Glen Tullman, cofounder of Livongo, has launched a new startup called Transcarent that aims to use AI to help people navigate and pay for healthcare services. Tullman believes that the future of telehealth is text-based, not video-based, and he predicts that the majority of telehealth interactions will eventually be written. Transcarent recently announced a $126 million Series D funding round at a $2.2 billion valuation and plans to offer an AI chatbot to help answer health insurance-related questions for Americans struggling with the complexities of the healthcare system.
Transcarent offers an app with 24/7 chat-based primary care services, lower cost drug options, referrals, and second opinions. The company has raised $450 million since its founding in 2020 and works directly with health systems to get better rates for major health events like surgeries and cancer care. While the healthcare navigation market is estimated to be worth $10 billion, experts caution that these services may only provide a temporary solution to the underlying issues of the U.S. healthcare system’s complexity and patient information disadvantage.
Tullman sees the potential for his AI tool to significantly reduce costs in healthcare navigation services, which currently depend heavily on human call centers with high labor costs. The AI chatbot, built on OpenAI’s GPT-4 large language model, is intended to cut costs in half and offer more efficient and personalized service to users. Transcarent plans to offer the tool to its customers, primarily self-funded employers, in January 2025. Tullman is positioning Transcarent to compete in the growing market of employer-sponsored healthcare navigation solutions, targeting employers who are facing rising healthcare costs and looking for ways to lower spending.
The AI tool is designed to assist users with medical questions and emergencies, and it has been tested to determine when human intervention is necessary. While the AI chatbot can successfully answer simple health insurance questions, it may struggle with more complex inquiries. Despite potential technical challenges, Tullman believes that the high cost of building a similar AI tool will deter competitors. The key challenge for Transcarent will be ensuring user adoption and engagement, as uptake of healthcare navigation services can vary significantly depending on the company and individual needs.
Some companies, like Pilot Flying J, have seen success with implementing Transcarent’s services, with a significant portion of eligible employees and dependents downloading the app and actively using it. Tullman aims to create a seamless healthcare experience for patients, similar to his approach with Livongo, by acquiring companies and assembling the necessary components to simplify healthcare management. He envisions Transcarent as a one-stop shop for all healthcare needs, creating an Amazon-like experience for patients. As the healthcare navigation market continues to grow, Tullman is focusing on making healthcare more accessible and affordable for all.
