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16 minute read
In this episode of the Insurance Innovation podcast, join Join Alan Edgin and Shelley Bailey, CEO of Famlee, discussing a new model for affordable and accessible fertility benefits that can save employers and individuals significantly compared to traditional IVF coverage.
For insurance marketers, brokers, carriers and employers interested in fertility benefits, Famlee provides a win-win - happier, healthier employees and dramatic cost savings of up to 30x over IVF solutions. This is an enormous saving for self-insured employers who provide fertility benefits.
Insurance Innovation, brought to you by e123 - the premiere life and health distribution management system.
Episode Transcript:
Narrator
Welcome to e123’s Insurance Innovation podcast, where you'll hear tips, tricks and techniques for improving sales, improving profits and achieving operational excellence. Each episode features an executive guest with a perspective to share, an interesting story and great examples for you to think about. Please give us feedback on the show or talk to us about your distribution management system needs on our website at e123insurtech.com. And now, here's our host, Alan Edgin.
Alan Edgin
Welcome to Innovator’s Circle, our new series that focuses on the core issues of how to innovate, how to use data to innovate, and what the future holds. Today's guest is Shelley Bailey, the CEO and founder of Famlee. As a former independent pharmacy co-owner and champion for those with HIV, Hepatitis-C and other life threatening diseases, Shelley is accustomed to putting up a good fight for the right cause. Little did she know, however, how important her passion and grit would become as it came time to focus on finally growing her own family. At the age of 35 and seemingly healthy, Shelley was unable to conceive in the first months of trying with growing concern, Shelley sought the guidance of her OBGYN, only to be told to just wait and see or there's always IVF. In her heart, she knew there were better options, more proactive steps to take to help her body prepare for a healthy pregnancy from the inside out. So she got to work.
Shelley, thanks for joining us today.
Shelley Bailey
Absolutely, Alan. Thanks for having me.
Alan
So why don't we start with your background and how you started Famlee.
Shelley
Well, absolutely. I guess you shared a little bit about it in the introduction, but essentially, for 20 years, my partner and I owned a specialty pharmacy focused on serving those with HIV and Hepatitis C. So when we sold that company in 2018 it sounds bad to say, but the next thing on my to do list was I wanted to be a mother. And when I wasn't getting pregnant, my OBGYN just said, you meet the medical definition of infertility, which means for those 35 and over that you've been trying for six months without conception. And she just said, I think you should go right to IVF. And I'm very fortunate that that would have been an option for me financially. But I just felt like, wow, can we do something in the middle before we just jump to the most costly medical interventions out there for that condition?
Shelley
And when my OBGYN said that that just really wasn't what she does, I went on my own journey to find a different provider who was more willing to do a deeper dive into hormones and really figure out more root cause issues related to infertility. And so, great story for me. I got pregnant kind of following that approach. I started sending girlfriends to that provider to get that sort of deeper dive into kind of foundational health issues that impact fertility. So at the end of 2020, I decided, wow, I think we really are on to step therapy treatment solution for our families. And so that's when I decided to form Famlee and provide at scale this step therapy treatment solution and make it available to everyone throughout the country, as opposed to just through my little referral network here in the community in which I reside.
Alan
Great. So I will point out, Famlee is spelled f a m l e e, and I believe, Shelley, you have two children now.
Shelley
Correct. I have an almost four year old and a 16 month old. So two daughters here at home, both born using the kind of solution that we offer here at Famlee.
Alan
That's amazing, and congratulations.
Shelley
Thank you.
Alan
So you kind of touched on it a little bit, Shelley, but what were the big challenges in your product design? It was probably kind of a trial and error thing, if I were to guess.
Shelley
Yeah, that's a really loaded question. As someone with really specific background and knowledge in one vertical, which was specialty pharmacy, bringing a product that was kind of completely a new and novel way of treating people was challenging, especially from a product design perspective. I kind of went through the process that many entrepreneurs go through. We hired an ad agency. We hired agencies to help us with this kind of branding and then also used those same companies to help us with design. So I guess the short of it, Alan, I think you helped me answer the question. It was very much a trial and error type of approach related to product design.
I am happy with where it got us to, but we're also always flexible in making pivots as we go.
Alan
Yeah. Doing some research about your solution, it seems to be substantially less expensive than obviously, IVF.
Shelley
Oh, absolutely. I mean, it's certainly less expensive, and it's also a completely different way of treating fertility challenges. So that is one of our barriers that we'll talk about later. But it is definitely a new approach, and we are like one thirtieth the price of more costly interventions.
Alan
So obviously you've got a good model and you've got a good concept. Now the next thing is getting distribution to go out there and to help you out and to help scale your company up. So what are the challenges and how are you doing on building your distribution channels?
Shelley
I think related to challenges related to distribution, a lot of that really centers on the fact that we are doing something new. So we certainly have built the relationships with the traditional kind of broker channels, with the top consulting kind of brokerage houses throughout the nation. But one thing we find is there's some brokers that just maybe aren't willing to kind of dig into the details to really see how we're different. Many brokers are in the small to mid market kind of groups, kind of scared to have the fertility discussion with employers because there's a cascade of other perceived potential expenses that employers sometimes think of related to fertility. So they just kind of want to stay away from it. And then in the large group space, sometimes with brokers, we encounter just a little bit of bias related to the fact of like hey, our client already has a fertility solution kind of from some of the bigger IVF benefit providers out there like Kind Body Progeny and Carrot Fertility. So because of that we feel that we already have fertility handled, we just aren't interested in adding on another vendor couple. That with the point solution fatigue that everyone talks about. And sometimes we're just not able to get some of our broker partners to listen about how we are unique and why we're able to save such a significant amount of savings to employers.
Alan
Yeah, that's a good point and I would think part of your value prop is to say just that. Because if you're talking to especially with consulting houses, they're working with the larger self funded type groups or those types of financial arrangements and I would think they would be keenly interested in being able to save the money especially if their benefit design does pay for some or all of the IVF. I would just think it would be just a function of getting the attention of the broker consultant and saying hey, “this really helps. And this can save your clients a lot of money.”
Shelley
No, you're exactly right. I'll just back up to make sure. I'm also very clear about what it is that we do and how we save in that space. You're right, the captive market, the self insured market, a lot of the interests that we get are clearly from those groups because they can see what their spend is on fertility. The other unique stakeholder group that we hear from frequently are also stop-loss carriers because they see that by helping people avoid IVF, we're also helping manage expenses for million-dollar babies because often in IVF, people implant multiple embryos and then have instead of singleton births, they have multiple births. So there are certainly stakeholders that have certainly keyed into what our unique value prop is. And to be clear about what that is, Famlee offers nationwide fertility telehealth and treatment by combining at home labs with fertility telehealth visits and then prescription medication delivery. And those are low-cost generic medications. So Famlee is not an IVF solution vendor, but we are more that step therapy. Borrowing from my previous career in pharmacy, I always explain our value prop to people as, think of us as that affordable, inexpensive generic medication or generic fertility treatment solution before someone just jumps to more costly interventions. And often they're the most expensive interventions in the fertility space. Right now there's a big trend for ladies in their thirties and forties, as well as just families in general, that people just think, if I'm not getting pregnant, I need to go to IBF.
And especially for those that have a fertility benefit, people don't want to waste time and that's just really where they want to go. So it is a massive educational lift to convey both to consultants and to employers and families, that there is another way of doing it. And the way of doing it is what we're doing here with Famlee, with this step therapy approach where we're checking your hemoglobin, A1C, we're checking your thyroid, we're checking your vitamin D, we're checking for autoimmune conditions, and we're checking for all these things that impact and have a very strong impact on fertility, but often aren't treated by IVF providers.
Alan
So I know that part of your business model is to go after the consulting companies and the large group employer companies, but do you sell to individuals as well?
Shelley
We do have a direct to consumer solution so we do have a direct to consumer solution available Famlee.com. It doesn't include as many of the tests that we're able to provide for our enterprise clients, but it is part of the solution we offer that we make available direct to consumer. What we are able to do for our enterprise customers though is more telehealth visits, more testing and just additional kind of navigation solutions.
Alan
So is the reason that you don't do that for individuals is that the cost would be too prohibitive?
Shelley
That's exactly why right now in the direct to consumer space there isn't companies available nationwide doing what we're doing at Famlee. And again, as we chatted about earlier, the educational lift to teach people that there are solutions that are available at scale before someone goes to IVF is just a huge educational lift that's very costly. So we’re proud of our direct to consumer solution. But we do have more flexibility with what we're able to offer to employers because our solution is just so much more affordable than other treatment solutions that are currently available to employers. But it just gives us more opportunity to add more things to really round out our treatment solution.
Alan
I had a couple of companies and tried a direct to consumer model. It's very expensive and you're absolutely right, it's very expensive to just try to sell generic insurance products that people know about. And to have to educate the audience about what you do and how you do it, I'm sure would be very costly. So I can certainly appreciate your concerns. Which probably leads to my next question. You know, even though you do have a direct to consumer, you're probably leaning towards doing the group brokerage type of business binding that's probably going to have more success.
Shelley
Yeah, absolutely. Because it just gives us by focusing on different points of aggregation, it just gives us the opportunity to really serve more individuals in the most cost effective way for us as a company. The other thing I can say is because I used to be a small business employer by owning a specialty pharmacy and then now as a small business employer again with Famlee, I am really excited. That our solution in large part because of our partnership with e123 we are able to serve employers of all sizes. And I hear that time and time again when we hear from different brokerage houses is how shocked they are that we are able to offer solutions. Because right now in the women's health telehealth space, there are some companies that have $20,000 to $30,000 a year minimums.
And then on the IVF treatment side, most of those service partners don't work with employers under 1000 [employees]. So when we talk about scale and how Famlee’s able to help support employers, it's really exciting for me to be able to tell those brokers and consultants that are working with small and mid market size groups that we have a fertility treatment solution that's also available for them. But because of how we are able to then scale on the billing side and things, we're also able to also serve large employers.
Alan
So do you work with strategic partners? And if so, how do you attract them? How do you get them on board?
Shelley
Yeah, I mean, with different strategic partners we have kind of with cross-selling opportunities and things, we do have a lot of flexibility related to the commission structures that we're able to provide. A lot of that just depends on what the group size is. But because we are innovating and doing something that's very new in the marketplace, our focus is really very much on getting as many covered lives into our ecosystem as opposed to focusing on profit. So because our focus is on getting the covered lives, it does allow us flexibility with our distribution partners on what we can do with pricing to make getting Famlee in front of their employer clients as mutually beneficial as it could be, both for Famlee and for the broker and consultant partners.
Alan
It's interesting. I was talking earlier to an IMO - Insurance Marketing Organization and TPA and they're making a big focus on the ACA business and the under 65 market and they're selling ancillary products that go with it. And I'm just thinking out loud, I would think that your product would have some play in that because a lot of the ACA people are on a pretty strict budget. Your solution is quite reasonable. Just food for thought for you…
Shelley
Well, thank you very much. Yeah, that certainly would be a group of stakeholders that are not going to have any sort of access to standalone traditional fertility benefit providers. So you're right, those would be perfect types of strategic partners for us.
Alan
Yeah, they're not going to be able to afford the $30,000 or whatever it costs for IVF, and they have the same needs as someone that can, so it might make sense for them, especially in your background. Shelley, can you help me understand how your economics work in the brokerage marketplace? What you can share with these listeners here, in case they're interested in trying to participate in what you're doing?
Shelley
Yeah, absolutely. So akin to what other traditional fertility benefit kind of providers do in the space, we do use a PEPM plus utilization model and then we charge for, kind of, utilization case rate. That case rate includes our telehealth visits, our at home labs and the pregnancy and ovulation tests we provide. So it's really, again, kind of back to - because we really are innovating in the reproductive health space. This is really priced to attract both consultants and brokers who are looking for an affordable solution for their clients, but then to be very attractive to employers to add, especially for those that aren't offering any solution and then again for those that do offer IVF. With our success rate at 37%, we're able to bring a very meaningful savings to those employers who also offer IVF.
Alan
Yeah. So specifically, with your brokerage distribution channel, have you tried to do any kind of unique commission type of approach for them? What I would call, in the old days, a fast start program? Well, you can probably over incentify them up to front or have you tried any of that?
Shelley
Yeah, I'm not familiar with the term fast start, but I like that. So thank you for that tip. What we've been doing is we've been giving the entire first year profit that would be associated with that account to the broker or consultant and then with a tail for future years because we do have a partnership with e123, the other thing that makes it very easy for us is that the utilization can either be billed to our employer partners or to the member using their HSA or FSA cards. That type of flexibility, especially for the small to midsize market, I think has been very meaningful to employer clients because for those that are kind of scared about it, being able to give that flexibility that we can bill the member directly is something that's been very helpful.
Alan
So it's a good point and it raises a question for me. So does your service qualify as an HSA or FSA approved vendor?
Shelley
Yes, it does.
Alan
Oh, that's great.
Shelley
We went through all the due diligence with the credit card processing vendors and things for those cards, so it really makes it, I think a lot of people say this, but it really makes it a no brainer for employers to add us into their plan design at any point during the year.
Alan
So I know you talked earlier, Shelley, about somebody that's interested in and your product is the reinsurance carriers. Do you also work with regular health insurance carriers or is it mostly in the reinsurance world?
Shelley
No, we're really able, I think, from that perspective, that's kind of where Famlee can also really shine as being plugged into the utilization management kind of solution with health insurance carriers. We really kind of lean into that vertical as well as the PBM vertical, in part just because of my personal background in pharmacy, but, because we're really able to help reduce some of those higher cost claims, it's very easy to build us in as that step therapy. So when someone attempts to either have different prescription medications filled, that's where some of these carriers are able to kind of add in like a soft edit, where Famlee can be integrated as that first step before any other benefits kick in.
Alan 21:03
So switching gears in other parts of the world, insurance side data is absolutely paramount, and understanding and extrapolating data is critical in the success. So in your model, how important is the data and then how do you use it?
Shelley
Oh, it's important for so many reasons. I mean, on the front end, data is important because we can help our employer partners identify, through evaluating CPT or diagnosis codes, who might be starting their fertility journey. So that we can get in on the front end to hopefully help people get pregnant before they move to more costly interventions. But just as importantly, help support people during this pre-conception phase so that we can help them go into pregnancy healthier. For example, because we test hemoglobin, A1C and fasting insulin, we're able to treat people for their pre-diabetes or diabetes, as well as, let's say, for hypothyroidism. We're able to treat that on the front end.
Which helps them get pregnant but also helps them go into their pregnancy healthier which has a cascade of meaningful impact long chain by helping someone have a healthier pregnancy which then ideally leads to healthier babies. So data on the front end is obviously very meaningful for us to be able to access so that we can help - related to both mitigating expenses but as well as improving health outcomes. But then during the journey, kind of when someone is in the Famlee ecosystem, we obviously use the data to be able to tell our employer clients to kind of report back key performance indicators back to our employer clients. So what does that mean? That means what we've done kind of with deidentified, right? But how have we reduced the groups that's using us, their hemoglobin, A1C? What is our pregnancy success rate? What is our maintaining pregnancy success rate? So there's all sorts of reasons that we need to be mindful of data and how we're using data. But all of that also then helps us report it back to the health carrier partners and things. So there's all sorts of uses of data. We don't sell our data. But of course, one of the kind of taglines I've heard for I guess a long time now is that data is the currency of the millennium, right? So being able to use the data in various different ways, including for us, partnerships with Pharma and other kind of collaborations downstream is very critical for us.
Alan
Switching gears again, working with the brokerage community like you are. And the large number of the bigger, self funded cases renew on one one of each year. January 1. So. What are you doing now to prepare for the 1124 renewals?
Shelley
Mainly what we're doing is on the kind of the sales and education piece both with our broker consultant partners as well as with employers and then getting the word out to existing, I guess all the way down to the member level to make sure that individuals are aware of our solution so that they'll know how to access it after the first of the year, kind of more globally. Some of the other things we're doing, I guess, is more just building brand awareness related to Famlee in general. We are excited to be part of the Employer Health Innovation Roundtable Academy, so that brings us heightened visibility with some of the nation's largest employers. I'm presenting at the Coalition of Healthcare Purchasers in Nashville in June. And again, all of those things are really just to build brand awareness about the innovative and affordable solutions that we offer here at Famlee.
Alan
So we've talked about it a little bit in this earlier in the podcast, but what are your biggest challenges you're facing now?
Shelley
Honestly, I would say it really is that education piece when you're doing something new. How do you let partners like brokers and consultants know that a we're very willing and able to work with existing companies in the market, in the fertility space, really as integrating us as a step therapy requirement unless someone had a known chromosomal or structural abnormality. So really kind of reinforcing the message that we play nicely with others, but then also just continuing to hone in on our message, which is that we are a conservative care step therapy treatment solution and really trying to help the broader audience learn that there are effective and affordable fertility treatment solutions out there that don't just jump directly to IVF. Because, again, we just hear time and time again that employers are just some are again, the small to midsized ones are just really scared to even have the discussion about fertility. So it's just more webinar, it's more podcasts like this. And just to really get the message out there to employers and to their brokers and consultants that they rely on so heavily that there are affordable fertility treatment solutions available.
Alan
I believe your website address is f a m l e e dot com.
Shelley
Dollars. Correct. So it's an alternative spelling to the traditional F-A-M-I-L-Y that we're all used to. And again, that's f a m l e e dot com.
Alan
Okay, great. So one last question. Shelley, are there any lessons to share with other entrepreneurs who encounter problems in the healthcare system and have a passion to overcome them?
Shelley
Yeah, one of my first. Clearly, to have success, I think at most anything in life, individuals need to have a whole lot of grit. So I would certainly say that your passion has to run so deep into your core that you just never give up. Right. But I guess a more kind of tangible suggestion would be to, early on in your journey or as early as possible, join ecosystems of other entrepreneurs, ideally, probably other entrepreneurs in the healthcare space or whatever vertical you're working on so that you can really help each other learn and grow as quickly as possible. I don't think, I know, that I made that mistake with this endeavor here at Famlee because I had a previous exit. I kind of locked myself in my office and just started to build out the solution that I thought is what everyone wanted. And what I found is that I wasted a lot of money early on where if I had been more regularly communicating with other entrepreneurs and specifically other entrepreneurs in health care, I would have been able to learn from their mistakes as well, to find the right business partners earlier. Right.
They always say to fail early and fail often. And I think if I had been more involved in those types of ecosystems earlier, we certainly would have met the different vendor partners that we're now working with, ideally much earlier in our journey, which would have saved us a lot of money. Would have helped us just learn best practices quickly, as opposed to having to learn them by a trying to build them ourselves and then learning that those that what we built didn't work. So fail early, fail often, but then talk to others in your vertical often so that you can find solution partners to get you where you want to go.
Alan
Well, it sounds like you're on the road to success. And I've known you for a while and I know that you're fully committed to this and your heart and soul is into it. And I have every belief that you're going to have a great success and you're going to be able to educate those brokers and they're going to be able to educate the end user and Famlee is going to be a great solution, I think, for years to come.
Shelley
Well, thank you. It's our goal that we're really kind of democratizing access to fertility care and treatment for everyone and that we get to a point where when people are having fertility challenges, that they all think of Famlee first before they think of any other intervention that might be available.
Alan
Well, thank you so much for spending a few minutes with us today and I wish nothing but the best to you and the family.
Shelley
Oh, I appreciate your kind words and thanks for taking the time to chat today.
Narrator
Thanks for listening to this week's episode of Insurance Innovation, brought to you by e123. We hope you enjoyed the show. Please provide feedback and let us know topics that would inspire you on the website at e123insurtech.com, home of the premier life and health insurance distribution management system.
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