Arlington startup Predict Health has raised $4 million in seed funding to improve the Medicare open enrollment experience using artificial intelligence.
Shubadeep Debgupta founded Predict Health in 2019, inspired by his father Sailesh's less-than-pleasant experience signing up for a Medicare insurer. If the insurance broker had understood more about Sailesh and his expectations, Debgupta said, the process would have been smoother and a customer, who later changed health plans, might have been retained.
“It got me thinking that this poor experience would have been solved with better data about my father and his buying behaviors,” Debgupta said.
First Trust Capital Partners, a Wheaton, Illinois-based venture capital firm focused on healthtech and fintech companies, led the round that closed on Sept 8. The same firm was an investor in Debgupta’s last healthtech startup, WiserTogether, which was inspired by his wife’s pregnancy. That company was a behavioral data business focused on helping people navigate their healthcare choices. It was acquired in 2020 by Chicago's Evive, a big data firm.
Medicare open enrollment for some 65 million Americans runs from Oct. 15 to Dec. 7, when thousands of insurers vie to retain current customers and gain new ones. Predict Health is applying retail tools and data to help insurers understand the buying and exiting behaviors of Medicare and Medicaid recipients. With that data, health plans can create tailor-made programs to keep their customers.
“Our algorithms are extremely precise and we're able to say in 90 or 30 days, Joe is likely to leave with a 94% probability and this is why,” Debgupta explained.
Debgupta focused his company on customer retention, despite his father’s issue joining a new plan, because he thinks retention is where the most value lies in the market. He claims insurers lose between 60% and 75% of their planholders within five years.
"You can't build a subscription business that's serving somebody's health without retaining them," Debgupta said. “It's an area that has been really challenging for health plans because they lack that data."
Predict Health is headquartered in Rosslyn and has 17 employees. Debgupta declined to disclose revenue but said the company has grown annual reoccurring revenue by 10 times. It plans to use the $4 million to accelerate product development and grow the team by 50% over the next six to eight months.
The biggest challenge Debgupta sees to growth is the competition from other companies that provide health care tech solutions. But he believes the member-level detail the company’s predictive analytics algorithms provide will help Predict Health outshine competitors.
“The company is young and hungry,” Debgupta said. “We're building this for our parents and our grandparents and that's what unites us all.”
