourself, your background in healthcare or career in general and then what it is that you're doing today at Menden?
- [00:31]
B
Yeah, absolutely. So I've been in healthcare for the last 20 years, my career, earlier days I was actually more in academia so I started off my career doing a lot of laboratory research, translational research, specifically in the IBD and Crohn's space. Like a lot of folks just trying to figure out kind of my career I think early days I also made a pretty hard pivot and left academia and joined a consulting firm called the Advisory Board Company which I credit to really be my education introduction to US Healthcare Economics. A lot of my clients are large payers in hospital systems. We worked on the physician enterprise and really understood that relationship and then really frankly fell in love with startups, specifically health technology startups. I had a great stint at zocdoc helping it run its enterprise business, doing a lot of patient access work and with hospital systems and online physician scheduling and then join another startup called trialspark now today called Formation Bio, who's a full stack pharma company and that's actually where I met my co founder Frank. He was the first employee, first engineer and together we ended up leaving and starting Mending just a few years ago. So for those of you who don't know Mending, we were formerly called TeroHealth. We are an AI native health insurance company. So today we have three customers. We sell our health insurance products directly on the ACA marketplace, so on and off Exchange Products on healthcare.gov we work with a lot of small groups, small businesses who can buy fully insured products and we also sell in the Ichra space for those employers who give money to their employers to buy their own health insurance. A lot of employees will pick us directly and so one of our core beliefs as a health insurance company is that payers should actually build technology to help providers lives. And so a lot of how we got our start is figuring out how can we make the piping between payers and providers much more smoothly, try to get More providers outside of the business of practicing insurance and more into the business of practicing medicine.
- [02:34]
A
Fantastic. So, really interesting background and I appreciate that overview of, of the rebrand from Taro Health to Mending. I honestly think we could do an entire podcast just talking about ICRA alone. But, but, you know, before, before we do dive into Mending specifically and what you all do. Talk to us about the rebrand. You. You announced that very recently. What is. What, why, what. What's behind this? What does this shift represent in terms of the company's evolving identity and, and, and strategy?
- [03:05]
B
Yeah, absolutely. So we were terahealth for four years. We've recently rebranded to Mending, as you pointed out. And, you know, transparently, we always felt like a rebrand was something that would happen later down the future. The early story of how we got to Terra Health is not glorious. Like a lot of early startups. It was me and Frank, just the two of us in a room sitting on his couch, saying, oh, at some point we need to name this company. And literally we're finding, you know, cheap domain names, things that can just get us started. We always knew branding as a, you know, mattered as a company, but it was good enough to get started. And we really liked the name. It kind of spoke to us in terms of Taro being a root vegetable and trying to get and fixing kind of the root of healthcare. You know, as we've evolved in the last couple years, now that we're in market, we've been growing really quickly. We work with lots of different doctors and patients in the market. We felt like mending more uniquely captured our mission and our momentum. And as I stated earlier, a lot of how we got started is we feel like there's this healthcare system that, you know, all of us depend on. We love it, there's ways to improve it and mend it. Mend the doctor patient relationship, mend, you know, how really US health care works. And we just again, felt like it was thematically great and before we get bigger, it's easier to rip the band aid off earlier. And so we did the rebrand just a few weeks ago.
- [04:28]
A
Got it, got it. Very cool. And it sounds like, so this is something that was always in your heads. You fully expected to have a rebrand come down the line. And it makes sense. The mending word, that's, that's, that's a, that's a great word to use for what you all do. You know, the company is positioning itself as the first AI native health insurer, which, you know, that's a really interesting way to phrase things, I think, and especially because we've heard so much, especially the last few years in the headlines, usually negative Jeff, about, you know, insurers use of AI. So what's, what's your perspective on, on or Mending's position on this in terms of how you're using this technology meaningfully reduce administrative burdens for the providers that you contract with and then ultimately of course, improve the outcomes for your members in comparison to a more traditional insurer?
- [05:24]
B
Absolutely. I love this question because I think Jacob, to your point, there is, you know, AI is omnipresent in all of our lives and there's a lot of news happening quickly and a lot of what you hear is provider organizations hiring AI agents to go bill better and help their rev cycle. And then what happens? The payer organizations buy their own AI to potentially put up more walls or deny claims or make it even higher, harder with prior authorization. And that's kind of the most more negative version of things the way we think about it. Just stepping back for a second, we think there's no better time to be building a health insurance company than in 2025. Obviously there's been a long history of upstart payers who to your point, has been largely a very challenging experience. But if you look under the hood of what health insurance truly is, it's people, it's processes, it's payments, it's a set of rules, it's data shifting around, it's a financial services company. And all of those things combined we think are uniquely great for AI today in a first principles way. And we just know the AI is going to be 100x better in 2030. So how can we infuse AI truly from the start of everything we think about in terms of our operational processes and the way we think about delivering care. And so, you know, Mending's version, this is how it kind of manifests today for us. One like I said earlier, we got our start and a deep part of our company DNA is that the philosophical belief is that payers should be building technology to make providers lives easier. So for a lot of the doctors that we work with, primary care doctors, some direct primary care doctors from day one, we have a very unique relationship with them where we're embedded with them using AI and technology. For a lot of the doctors, they don't have to have staff or RCM processes to work with us. There's auto benefits and verification. We integrate directly their ehr so that we understand when our members are actually getting care from these doctors. They don't file any claims with us at all. And there's no denial of payments as we look at some of that clinical evidence. So you know, again, going back to how AI is being positioned of two agents fighting with each other in a very calcified pipeline, we think there's ways to really, really reduce the friction between payers and providers and how payers like us can be a very provider friendly organization that ultimately translates to better patient care and better patient experiences. The other thing as I mentioned is we think insurance companies doesn't need to be an army of people to run most processes. A lot of historical and large insurance companies had to build up decades of processes and people and admin to run their SG and a to run their operations. And I think one of the advantages in 2025 is you don't have to scale on people that quickly. You can actually from day one embed automation, customer support, network contracting, even the broker appointment process, all of these things don't need a ton of humans. And we think that savings on operations can ultimately translate to a lot of value and savings when we think about premium prices and the way we and the overall cost of the health care system.
- [08:41]
A
Interesting. And that's such a fascinating little tidbit you just ended with there with Jeff of the, some of the more legacy players, the big ones we see today needing to really build up their staffs because that's what you needed to run an insurance company, let's say 20, 30, 40 years ago. And that's really not necessarily the case anymore as technology has evolved. That's, that's really fascinating. You said that. And I think what's also really interesting is hearing you say that your providers don't, don't need an RCM staff or staff at all necessarily to work directly with you. I think any of providers listening in, that's quite the enticing message given some of their relationships I think probably with other insurers and the staff that they do have to hire to work with them. Let's talk about a little bit. You know you have exclusive partnerships with direct primary care practices and that does stand out or at least that's. That stood out to me because when we hear about this kind of model, usually direct primary care operates outside of the insurance plan. So you know from your experience these last few years, first with TARO and now with Mending, how do you think this model has, has impacted cost for your members? How has it impacted the, the utilization trends you're seeing internally and then what are you hearing on the ground and from providers in terms of is this actually making a dent? Is this making a difference in how they feel in terms of interacting with the health plan?
- [10:09]
B
Yeah, absolutely. So for those of you who maybe are less familiar with direct primary care or dpc, these are a lot of, you know, typically independent physicians in the community who have started their own practices, who effectively their entire revenue model is cash only outside of insurance. To your point, right, these are physicians who have kind of walked the walk in terms of leaving the system. And part of, you know, not this is not the whole reason, but part of this is, is precisely because they were in the business of practicing insurance, not medicine. And they hated the fact that they had to buy all these systems and hire all these people just to deal with how do we get paid by insurance companies. The irony is that to your point, direct primary care is a really unique feature for us as you can imagine. If you approach these DPCs as an insurance company and say, hey, let's partner to a bunch of doctors who have literally left that system. It's an awkward conversation, but from a mission perspective they're really aligned on figuring out how can we mend this healthcare system. And the technology and AI product for them has to be a really high bar for them to say, yes, I'm actually going to become in network with mending. I'm going to accept these insurance insured members and my kind of, my, my day to day, the way I practice clinically is not going to change drastically. And this has impacted cost utilization, member satisfaction in a huge way. One for most of these direct primary care doctors, they're only in network with us and so they have way more time to be spending with their patients. A lot of the annual physicals are 45 minutes to an hour long. You know, patients can go on telemedicine, they can email a lot of doctor, a lot of patients, excuse me, will actually text their doctors directly. And so there's constant interaction between the two. The insurance company, us, we're not the middleman between the doctor and the patient. And that's what they love about the model as well. We have seen early days in our markets of Maine and Oklahoma on a normalized basis per 1,000 members specific to the demographics and market, a 70% decrease in specialist utilization, a 50% decrease in urgent care, 35% decrease in ER. And we think it's because these doctors are actually making themselves way more accessible to our members, managing that care effectively. And because of all these interactions the do the patients feel really satisfied? We have a 97% renewal rate for our members year over year for those who are attributed to one of these direct primary care practices. So again, we're looking for those win, win, win scenarios. And going back to that core belief, if we can free the doctors from this administrative burden and focus on the doctor patient relationship, we think it's going to be better for us in the overall system.
- [12:59]
A
Sure, absolutely. No, it's an amazing renewal rate you just, you just mentioned. But I also imagine, you know, from the physician's perspective, this is an amazing model because, you know, it's obviously not a very easy time to be an independent physician right now. And this just gives you, it sounds like a broader patient base to access from, from their side of things. So that's really interesting. And you mentioned Maine and Oklahoma. I know that's the states you first got started in. Can you educate me, our audience? Where do things stand today? Where are you looking for the future? Are, are you looking to expand into new markets? And you know, what, what have you learned from your initial growth in those two states?
- [13:44]
B
Yeah, absolutely. So we started in Maine and Oklahoma, really as a testing bed. And to understand different populations within the US between those two states, you have urban settings, suburban settings, certainly rural settings, where patient access is really challenging, access to primary care is really challenging. So we felt like there were great environments for us to learn in. We will be expanding into Georgia this fall, which we're really excited about. And I think for us, you know, working in the fully insured commercial space on the exchange, it's a dynamic environment. You know, you have to look at the hospital landscape, you have to look at the other competitor payer landscape, the regulatory landscape. How many hospitals and direct primary care doctors are there available? And so we've learned a lot over the last couple of years of scaling. But I think the common theme for us is as an upstart insurer, understanding the history of other insurers who've tried to compete against the large legacy players. You know, when they zig, you have to zag a little bit and you have to truly, truly find ways to differentiate. The network size is one, premium price is another. But you have to really, you can't use those old playbooks of let's just cut premium prices, grow really fast and big, lose a lot of money and try to come back and fix our economics. And so for us, learnings is, you know, making sure that we scale responsibly, do it in a way that's sound unit economically and then, you know, kind of go from there.
- [15:16]
A
Got it. Cool. So. So you're expanding into Georgia this fall. How do you, how do you think that could influence or how do you think other insurers, what do you think they could learn from, from your scaling? And is there any advice that you would offer those individuals listening in right now in terms of what you've learned this point?
- [15:38]
B
Yeah, I guess, I guess it depends on who's listening and if you're certainly sitting on the legacy insurer side versus the kind of. You're with us in terms of being a startup player here. Yeah, but I go back to that differentiation where I would also encourage even the legacy players to rethink how they think about their provider network. And it's not just direct primary care, it's finding different ways to truly create personalized and differentiated products that the market demands. You know, even with Ichra now, you're seeing more and more employers give that money to their employees and those employees are looking for very personalized plans that speak to them. But the, you know, the, the, the way provider networks have been built over the last couple of decades of fee for service contracting and just continuing to kind of build those reimbursement rates, we feel like there's going to be room for, there's opportunity set to really figure out how do you differentiate truly on network, how do you use AI to be able to augment your, your care navigation, what are some of these tools that are now available that weren't available even five years ago and to kind of double down, triple down in those areas?
- [16:55]
A
Yeah, no, it's good advice. And I wonder, anything else you want to mention today? You've obviously we've got a lot of health plan listening in I think from both sides of the aisle in terms of non conventional and some of the legacy players. Any final thoughts you want to share?
- [17:11]
B
Yeah, I think, you know, especially at the time of this recording, there's a lot happening in healthcare and yeah, you had mentioned too, a lot of negativity and understandably so. I think no one can truly, truly predict the outcome of the one big beautiful bill. Everyone is navigating the landscape. My overall advice to folks, and we say this constantly to the internal team, is amidst all this uncertainty, the challenges, even the chaos, like find the opportunities, there actually is a set of positive opportunities. It's going to be tough. I'm not saying it won't, but in uncertain times, there's also at the same time a way to radically change how we think about delivering healthcare, how we think about building some of these systems, and I'm personally very excited and optimistic even amidst everything. I think it's time to get creative and these times of uncertainty create these windows where we feel like we can offer truly novel products and see if we can break the paradigm of how an upstart insurer could succeed in this space.
- [18:19]
A
Awesome. Well, I think that's a great place to leave things, Jeff. So I want to thank you for taking the time to sit down with us and for sharing your insights and future growth plans at Mending with our audience. We really appreciate it.
- [18:32]
B
Thanks so much for having me.
- [18:33]
A
And to our audience. If you'd like to listen to more podcasts from Becker's Healthcare, you can visit Beckershospital Review.com.