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Why we invested: Centivo

December 10, 2020

It’s no secret that healthcare costs in the US are out of control. Medical-related costs outpaced GDP growth by almost 9% from 2008 to 2018 and are expected to represent almost 20% of GDP by 2027. Today, 160 million Americans receive health benefits through work and employee healthcare costs are becoming unbearable for many employers, which could affect the type and quality of insurance that employers can afford to offer. Costs are so detrimental to our society that Warren Buffett has called them “the tapeworm of American economic competitiveness,” and there is plenty of evidence to support this — the per capita cost of healthcare increased by 31x between 1970 and 2018.

The growth of high-deductible health plans (deductibles above $1,400 for individuals and $2,800 for families) has skyrocketed over the last ten years, a time when approximately 60% of Americans don’t have $500 in savings to be able to cover deductibles of this size, making these plans ineffective at best and unusable at worst.


Note: Small Firms have 3–199 workers and Large Firms have 200 or more workers;

Historically, many major shifts in healthcare have coincided with major global or economic events that have created a financial imperative for change:


The current global pandemic and resulting economic crisis fits this trend almost exactly. With a slowdown in the economy comes an increase in unemployment and, consequently, people losing their employer-based health insurance. The latest data from the Bureau of Labor Statistics shows a 6.7% unemployment rate in November, down from a high of almost 15% in April, but the long-term unemployment rate is rapidly nearing its peak seen during the 2008–2009 recession. The US GDP is also down 1.3% from 2019, meaning health insurance will place an even greater financial strain on struggling employers and employees alike. In a system already characterized by high costs, poor outcomes, and misaligned incentives, the impact of a rise in uninsured people can be catastrophic. The problems and inefficiencies plaguing the system grow worse, causing the already untenable cost of healthcare for Americans to skyrocket.

As unsustainable costs for both providers and consumers have collided with a global pandemic and economic crisis, we at B Capital Group believe we have reached an important moment when the timing is right for a major shift in the way health benefits are delivered and consumed. This is why we’re proud to announce our investment in Centivo, a healthcare benefits provider that serves self-funded employers, solving the cost problem for employers and employees. When a company works with Centivo, employer contributions for health costs go down while employees are provided with health plans that feature lower paycheck contributions, $0 deductibles, and low, simple copays that offer transparency on how much physician visits will cost.

Centivo’s advantage starts with a strong network of high-quality and high-performing providers that ensure patients receive world-class care. Centivo engages patients via an easy-to-use portal where they can select a primary care physician that meets their needs and preferences, track and manage referrals, view their medical history, and more. In-network providers are given the tools to help close care gaps and direct patients to the most appropriate specialists and facilities. This unique, primary care-centric model allows PCPs to earn more money for delivering better care, closing the loop and aligning the incentives between all stakeholders. While there are companies in the digital health ecosystem tackling many of these issues, what makes Centivo so powerful is that the comprehensive solution for physicians to provide better care is delivered on a single platform, facilitated by the payer so that right actions are rewarded financially.

The results have been impressive. From an outcomes perspective, Centivo’s clients see higher rates of care coordination, more primary care visits, and more preventative care visits while hospital admissions and ER visits decline. Financially, employers are seeing double-digit reductions in health benefits costs without shifting the cost burden to their employees.

Centivo has been able to achieve these impressive results in the mere two years since product launch. Founder and CEO Ashok Subramanian has built a leadership team that brings a wealth of knowledge and expertise across health benefits, value-based care delivery, and product, serving both patients and providers. Prior to Centivo, Ashok founded Liazon, a private healthcare benefits exchange, which sold to Towers Watson, and several senior members of the original Liazon team joined Ashok at Centivo to redefine the way health benefits are delivered.

Centivo’s product and the successful alignment of stakeholder incentives are critical to support the shift away from a fee-for-service model to a value-based care approach in healthcare. We believe the company’s model to be representative of the broader future of healthcare in the United States, not just the self-funded employers they serve today. No other solution is better positioned to offer extremely high-quality benefits at affordable rates in a sustainable way, reducing overall costs and driving better outcomes for patients.

The B Capital team is thrilled to work with Ashok and the Centivo team to realign and positively transform healthcare.

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