Circulo Inc. was spun out of Columbus-based Olive AI Inc. to apply artificial intelligence and administrative automation to make a better Medicaid managed care provider.
Over its first nine months, the circle widened.
"We quickly realized there were other areas in the overall Medicaid ecosystem that were ripe for disruption," said Mike Renn, director of operations. "Providing great access to care – there isn’t a limitation to that."
Subsidiary Circulo Health of Ohio Inc. was licensed as an insurer in the state earlier this month – but Circulo was already rolling.
Related story: AI-powered Medicaid startup Circulo is licensed to do business in Ohio
Olive founder and CEO Sean Lane started Circulo in February with $50 million in venture capital backing. The main AI business is spinning out other startups for specific applications of its core technology.
Over the summer, Circulo acquired a home and community-based services agency employing direct caregivers who help people with developmental disabilities live independently. The name was not disclosed.
The agency operates in five counties, and Circulo aims to take it statewide, employing hundreds, mainly through organic growth.
"There’s relatively low barriers to entry to expand that business throughout the state," he said.
In contrast to the insurance side of the business, home and community service providers are regulated by the Department of Developmental Disabilities. The state agency and, in some cases, county boards pay the agencies using a portion of state Medicaid funding, sometimes augmented by local levies.
Circulo digitized employee onboarding, orientation, training, payroll and daily record-keeping with clients. Online modules help trainees work through the steps toward state certification.
"Any high-volume service business has room for automation," Renn said.
Besides improving employee and client satisfaction, he said, the data gathered creates insight to better manage each case.
The company raised caregiver minimum wage to $15 hourly; in some of the five counties it had been less than $12, Renn said. And it expanded benefits including paid time off and retention bonuses, competing in a high-turnover industry.
"Employee retention is critical to success in this industry," he said.
Circulo plans to cover higher wages through a combination of reducing costs from turnover, savings from administrative automation and willingness to make lower margins than most agencies. As in any startup, it's spending ahead of revenue to fuel growth at first, Renn said, but "over time, we believe the unit economics are favorable."
"We’re not here to have a 30% bottom line," Renn said. "There’s a lot of value on the table. We can put that back into the providers themselves.
"Why others have not decided to do it, I can’t speak for them."
Ohio Provider Resource Association, a trade group for home services providers, did not immediately respond to a request for comment through its online contact form.
Next year, Circulo's insurance subsidiary intends to bid on an Ohio Department of Medicaid pilot program using AI to lower costs for managed care in the adult Medicaid expansion population.
Opportunities are "endless," Renn said, to reduce waste and improve access and outcomes for underserved populations. The company has to prioritize.
Circulo has outfitted a van with a wheelchair ramp and teleconferencing equipment for virtual psychiatry visits, to take it to rural Ohio communities where there's a "massive" unmet need for behavioral health services, he said.
Also next year, the startup plans brick-and-mortar primary care clinics. Teams of physicians, nurses, social workers, nutritionists, physical therapists and others would take a holistic approach to healthcare, again leaning on Olive's administrative automation.
"We want to continue to invest in the future of Medicaid," Renn said. "At our core, we're providing higher quality access to health."
