Those Damn Fees

On the face of it, GoodRx and fintech company Dave wouldn't seem to have anything to do with each other. 

To be honest, I had never heard of Dave until yesterday, when I read that Dave was now valued at $1b, just two years after launching its financial management product.  They now claim 4 million customers, with another 800,000 on its waiting list. 

Dave's raison d'être is helping users avoid overdraft fees.  It uses AI to monitor your spending habits, warn you when you might be nearing an overdraft situation, and even advances you up to $100 to avoid the overdraft, with no interest.  It can either be linked to an existing bank account, or through a Dave checking account.  It even plants a tree every time you "tip" their service. 

Overdraft fees average around $35 per occurrence, but add up to over $34b annually, so the problem Dave is addressing is not a trivial one.  Still, I wonder: if Dave is valued at $1b, what would a service in healthcare like that -- say, for surprise bills -- be worth? 

Which brings me to GoodRx.

As many people know, GoodRx's mission has been to help people find more affordable prescription drug prices.  If you have a prescription, you can use their website or their app to find prices at nearby pharmacies, and often to use a coupon as well to further reduce your cost.  The company claims that since their inception in 2011, their customers have saved over $14b, $5b in 2019 alone. 

The range of drug prices GoodRx exposes is astonishing, as is their ability to track and display them, much less to target coupons.  The prescription drug industry has been technologically ahead of the rest of the healthcare industry as long as I can recall; for example, it was doing electronic claim submission in the 1970's.  It shouldn't be too surprising that a prescription-focused service like GoodRx is effectively doing what transparency companies like Castlight or Healthcare Bluebook have been trying to do for the rest of healthcare. 

GoodRx is now stepping outside its legacy space with its launch of GoodRx Care, a telehealth service powered by its purchase of HeyDoctor.  Online consultations start at $20 and can be used for women's and men's health, preventive care, and chronic care, and the online consultation can lead to prescriptions not just for drugs but also lab tests.  Their pricing, of course, is transparent. 

GoodRx co-CEO/co-founder Doug Hirsch explained: "In an increasingly fragmented and confusing healthcare system, our goal is to provide a one-stop shop for services that address most basic healthcare needs."  He further told CNBC: "We’re a marketplace in prescriptions, and with GoodRx Care, we’re a marketplace for both prices for medical care and we’re even offering medical care."

There are plenty of telehealth companies, and a fair number of transparency companies, but no one that I know of is doing in medical what GoodRx has done with prescription prices -- truly exposing costs, steering patients to least expensive options, and helping further reduce those costs, especially for those without insurance. 

The Administration has been advocating more healthcare transparency, but its latest effort to have hospitals disclose negotiated rates is not being met with open arms.  Similarly, despite widespread support to stop so-called surprise bills, the prognosis for federal legislation to address them is turning grimmer. 

We need Dave.  Or, rather, we need a Dave.

We need a service that people can use as they are getting or about to get healthcare services.  "Hey, Kim," it might say.  "You're going to see Dr. X about condition A.  You should expect it to cost $Z, and expect him/her to order A, B, and C, which would cost $Y.  You can get the best prices at ____.  And, oh, by the way, you'll still be in your deductible."

It might even suggest seeing Dr. X1 instead, who not only has better outcomes but also results in lower costs.  

If you still ended up with a surprise bill after all that, it might help you negotiate the bill to a more reasonable amount, and perhaps help you finance it.   

This service seems like a lot to ask for, but I don't really understand how GoodRx manages to stay on top of all the prescription pricing either, or how Dave manages to offer no interest financing for overdrafts either.  They each have different business models than others in healthcare and banking, respectively, but both models happen to be ones that help people be less surprised by unexpected costs.  

Those seem like business models healthcare should be embracing. 

Maybe Dave or one of its fintech rivals will focus on managing healthcare expenses as a niche.  Perhaps GoodRx's new foray into medical care services will broaden its appetite to expose prices and help consumers manage them.  Or, as many expect, Amazon -- which just launched its own virtual care clinic -- might finally bring its marketplace platform to bear on pricing healthcare.  

We don't yet know who it will be, butut it will be someone.
  
Earlier this year Jason Wilk, Dave's co-founder and CEO, said:  

Banks have failed their customers by building products that put their own interests ahead of the humans who use them. People don’t need predatory fees, they need tools that actually solve their challenges around credit building, finding work and getting access to their own money to cover immediate expenses. Dave is the banking product that works with its customers, not against them

Now substitute "banks" and "banking" with "healthcare," and you'd have a pretty good mission statement for a new healthcare company.  The question is, who will it be, when? 

Dave may kill, or at least hurt, traditional banks because people are upset about overdraft fees.  Netflix killed Blockbuster in part because people got annoyed with late fees.  Healthcare has plenty of fees that seem even more perverse -- and much larger -- than either of those (think facility fees or balance/surprise bills), making it even more ripe for similar disruption. 

The $1b valuation for Dave would be small change for the company that can do something about helping consumers with those unexpected costs.