Gabriel Perna | June 22, 2021
Medicare Advantage has become an increasingly popular choice for eligible beneficiaries.
In the past 10 years, the number of Medicare Advantage beneficiaries has more than doubled from 12 million in 2011 to 26 million in 2021, according to Kaiser Family Foundation. By the end of this decade, experts say the majority of Medicare beneficiaries will be on a Medicare Advantage plan. A survey from the Better Medicare Alliance found there was near-universal satisfaction with Medicare Advantage’s coverage (98 percent), provider networks (97 percent), and handling of the current health crisis (98 percent). More than 75 percent of seniors on Medicare Advantage strongly oppose any cuts to the program.
This popularity has some health care leaders betting on Medicare Advantage as a potential avenue to reduce health disparities. A pair of Black physician entrepreneurs—Eric Whitaker, MD, and Kenneth Alleyne, MD—founded Zing Health with this concept in mind.
“As Medicare Advantage has been adopted more broadly, the African American community in particular hasn’t seen those same trends. Of Medicare beneficiaries, only 18 percent of African Americans are choosing Medicare Advantage as an option compared to 35-45 percent of other populations. From my vantage point, African American populations are missing out on a lot of great benefits that Medicare Advantage offers. We’re trying to educate underserved populations about those benefits,” Whitaker says.
Whitaker, who spent four years as the Director of the Illinois Department of Health and has numerous stints in public health systems, says Zing is the culmination of his experiences in working with diverse and underserved populations. In the late 1990s, he helped run the first Black men’s clinic in the country on the South Side of Chicago.
Health Evolution spoke to Whitaker about leveraging Medicare Advantage to reduce disparities, the company’s recent acquisition of Lasso Healthcare to expand into more rural areas, challenges in raising capital for a company that targets underserved populations, and more.
Regarding the Lasso acquisition, what will this do for Zing?
We’re trying to improve care for underserved populations. What’s exciting about Lasso, their Medicare managed savings product is one they found to be attractive in rural areas. Our current footprint is in Illinois, Michigan, and Indiana. We’re in urban areas by design. This gives us a complimentary group that we can target and bring value to.
Why has the Medicare Advantage program worked out in your eyes? What can it do better?
In the cacophony of craziness that is the world we live in today, there are very few things that both Democrats and Republicans agree on. Medicare Advantage is one of them. This program has bipartisan support. As a former state health commissioner, when you’re in a position like that, it’s helpful to know what your budget is year to year. In the traditional fee-for-service Medicare world, it’s open ended. You have no idea what you’re spending as a policy maker. More demand means more spend. In a capitated world, as long as you know what you are spending per member, per month, you know what you’re spending overall. I appreciate that from a policy perspective.
From a care perspective, with Medicare Advantage compared to traditional Medicare, you have supplemental benefits. This is one of the areas where Medicare Advantage is moving in the right direction. They are beginning to cover the social determinants of health. As a clinician, I often felt the things I was doing in my exam room were a small part of a patient’s health and wellness compared to the things happening in the community. For instance, transportation is an issue. Food security. Violence. There is a whole lot that happens outside the exam room and Medicare Advantage is moving health care in the right direction by being attentive to these other factors that are critically important for health.
Eric Whitaker, MD, Zing Health
What are some of the challenges you’ve encountered since launching?
One that’s common for founders of color is raising capital. I have had venture capitalists from the largest companies ask me why would anyone want to target diverse populations to provide health services to? These individuals simply didn’t get that people have a different experience with the health system than they have. So, raising capital was difficult.
And then there are the challenges with starting a new insurance plan. Getting health systems to contract with you. That is true of any [insurance] startup. We’re just like everyone else. I would say our target population is different, our expertise is different, the seasoning of our team is different…but it’s still been a fight to get into the health systems that we need for our network.
With all the money that’s flowing into health care from a venture perspective these days, it must be to be frustrating to hear that kind of feedback?
What’s good is I’ve found the right investors. We’ve raised $160 million of equity to date. We actually have Health 2047, the innovation lab of the American Medical Association, as our cofounder. We borrowed their credibility, until we had our own. They put up our initial capital and seed funding. We were also able to get some impact investors engaged. I found the right investors for what we’re trying to do. They bought into my vision of the kind of company I wanted to build.
As part of our DNA, we have the 1-1-1- corporate philanthropy philosophy. One percent of our equity has been put in a foundation that is creating a pipeline of diverse professionals. One percent of our employees’ time can be used to do community service. One percent of our future profits will be invested locally into food pantries and other things that make a difference in the community.
Where do you want Zing to be in the coming years?
We will have a footprint across the country. Lasso really ramps up that expansion in ways I wouldn’t have imagined six months ago. We’re a learning company. As we continue to care for diverse populations, we’ll continue to refine the care model that we’re undertaking. Last year was tough because the care teams we have in the communities, including a behavioral health person, a community health worker, and a nurse, couldn’t go out there and see people in their homes. As COVID restrictions loosen, we need to have teams learning how to provide that kind of care.
One of the things I’ve found in my clinical career is trust is lacking in a lot of health care institutions. We want Zing Health to be a trusted brand. We can work together with community assets to make communities better. My long-term desire is to have some substantive conversations about issues like end-of-life care. It’s challenging when the populations you’re trying to serve think having a discussion like that means you’re trying to take away services from them.
What advice do you have for other health care leaders on reducing disparities in underserved and vulnerable communities?
Do what you say you’re going to do. It’s incremental and slow, but if you make a commitment, fulfill that commitment, make another commitment, fulfill that commitment…over time, people will believe you are really there to help them. It’s a long-term process. There is no quick, easy fix. Trust has to be earned. That’s something that comes through staffing. With the staff we hire, 80 percent of our workforce is African American/Latinx. Someone who has lived experience and can relate to you makes all the difference in the world. I don’t know any insurers, as part of their founding, that have as much diversity as we do. Eighty percent of our clients are Black or Hispanic…although that will change with Lasso, which brings economic diversity among another population that struggles to trust the health care system. When I was a State Health Commissioner of Illinois, I visited 84 of 102 counties. I always came to the table from an urban perspective. I grew up in the South Side of Chicago. I lived there my whole life except when I was at school. What I saw there was serious health challenges, as difficult as the ones I encountered in Cook County Hospital in Chicago. I have a respect for the difficulties that rural populations have in terms of health care.