Stella Health, the parent company of Blue Cross and Blue Shield of Minnesota, announced last week it invested $1.5 million in River Health, a subscription-based health services company.
The investment by Stella closes River's $3.1 million seed round and allows the Minneapolis-based startup to expand its services through Blue Cross and Blue Shield of Minnesota's network. (River Health recently moved to Minneapolis from Dallas after participating in a UnitedHealthcare accelerator.)
For $35 per month, River users receive access to unlimited virtual visits, in-person care at 1,200 partner clinics, $5 prescriptions through a mail-order pharmacy, and low-cost lab tests.
River is currently available in Texas, Illinois, Minnesota and New York. By the end of the year, the company is expecting to be operating in 15 states, including California, Georgia, Arizona and Florida.
Founder and CEO Kobby Amoah was motivated to launch River after trying to navigate the health insurance marketplace.
After wrapping his head around copays, deductibles and out-of-pocket maximums, Amoah ended up paying over $250 per month for a plan with a $7,000 deductible.
"What I wanted to build was this Netflix-style health care service that young adults actually want to use frequently," Amoah said. "That's the whole idea behind River."
River keeps its costs so low by straddling the line of major health insurance companies like UnitedHealthcare and Cigna, and discount providers such as GoodRx.
River pays a fixed fee to primary care doctors and nurse practitioners, who are then assigned a group of River members.
This model keeps the incentives of both parties aligned, Amoah said.
"Whether you see all 100 patients or you see only one patient, you're getting that same amount," he said.
Another way River keeps costs down is by using existing clinics instead of burning capital to build its own network. For example, the company is live in all CVS Minute Clinics across the country.
River began operations in February 2020, just as the pandemic caused millions of Americans to re-evaluate how and where they worked.
Amoah said this timing opened up a growing market of gig workers and employers who were willing to give health benefits to part-time employees.
Amoah said the company's growth rate and number of users has fluctuated widely during the pandemic, but is aiming for double-digit growth month-over-month when things start to settle down.
The company currently has seven full-time employees, but that number is expected to double by the end of the year, Amoah said.
Amoah said the company has had multiple opportunities to include other services in its portfolio, but passes on them if it can't find a way to build seamless integration into that service.
"What the company becomes in the next five years we don't know yet," he said. "But at least the guiding principal is to build a well-integrated health care experience."
