Through the years, Glen Tullman’s disdain for healthcare gamers like payers, care navigators and advantages consultants has been nicely documented. Tullman based Transcarent in 2020 with the notion that good software program eliminates all of the friction within the center, bringing suppliers and shoppers collectively effectively thereby decreasing employer prices and bettering the affected person expertise. He has declared over and over that Transcarent isn’t a navigator, likening navigators to out of date journey brokers.
Regardless of this historical past, Tullman — ever the savvy marketer — made a slightly gorgeous announcement in January. Completely timed with the annual J.P. Morgan Healthcare convention in San Francisco — when healthcare reporters are primed to report on offers massive and small — he revealed that Transcarent was shopping for care navigation firm Accolade for $621 million and taking it personal.
Wait, whaaaat?!!!
This text will study how Transcarent has fared within the market since its founding and what may have probably led to this unlikely marriage between Transcarent, primarily based in Denver and Accolade, primarily based in Seattle. By a consultant, Tullman declined to be interviewed for this text, even after being made conscious of the character of the story. Neither did the corporate agree to supply a Transcarent buyer for an interview. Tullman didn’t reply to a textual content. [For those, who don’t want to read this long article, here is a video synopsis]
How are you going to get from “You may’t navigate a damaged system” to purchasing the biggest, if struggling, care navigator? There may be irony and a sure form of hypocrisy on this 180-degree flip. Again in 2021, Tullman, a celebrated digital well being serial entrepreneur, supplied an in depth rationale for why he didn’t worth care navigation. In a joint panel dialogue with the big-name healthtech disruptor – Jonathan Bush of athenahealth fame – on the annual HLTH convention in Boston, Tullman mentioned the next [slightly edited for clarity]:
I’m not as type to navigators as a result of I feel navigators are yet one more step on this course of and you’ll’t navigate a damaged system. Once we had been at Livongo, individuals would say, ‘We now have a navigator and as an alternative of going on to our individuals, we undergo the navigator.’ Once we went on to individuals, we received 35, 40% of the individuals to decide in and once we went by way of the navigator it was like 12%. It was yet one more step and other people need simplicity. So the very first thing is – you may’t navigate a damaged system. For those who break glass in a room, if you’re in healthcare you’d say ‘I wish to clear a little bit house after which I’ll rent any individual once I wish to stroll by way of the room, [and] they’ll remind me of the best way.’ Most of us exterior of healthcare would simply sweep up the glass. In order that’s what we now have to do – sweep up the glass.
[Livongo refers to the diabetes and chronic disease management company that Tullman ran and that he successfully sold to Teladoc for an eye-popping $18.5 billion. It was a historic deal in digital health. What happened to Livongo, thereafter, is a travesty in the world of digital health, though opinions vary on who is to blame. More on that later.]
When Rajeev Singh, the CEO of Accolade, who was additionally at HLTH in 2021, heard of Tullman’s characterization of navigation, he was emphatic in his opposition to this imaginative and prescient:
“You want navigation groups,” he informed MedCity Information. “They should be powered by major care physicians and psychological well being specialists who can really ship the care and we’ve executed so in a digital mannequin that claims, ‘You’re going to see a major care doctor, they’re going to stick with you thru your journey.’”
Singh took exception to the Transcarent mannequin (at the very least at the moment) that charged solely when individuals used the service versus having employers pay for the complete inhabitants. It was shortsighted, he felt. He added:
“I feel what’s incorrect with Glen’s mannequin of solely charging for the individuals who want the assistance is that folks don’t know the place to go after they want the assistance. Glen’s mannequin is after the very fact, and that after-the-fact-call-me-if you-need-me mannequin has been confirmed time and time once more to not enhance outcomes and never management prices in healthcare. We do cost for the entire inhabitants. Fashions like Glen’s say – ‘I’m going to present you a greater end result on that episode of care’ [but the employer is thinking] ‘I purchased all these providers to enhance my episodic care and but my pattern line goes up’ and that’s been true for consumers for the final 25 or 30 years.”
In November 2021, when Singh defined the above to MedCity Information, Accolade was in higher form, although the inventory slide to close oblivion had begun.
Quick ahead to 2024 and Accolade had misplaced giant purchasers like Comcast, lower its workforce and closed workplaces to include prices in a bid to satiate Wall Road. However the firm had nonetheless devolved to a penny inventory. By the top of summer time final yr, individuals within the know realized that Morgan Stanley was procuring the corporate round for a purchaser. Tullman swooped in to take the corporate personal in what is essentially seen as a hearth sale.
Why would somebody who brazenly denigrated navigation as a reliable class inside the healthcare ecosystem purchase essentially the most well-known, though struggling, navigation firm? Why purchase it for even a penny if it’s so exterior your imaginative and prescient of healthcare disruption and affected person empowerment, not to mention for $621 million?
There are two attainable causes:
1) The Transcarent mannequin has completely failed.
2) These profit brokers and consultants, HR professionals and well being plan middlemen are so highly effective that they shut out Transcarent completely for making pejorative statements in opposition to them, thereby making Tullman a sufferer of the system he tried to disrupt, forcing him to seek out his manner into the arms of care navigator Accolade.
“The gross sales staff offered little or no organically“
Interviews with a number of individuals – former workers of Transcarent and Livongo, healthcare executives who’ve recognized Tullman a very long time, rivals — reveal that Transcarent has fallen nicely in need of the bold purpose outlined in its tagline: “One Place for Well being and Care.”
A former Transcarent worker mentioned that Transcarent’s new enterprise gross sales goal for 2024 was $175 million from self-insured employers and channel companions mixed. However the particular person bets they didn’t obtain that final yr.
“I might say that they’ll have completed out 2024 wherever between $55 million to $60 million, which is 30 % to their new enterprise gross sales purpose,” mentioned the previous worker, who didn’t know what Transcarent’s whole 2024 income was and didn’t wish to communicate on the document due to a nondisclosure settlement.
Leslie Krigstein, vice chairman of communications and authorities affairs at Transcarent, declined to supply income figures for 2023 and 2024, stating that it’s a personal firm. She famous that the corporate covers 4.5 million lives and has greater than 400 workers.
Transcarent has raised $424 million and has a valuation of $2.4 billion as of March 2024, based on Pitchbook. Fundraising is certainly one of Tullman’s key strengths. In the meantime, in digital well being particularly, valuation is kind of nebulous, pushed by some onerous knowledge but additionally infused by an estimation of future market potential, which in flip is fed by the entrepreneur’s storytelling functionality. Anybody who has adopted Tullman, particularly from his Livongo days, is aware of that his fundraising and advertising capabilities are legendary.
“Glen elevating cash isn’t a problem,” mentioned one former affiliate. “I imply he may choose up the telephone and lift cash. He’s an incredible storyteller and newbie magician. However like all story and magic trick, generally it’s onerous to inform what’s actual and the trick doesn’t work. ”
A former Transcarent worker who left in January 2024, countered this characterization.
“I’ve heard over a few years – ‘Glen’s smug, Glen’s this, Glen’s that,’” recalled Jeff Dobro, who was the chief innovation officer of Transcarent. “He’s an aggressive CEO like all profitable CEO, however I might let you know personally, I feel he’s essentially particular person and chief. Particularly at this level in his profession, he’s in it as a lot for the mission as for making one other $18 billion.”
To get wherever near that determine sooner or later, Transcarent must display success within the market at the moment. However the former worker mentioned that the $175 million gross sales goal for 2024 was fully unrealistic and not one of the merchandise Transcarent sells has been very profitable.
The corporate’s merchandise embody:
- “care experiences,” as referred to by Transcarent, which give attention to muscle and surgical procedure care, most cancers, weight administration and psychological well being.
- a pharmacy profit app launched in 2022 in partnership with Prescryptive Well being. One other accomplice is Mark Cuban’s Value Plus Medication.
- the AI WayFinding instrument, a chat-based software program instrument launched in Might, which is supposed to supply solutions to worker questions on advantages and can even navigate customers to care primarily based on their wants.
Inside these illnesses talked about above, any digital care is powered by a telemedicine platform Transcarent acquired when it purchased some belongings of 98point6 for about $100 million in 2023. The Surgical procedure Facilities of Excellence community, the core Transcarent enterprise round which Tullman has added different services and products over time, was additionally acquired. It navigated workers to cheaper locations to acquire surgical procedure. This got here from Transcarent’s Bridge Well being acquisition in 2020.
Regardless of the number of merchandise, not a lot new enterprise was coming in by way of the doorways, the previous worker mentioned. The three largest self-insured purchasers of Transcarent are Allstate, Apple and Boeing, and Boeing was inherited from 98point6, based on the previous worker. An Apple spokesperson didn’t reply to an electronic mail confirming the connection. The corporate was not on the record of consumers that Transcarent supplied.
“They offered little or no organically. Most of Trancarent’s purchasers are from corporations Glen acquired and the remainder had been offers influenced by Glen and/or his pals and funding companions,” the worker mentioned.
This narrative conflicts with what Tullman has mentioned publicly. Within the January 8 press launch asserting the acquisition of Accolade, Tullman was quoted as saying that in January alone, Transcarent added “greater than 500,000 members to our platform together with a few of the most progressive, and revered employers on the earth….”
Nevertheless, no new employer was named within the announcement. Krigstein, Transcarent’s spokeswoman, mentioned UPS, Pilot|Flying J, Navistar, Allstate, Banner|Aetna, Boeing, Chipotle, Chubb and Walgreens are present prospects that Transcarent is allowed to call publicly.
Transcarent is excluded from RFPs
Whereas Transcarent flexed its January membership numbers, others shared the angle of the previous worker — Transcarent is performing poorly within the market. They aren’t getting in entrance of self-insured employers by way of RFPs, a key approach to win new enterprise.
“There have been over 70 RFPs final yr within the employer navigation market – they weren’t in any single certainly one of them,” mentioned a former enterprise affiliate.
In different phrases, Transcarent didn’t even have the chance to bid for the enterprise in every of these cases. However even after they had been included, that they had few wins.
“Of the RFPs they had been concerned in, they received solely 2-3 and people had lower than $1 million income potential,” mentioned a senior chief at a competing firm.
Why had been they excluded from RFPs? Listed below are some attainable causes:
- Tullman has described profit managers as pointless middlemen who’re solely in it for the charges and never searching for the pursuits of employers. Usually leveraging his C-suite connections, Tullman would bypass HR and advantages professionals and promote on to senior executives, upsetting the profit brokers intensely. They responded by shutting Transcarent off from RFPs.
- Transcarent has a number of merchandise and none of them is nice. There’s no singular give attention to creating something best-in-class, making the job powerful for gross sales individuals.
- The corporate doesn’t present advocacy sources for shoppers. For example, if workers or well being plan members get a invoice they don’t perceive, they’ll’t name a Transcarent customer support consultant for assist. Not like bigger gamers in navigation like Accolade, Included Well being or Quantum, Transcarent doesn’t have name facilities that may assist the common Joe.
- Transcarent does little or no utilization administration on behalf of employers and plans. Let’s say an worker is really useful for again surgical procedure. Corporations like Accolade, Quantum and Included Well being can carry out the evaluation to see if the process is medically obligatory and decide whether or not all the foundations set forth by employers to acquire protection have been adopted. These corporations can work with the worker’s doctor and the third occasion administrator employed by the self-insured employer to achieve a choice and talk that to the worker. Transcarent, if required, can do utilization administration however solely on an advert hoc foundation. It has no formal infrastructure — no staff of clinicians who can work with a plan’s claims division and worker’s supplier — in place.
The previous worker mentioned that of the profit brokers — the Aons and Mercers of the world — WTW (Willis Towers Watson) had essentially the most animus in opposition to Transcarent.
“There was one senior particular person at WTW. He was the primary blocker of Transcarent nationally,” the previous worker mentioned.
A WTW consultant declined to remark, citing a coverage of not commenting publicly on particular corporations.
One other former Transcarent worker confirmed such exclusions.
“It’s very true that in 2021 and 2022 it was fairly a job to simply get included within the RFPs,” the particular person mentioned. “By the start of the 2023 promoting season, going into 2024 we had been included in each related RFP with the six or seven main broker-consultants on the market.”
Nevertheless if the RFPs had necessities asking for the seller’s ratio of variety of workers it could cowl to the whole variety of navigation professionals it had, Transcarent would get “disqualified” as a result of that wasn’t the enterprise mannequin. That repeated disqualification led this former worker to convey up the worth of navigation to Tullman, however these issues didn’t change the CEO’s thoughts.
“Glen emphasised, ’We don’t wish to be navigators, we wish to discover a totally different manner to assist individuals.’ However across the starting of ’24, perhaps the top of ’23, employers had been telling the C-Suite and Glen that, ‘Our members actually are form of misplaced on the market,’” the particular person mentioned.
That healthcare, certainly, is riddled with of us within the center benefiting from opacity within the system isn’t disputed. In a fashion, Tullman was gutsy in calling out the institution. So, the truth that the profit consultants routinely blocked Transcarent – if that is true throughout the board for all main brokers within the nation – appears to bolster the concept that Tullman took on entrenched pursuits, which had a damaging enterprise influence on Transcarent. In different phrases, he’s a sufferer of the system he aimed to disrupt.
However sources interviewed for this text didn’t agree with that characterization. Tullman declined to sit down for an interview.
“If Transcarent had the very best merchandise, the profit consultants wouldn’t care about what Glen has mentioned and can be extra open to battling their well being plans and PBMs,” one former worker mentioned. “They’d purchase the merchandise at scale.”
The supply added that within the surgical facilities of excellence area, rivals like Carrum Well being did a a lot better job than Transcarent when it got here to serving to employers maintain down their surgery-related prices, particularly in most cancers. A CEO who has recognized Glen for over a decade equally mentioned Carrum, Lantern and Contigo Well being are all superior to Transcarent within the surgical COE (Facilities of Excellence) enterprise. Contigo Well being counts Walmart as a shopper.
A competitor put it like this:“In lots of offers they’re not even introduced in, however after they’re introduced in, I imply their whole variety of wins in 2024 was two-to-three and in nearly each single case, the rationale they received that deal is as a result of Glen both knew the C-suite or a board member. It wasn’t received as a result of the benefit of the answer helped them within the deal.”
The particular person famous that Transcarent is pursuing too many issues and doesn’t have a “best-in-class” product in any of them – they’re stretched too skinny.
Take an opportunity on Transcarent
The shortage of recent enterprise was so worrisome that salespeople had been apparently directed to supply efficiency ensures in change for brand new enterprise.
“He informed all potential employer purchasers that for those who take an opportunity on Transcarent, you received’t lose any cash on this system, and for those who do, there can be monetary ensures on the backend,” mentioned one former worker.
In change for the ROI ensures, the gross sales individuals usually requested purchasers for permission to make use of their names and/or emblem in external-facing communications and advertising, this particular person mentioned.
In the meantime, Tullman would leverage his enterprise contacts to attempt to promote on to prospects. The CEO who has recognized him for greater than a decade paints the technique of promoting on to executives in harsh phrases.
“I feel Glen preys on the advantages consumers who shouldn’t have a ton of sources to know that there’s nothing underneath the veneer that he’s presenting. There isn’t a Transcarent mannequin. They don’t have any NCQA designation, no URAC designation. They don’t have any onerous normal accreditation for care administration,” the chief mentioned. “He invests some huge cash in political connections and in being a part of CEO golf equipment that give him entry to board members that don’t know a lot about advantages. He’s very charismatic and a fantastic marketer.”
The previous affiliate mentioned that lack of a compelling enterprise mannequin is likely one of the the reason why Tullman tries to bypass advantages professionals.
“He doesn’t like coping with profit consultants like Mercer or Willis, who employers usually use to vet new applied sciences and may ask questions that may cease the employer from taking the dangers or choosing a vendor or do due diligence on whether or not one thing works,” the particular person mentioned.
The Transacrent-Livongo parallel: “Two turds…”
Leveraging enterprise connections for a profitable sale is routine in gross sales. So, there could possibly be a component of jealousy in what the naysayers say about Tullman’s techniques. He actually instructions consideration within the market. He has taken two corporations public in healthcare — Allscripts and Livongo — which in themselves aren’t a imply feat, and has invested in lots of corporations by way of 7wire Ventures, the enterprise capital agency he co-founded with Lee Shapiro. He additionally achieved what no different CEO has — promoting a illness administration platform for $18.5 billion within the deal that introduced Livongo to Teladoc in 2020, a historic deal in digital well being.
However it’s what occurred to Livongo thereafter — the writedown that Teladoc needed to take to offset the acquisition on condition that gross sales by no means actually panned out — that irks associates and rivals. Livongo was constructed little by little by cobbling collectively belongings that weren’t revolutionary by any means, sources mentioned. They argue that the identical factor is going on at Transcarent. Take the AI-powered software program and telemedicine enterprise of 98point6, which Transcarent purchased for roughly $100 million in 2023.
“They had been dropping 60 cents for each greenback of income they made,” mentioned the healthcare CEO who reviewed 98point6 funds earlier than passing on it. “Glen has a sample of taking distressed, low-quality belongings after which slapping a bunch of tech collectively.”
The “sample” remark is clearly a reference to Livongo and that general sentiment was shared by one other govt – Jonathan Bush, the straight-talking, potty-mouthed healthtech disruptor. Bush based athenahealth, was pressured out years later, and now leads Zus Well being. Ever the garrulous character, right here’s how he described Livongo.
“What was Livongo? It was a fricking [glucose monitoring] firm and a training firm and Glen put it collectively and mentioned,’No, it’s a diabetes firm.’ This firm was on the market attempting to promote these displays and lumbering alongside and no one cared. And it was put along with this massive advertising factor [and the story became] ‘No, we’re going to handle pre-diabetes. We’re going to promote it proper to the employer,’” Bush mentioned. “Simply sensible. That was an effective way of taking two turds and making a chocolate cake.”
Livongo was created out of EosHealth, which made a glucose monitoring machine in a position to join the consumer to a diabetes nurse, wherein 7wire Ventures had invested. It was renamed Livongo when 7wireVentures acquired it and Tullman grew to become CEO.
Bush mentioned the identical story is taking part in out at Transcarent.
“You purchase a surgical heart chain and also you say it’s not a surgical heart chain. It’s Transcarent. Like no, it’s not. It’s a f-ing surgical heart chain,” he declared.
When Bush was reminded that he complimented Tullman onstage at HLTH in 2021 for his success in taking two corporations public, promoting Livongo to Teladoc and for his imaginative and prescient at Transcarent, Bush countered:
“Yeah, I feel it’s crucial that you just write down in your article, ‘Glen Tullman is a very, actually profitable entrepreneur as a result of he’s a very, actually good salesman. He’s organized and disciplined and relentless.’ I’m unsure he would thoughts me saying he’s not notably interested by constructing actually transformative merchandise.”
However was the failure of Livongo after Teladoc acquired it Tullman’s fault? Some, like Bush, consider “Livongo was a lemon disguised as a Ferrari.” Others put the blame squarely on Jason Gorevic, the then Teladoc CEO who negotiated the deal. Gorevic resigned from the corporate final April.
“Teladoc grossly overpaid for an organization that had $300-plus million in income,” mentioned one former worker of Livongo. “They need to not have paid quite a lot of billion. Disgrace on Teladoc for overpaying. There was no provision within the settlement for senior management to be retained. In just a few months, key executives had been all gone and Teladoc had no concept tips on how to promote the product. Livongo didn’t change or innovate the product for years, and when Teladoc purchased it, they didn’t innovate both. The rivals morphed and caught up. Livongo was product but it surely was the identical product for six years with little innovation.”
Gorevic didn’t reply to an electronic mail requesting remark.
“Glen did a financial institution heist with the Teladoc deal,” mentioned the healthcare CEO. “Good for him, however individuals have seen that Livongo was a home of playing cards. They aren’t going to be fooled once more.”
The senior chief at a competing agency expressed an analogous sentiment.
“From my standpoint, I completely don’t need one other Livongo catastrophe,” this particular person declared. “I imply, digital well being was set again by what occurred with Livongo.”
Whereas the above could be true, it’s necessary to notice that ought to the deal between Transcarent and Accolade be accepted, Transcarent may turn into a headache for rivals – these interviewed and never interviewed for this text – given Accolade’s footprint within the employer world.
“He’s holding his nostril and swallowing the deal”
Nobody disputes that working with employers is tough and that it’s a protracted gross sales cycle. It’s a lot tougher for smaller corporations like Transcarent to beat incumbents as a result of to get traction you might want to present scale. As one former Transcarent worker mentioned, each Quantum Well being (based in 1999) and Included Well being (based in 2011) have been at it for some time and underwent totally different iterations to morph into what they’re at the moment. Accolade, which is extra a services-heavy, people-heavy enterprise slightly than one powered by tech like Transcarent, was based in 2007. In contrast, Transcarent was based solely in 2020. So it’s not stunning that Transcarent hasn’t been tremendous profitable within the market.
What’s stunning is Tullmans’ 180-degree activate navigation.
It seems that Transcarent wanted Accolade a lot that Tullman referred to as Singh, Accolade’s CEO, out of the blue in late July of final yr to precise his curiosity in shopping for Accolade. That was roughly 5 months earlier than the ultimate deal was publicly introduced.
“Glen felt insurance coverage corporations wanted to go, profit brokers wanted to go and navigators wanted to go,” mentioned one healthcare CEO. “There’s some mental dishonesty round shopping for Accolade.”
So, Transcarent clearly needed to purchase Accolade after which presumably do what it has tried with different corporations — cross-sell its personal merchandise to Accolade’s shopper base. One such product is the chat-based WayFinding answer. Wall Road analysts famous that WayFinding is doing nicely within the market, though one former worker and competitor solid doubt on its success.
Transcarent wanted Accolade to get scale, to be included extra broadly in navigation RFPs. However did Accolade discover its approach to Transcarent with open arms? Did its board really feel the love?
The proxy assertion that Accolade filed with the SEC earlier this week reveals how Accolade shopped round its enterprise unsuccessfully for months — at one level receiving a bid for $10.30 a share from an organization that Accolade itself was initially hoping to accumulate. This provide was greater than $3 per share greater than what it lastly offered for, though by that point Accolade’s share value had declined additional. Representatives of Accolade’s board contacted almost 30 corporations and personal fairness companies however by no means thought-about Transcarent as a worthy match. Tullman’s curiosity was wholly unsolicited.
The truth is, Accolade’s board rejected the preliminary bid of Transcarent, which provided to pay $6 per share for Accolade. Not solely was the bid not excessive sufficient, however they didn’t trust in Transcarent’s monetary wherewithal to finish an all-cash deal.
In accordance with the proxy:
“The Accolade Board, together with the members of the Particular Committee, mentioned Mum or dad’s [Transcarent’s] September Proposal, together with issues with respect to Mum or dad’s skill to finance a possible transaction, dedicated curiosity, and lack of historical past efficiently finishing transactions of the proposed measurement and nature, decided to not transfer ahead with Mum or dad as a possible counterparty at the moment, and directed Morgan Stanley to speak to Evercore that Mum or dad’s proposal was inadequate for Accolade to have interaction additional concerning a possible transaction.” [Evercore was the financial advisor of Transcarent in this deal]
In the end, after a few again and forths, the worth settled at $7.03 per share for a complete deal worth of $621 million, the quantity Transcarent would pay to take Accolade personal. Basic Catalyst and Tullman’s 62 Ventures are forking over the cash in change for extra fairness within the mixed firm.
“He’s holding his nostril and swallowing the deal,” mentioned the healthcare CEO referring to Accolade’s Singh. “He doesn’t like Glen.”
After agreeing to an interview by way of LinkedIn messaging, Singh by no means responded when immediately emailed. Neither did an Accolade public relations skilled. As talked about beforehand, Transcarent’s Krigstein was made conscious of the character of this text with repeated requests for an interview with Tullman, which had been all declined. Tullman didn’t reply to a textual content message despatched to his cell phone.
The deal is predicted to shut pending a vote from Accolade shareholders within the second quarter of this yr.
Will the Transcarent + Accolade succeed if the deal is accepted?
No matter how Transcarent and Accolade ended up in one another’s arms, the actual query is that this: Will they succeed as a mixed entity? Right here’s an emailed assertion from Krigstein, Transcarent’s vice chairman of communications and authorities affairs: “On a mixed foundation, we’re on a path to $1B ARR and double-digit EBITDA margin profitability in three years time.” ARR refers to annual recurring income and EBITDA is earnings earlier than curiosity tax depreciation and amortization.
The responses from exterior the corporate had been blended.
“From the perspective of constructing a big worthwhile enterprise, hoping two negatives make a constructive is a problem. The thesis is …one, that you are able to do numerous cross-selling as a result of Accolade particularly has a really giant guide of enterprise. And two, you can even lower prices utilizing know-how. Sure, the logic is there, but it surely’s very onerous to execute,” mentioned the competitor’s senior govt. “We now have examples of Teladoc and Livongo simply primarily based upon the identical thesis, but it surely didn’t work out. I imply what know-how does Transcarent have or how can they be way more environment friendly in bringing Accolade’s prices down when independently each Transcarent and Accolade are bleeding cash?”
A former worker echoed the competitor.
“Laborious to inform if it can succeed, however I’d guess ‘no.’ Glen has historically been very unhealthy at integrating corporations, and why would placing collectively two struggling corporations abruptly make one profitable firm?”
Bush mentioned it could possibly be constructive for Accolade.
“I imply, Accolade has received numerous prospects and no actual leverage. No less than now they’ve received a sequence of surgical facilities which are less expensive than the large hospitals that they navigate to. Now, I don’t know what proportion of the lives really sit in a spot the place you would use that, but it surely’s an concept. It’s higher than what that they had.”
Others see the transaction as a pure and good evolution for Transcarent. The mixed firm can have wherever from 10 million to fifteen million coated lives, estimated Ryan MacDonald, an analyst with Needham. One other analyst additionally pointed to that golden phrase in attaining industrial success in healthcare: scale
“I feel with Accolade, the primary factor is that Glen will get this quick enlargement to much more lives and purchasers. After which after you have that scale, I feel all the pieces else follows,” mentioned Jailendra Singh, an analyst with Truist Securities. “I’m not going to guess in opposition to his knowledge.”
Honest sufficient, however what in regards to the knowledge of betting in opposition to navigation after which convincing your self and an investor to shell out $612 million for it?
Dobro, Transcarent’s former chief innovation officer, put it neatly:
“Markets change, individuals change. Regardless that you begin with an concept, generally it’s not likely the proper one.”
Quoting economist John Maynard Keynes, he added, “When the details change, I modify my thoughts. What do you do, sir?”
Appears to be like like Tullman did the identical — he couldn’t beat the navigation corporations at their recreation rapidly sufficient, so he modified his thoughts and joined them.
