Indianapolis-based My Health Care Manager LLC has just landed $3 million in venture capital, with $1 million of the infusion
coming from locally based Clarian Health Ventures.
My Health Care Manager, which guides working adults and their parents through the maze of decisions and agencies involved in care for seniors, plans to use the money primarily to augment its sales staff and operations.
The company aims to capitalize on two major macroeconomic trends: the aging of the baby boomer population, which will increase its pool of potential customers; and federal health care reform, which could create opportunity as hospitals and insurers seek methods to cut costs.
“All the debate that’s going on in Washington is still redividing the way the dollar is spent among providers and payers,” said My Health Care Manager founder and Chairman Alan Stanford, 68. “The next wave is keeping [seniors] out of the health care system and making sure seniors are in better compliance with doctors’ orders.”
Founded in 2006, My Health Care Manager has 22 employees plus five contractors. Since inception, it had raised $2 million from local angel investors. It also had attracted a $1.9 million grant from the Indiana 21st Century Research and Technology Fund.
The new funding is the first time the company has landed venture capital. Stafford said $2 million of the infusion is coming from a strategic investor, which he declined to identify.
My Health Care Manager isn’t profitable yet but has tremendous potential, said Matt Neff, CEO of Clarian Health Ventures, which is owned by the Clarian Health hospital system.
“We understand it’s going to be a while before the company turns the corner,” he said. “That’s not uncommon for early-stage companies. You’re betting on their ability to quickly scale the business.”
In its earliest days, My Health Care Manager focused on signing up customers one by one. But more recently, it has had success offering the service through employers as a component of their health care plan.
It struck a breakthrough deal in August, when WellPoint Inc. agreed to begin touting My Health Care Manager’s services to employers throughout its network.
In early October, the startup hired former WellPoint executive Jane Niederberger, 49, as CEO, succeeding Stanford. He remains chairman.
My Health Care Manager has been offering its service to employers for 40 cents to $1.50 per month for each health plan member. Employers who buy the service through WellPoint will pay similar rates, with WellPoint getting a small cut of the revenue.
This is a critical stage in the development of My Health Care Manager, said Mark Long, president of Greenwood-based Long Performance Advisors Inc. and the former chief of Indiana University’s business-incubation program.
The key to success, Long said, will be convincing more organizations that My Health Care Manager can truly make a dent in health care costs.
“If people perceive it as something that will both save money and give better care, that’s the tipping point for them,” Long said.
If My Health Care Manager’s growth matches its potential, it won’t be long before it needs to approach investors again.
“Three million dollars isn’t what it used to be,” he said. “They’ll swallow that up pretty quick, especially in this market. They have to make hay while the sun shines with it.”•