Innovative products help health care firm EmployerDirect grow quickly, hire more staff

Sep 23, 2014
Austin Business Journal

EmployerDirect, an Austin-based health care management company that serves employer-funded health plans, expects to grow its coverage base to more than 1.5 million people by 2015 with the introduction of products like its new SurgeryPlus benefit

SurgeryPlus is an arrangement that creates bundled pre-negotiated rates for surgical procedures and some minor outpatient procedures, which the company says can result in a cost reduction of as much as 30 percent to 50 percent. Tom Johnston, EmployerDirect CEO, said the product is attractive for employers because the lower surgery costs reduce overall health care costs by at least six percent, and physicians and surgery centers who enroll as providers get to tap into a new channel of business through EmployerDirect’s referrals

“We’re a narrow network because we only look for the highest quality providers and don’t want to have so many that we’re saturated in the area,” Johnston said. “This is a new model that you don’t see much of yet.”

Johnston said EmployerDirect’s member companies typically have at least 2,000 employees and its largest have more than 20,000. No Austin-based companies have signed up but he said some employees of member companies live in the area

Johnston wouldn’t disclose EmployerDirect’s revenue but said it expects to triple last year's numbers in 2014 and is on pace to do so again by 2015, when it is expects to have doubled its current payroll of 50 to 100. That revenue growth is coming mainly from new business generated from enrolling new members as the health care landscape continues to change in the wake of the Affordable Care Act. Industry estimates show there are 150 million people who will soon be covered by an employer-funded health care plan, which creates a huge opportunity for companies like EmployerDirect

“We typically go directly to the companies themselves and reach out to the HR people to show them the cost savings we can bring,” he said. “That 150 million number isn’t growing fast, but it’s so large that even getting to 1 percent of that is a lot of business.”

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