Why We Invested in Clever Care
Deal Team: Victoria Cheng, Adi Sivaraman, Hannah McQuaid
As the Annual Enrollment Period for Medicare kicks off, we wanted to share why we invested in Clever Care’s $71M Series B funding. We are extremely excited to partner with the first Medicare Advantage plan to enable Medicare beneficiaries interested in holistic care and Eastern Medicine to access the ways in which they wish to consume healthcare services. Clever care offers a truly integrated approach to providing comprehensive care and coverage for traditional medical and dental benefits with additional coverage for benefits such as acupuncture, meditation, and herbal supplements. Here at PruVen Capital, we have been focused on investing in solutions that enable more predictive, preventive, and personalized healthcare. Clever Care is an example of that thesis.
Targeting a Unique Sub-Segment of a Rapidly Growing Market
Medicare Advantage has nearly doubled in the last decade, driven by a combination of America’s greying population (10K baby boomers age into Medicare daily) and the increased penetration of Medicare Advantage relative to regular (Original) Medicare plans. Only 24% of Medicare recipients had Medicare Advantage plans in 2010, compared to 37% in 2010 and that number is expected to grow to 50% by 2025.
As MA plan adoption becomes more widespread, Medicare beneficiaries are demanding plans that are more consumer-friendly and better meet their needs: flexible, affordable, and member-centric. Existing plans have failed to live up to this new demand and most MA plans continue to take relatively one-size-fits-all approaches. The proliferation of Medicare Advantage plans is driving a broader trend toward plans that are personalized and designed to fit the care consumption patterns of their member populations. This includes plans that are designed for populations who take a more preventative approach to care, such as through active lifestyles, better diet, massage therapy, and alternative herbal supplements. This all means that Medicare Advantage plans are evolving to become more targeted and specific to member needs, driving increased consumer choice.
While there have been cultural affinity MA plans before, there are no significant players of scale today focused on the Asian American community and the growing community across America interested in Eastern medicine. There are ~2.7M Asian American Medicare beneficiaries today, the majority of whom have been largely underserved by existing MA plans which fail to address the way this population of seniors access health care. Clever Care launched in 2020 in Southern California before expanding into Northern California, New York, and Texas. The East Asian population in these initial markets alone is 872K; starting with an assumption of the standard industry average annual MA premium of $10K, Clever Care has a nearly $9B market opportunity just in its initial markets. The overall opportunity is closer to $30B across the United States.
A Purpose-Built Product for an Underserved Population
Clever Care is a Medicare Advantage plan that is designed with the end customer – Medicare recipients who favor holistic and Easter medicine – squarely in mind. This includes everything from distribution channels, cultural sensitivity around how to speak about healthcare, reducing language barriers, and providing the right suite of benefits.
Clever Care’s core product is the network of PCPs, specialists, and covered benefits that the plan offers to members. The providers on the network are bilingual and speak languages reflecting the populations they serve. In addition, Clever also has a specialist network of native language acupuncture providers and provides acupuncture as a fully covered benefit. Finally, Clever’s network also includes native language herbal medicine providers, which is also fully covered as a benefit under the plan.
Importantly, Clever Care was built to align with the pre-existing care consumption patterns of its target member population. Clever Care plans are cheaper on average than standard Medicare Advantage plans from legacy payers in the same geographies, which don’t cover any Easter Medicine benefits. Many Clever Care members were already paying out of pocket for this prior to switching plans.
It’s very rare to be able to provide a better product for a lower cost, and we view this as a strong indicator of 1) innovation and 2) excellent product-market fit. In the case of Clever Care, the innovation IS the product-market fit – Clever Care created an innovative MA plan tailor-made for a population with strong demand for this product.
Though it is still early, we are seeing signs that the market is enthusiastic about Clever Care, with strong enrollment numbers for both 2020 and initial signs of exceptional growth during this upcoming Medicare enrollment period. We are extremely pleased to partner with Clever Care and look forward to joining them on their journey!