Hello, everyone. This is Jacob Emerson with the
Becker's Payer Issues podcast.
Thrilled today to be joined by Jeff Yuan,
who is the cofounder of Mending. Jeff, thanks
so much for taking the time to be
with me on the podcast today. Jacob, great
to be here. Big fan of the podcast.
Thanks for having me. Thanks a lot, Jeff.
Appreciate you taking the time to be here
with me. So, Jeff, before we dive into
everything we wanna talk with you about, can
you tell us a little bit more about
yourself, your background in health care, or career
in general, and then what it is you're
doing today at Mending.
Yeah. Absolutely.
So I've been in health care for the
last twenty years, my career.
Early days, I was actually more in academia.
So I started off my career doing a
lot of laboratory research, translational research, specifically in
the IBD and Crohn's space.
Like a lot of folks just trying to
figure out kind of my career, I think
early days I also made a pretty hard
pivot and left academia,
enjoyed a consulting firm called the Advisory Board
Company,
which I credit to really be
my education introduction to US Healthcare Economics. So
a lot of my clients were large payers
in hospital systems. We worked on the physician
enterprise and really under stood that relationship,
and then really, frankly, fell in love with
startups, specifically health technology startups.
I had a great stint at Zocdoc
helping it run its enterprise business,
doing a lot of patient access work and
with hospital systems and online physician scheduling.
And then, joined another startup called Charles Park
now today called Formation Bio,
who's a full stack pharma company. And that's
actually where I met my cofounder Frank. He
was the first employee, first engineer.
And,
together we ended up leaving and starting Mending,
just a few years ago. So
for those of you,
who don't know, Mending, we were formerly called
Terra Health. We are an AI native health
insurance company.
So today we have three customers.
We sell our health insurance products directly on
the ACA marketplace, so on and off exchange
products on healthcare.gov.
We work with a lot of small groups,
small businesses who can buy fully insured products,
and we also sell in the ICRA space
for those employers who
give money to their employers to buy their
own health insurance. A lot of employees will
pick us directly.
And so one of our core beliefs as
a health insurance company is that payers should
actually build technology to help providers' lives. And
so
a lot of how we got our start
is figuring out how can we make the
piping between payers and providers much more smoothly,
try to get more providers outside of the
business of practicing insurance and more into the
business of practicing medicine.
Fantastic. So really interesting background, and I appreciate
that overview of of the rebrand from Tero
Health to Mending.
I I honestly think we could do an
entire podcast just talking about ICRA alone. But
Yeah.
You know, before before we do dive into,
Mending specifically and and what you all do,
talk to us about the rebrand. You you
announced that very recently.
What is why? What what's behind this? What
does this shift represent in terms of the
company's evolving identity and and and strategy?
Yeah. Absolutely. So we were TerraHealth for four
years. We've recently rebranded to Mending as you
pointed out.
And,
you know,
transparently,
we always felt like a rebrand was something
that would happen later down in the future.
The early,
the early story of how we got to
TeroHealth is not glorious like a lot of
early startups. It it was me and Frank,
just the two of us in a room
sitting on his couch saying, oh, at some
point we need to name this company.
And literally we're finding, you know, cheap domain
names,
things that can just get us started. We
always knew branding as a, you know, mattered
as a company, but it was good enough
to get started. And we really liked the
name. It it kind of spoke to us
in terms of Taro being a root vegetable
and trying to get in fixing kind of
the root of health care.
You know, as we've evolved in the last
couple years now that we're in market, we've
been growing really quickly. We work with lots
of different doctors and patients in the market.
We felt like Mending more uniquely captured our
mission and our momentum. And as I stated
earlier,
mission and our momentum. And as I stated
earlier,
a lot of how we got started is
we feel like there's this health care system
we that, you know, all of us depend
on. We love it. There's ways to improve
it and mend it. Mend the doctor patient
relationship. Mend,
you know, how really US health care works.
And,
we just, again, felt like it was thematically
great. And before we get bigger, it's easier
to rip the Band Aid off earlier. And
so we did the rebrand just a few
weeks ago.
Got it. Got it. Very cool. And and
it sounds like so this is something that
was always,
in your heads. You you you fully expected
to have a rebrand come down the line.
And it makes sense, the the mending word.
That's that's that's a that's a great word
to use, for what you all do. You
know, the company is positioning itself as the
first AI native health insurer, which, you know,
that's a really interesting,
way to phrase things, I think. And especially
because we've heard so much, especially the last
few years, in the headlines,
usually negative, Jeff,
about, you know, insurers' use of AI.
So
what's what's your perspective on on or Mending's
position on this in terms of how you're
using this technology to meaningfully reduce
administrative burdens for the providers that you contract
with, and then ultimately, of course, improve the
outcomes,
for your members in comparison to a more
traditional insurer?
Absolutely. I love this question because
I think, Jacob, to your point, there is,
you know, AI is omnipresent in all of
our lives, and there's a lot of news
happening quickly.
And a lot of what you hear is
provider organizations hiring,
AI agents to go bill better and and
help their rev cycle. And then what happens?
Well, the payer organizations buy their own AI
to potentially put up more walls or deny
claims or make it even higher harder with
prior authorization.
And that's kind of the most more negative
version of things. The way we think about
it, you know, just stepping back for a
second,
we think there's no better time to be
building a health insurance company than in 2025.
Obviously, there's been a long history of Upstart
payers who, to your point, has been largely
a very challenging experience.
But if you look under the hood of
what health insurance truly is, it's
people,
it's processes, it's payments, it's a set of
rules, it's data shifting around, it's a financial
services company,
And all of those things combined, we think,
are uniquely great
for AI today in a first principles way.
And we just know the AI is gonna
be a 100 x better in 2030. So
how can we infuse AI truly from the
start
of everything we think about in terms of
our operational processes and the way we think
about delivering care.
And so, you know, Mending's version, we we
this is how it kind of manifests today
for us. One, like I said earlier, we
got our start and a deep part of
our company DNA
is that the philosophical belief is that preparer
should be building technology to make providers' lives
easier. So for a lot of the doctors
that we work with, primary care doctors, some
direct primary care doctors,
From day one, we have a very unique
relationship with them where we're embedded with them
using AI and technology.
For a lot of the doctors,
they don't have to have staff or RCM
processes to work with us. There's auto benefits
and verification.
We integrate directly their EHR so that we
understand when our members are actually inter getting
care from these doctors. They don't file any
claims with us at all,
and there's no denial of payments as we
look at some of that clinical evidence. So,
you know, again, going back to how AI
is being positioned of two agents
fighting with each other in a very calcified
pipeline,
we think there's ways to
really, really reduce the friction between payers and
providers and how payers like us can be
a very provider friendly organization
that ultimately translates to better patient care and
and better patient experiences.
The other thing, as I mentioned, is we
think insurance companies doesn't need to be an
army of people to run those processes.
A lot of historical and large insurance companies
had to build up decades of processes and
people and admin to run their SG and
A to run their operations.
And I think one of the advantages in
2025
is you you don't have to scale on
people that quickly. You can actually, from day
one, embed automation, customer support, network contracting, even
the broker appointment process. All of these things
don't need a ton of humans,
and we think that savings on operations can
ultimately translate to a lot of value and
savings when we think about premium prices and
the way we, and the the overall cost
of the health care system.
Interesting. And and that's such a fascinating little
tidbit you just ended with there with Jeff
of the some of the more legacy players,
the big ones we see today needing to
really build up their staffs,
because that's what you needed to run an
insurance company, let's say, twenty, thirty, forty years
ago. And that's really not necessarily the case
anymore as technology has evolved. That's that's really
fascinating you said that. And I think what's
also really interesting is hearing you say that
your providers don't don't need an RCM staff
or or staff at all necessarily to work
directly with you. I think any of providers
listening in, that's quite the enticing
message given, some of their relationships, I think,
probably with other insurers and the staff that
they do have to hire to work with
them.
Let let's talk about a little bit, you
know, you're you have exclusive partnerships with direct
primary care practices,
And and that does stand out, or at
least that's that stood out to me because
when we hear about this kind of model,
usually, direct primary care operates outside of of
the insurance plan.
So,
you know, from your experience,
the the least last few years, first with
Taro, now with Mending, how do you think
this model has has impacted cost for your
members? How has it impacted,
the the utilization trends you're seeing internally?
And then what are you hearing on the
ground and from providers in terms of,
is this actually making a dent? Is this
making a difference in how they feel in
terms of interacting with the health plan?
Yeah. Absolutely. So, for those of you who
maybe are less familiar with direct primary care
or DPC,
these are a lot of, you know, typically
independent physicians in the community who have started
their own practices
who effectively their entire revenue model is cash
only outside of insurance to your point. Right?
These are physicians who have kind of walked
the walk in terms of leaving the system
and part of, you know, not this is
not the whole reason, but part of this
is is precisely because they were in the
business of practicing insurance, not medicine. And they
hated the fact that they had to buy
all these systems and hire all these people
just to deal with how do we get
paid by insurance companies.
The irony is that to your point direct
primary care is a really unique feature for
us.
As you can imagine if you approach these
DPCs
as an insurance company and say hey let's
partner to a bunch of doctors who have
literally left that system it's an awkward conversation.
But from a mission perspective you know they're
really aligned on figuring out how can we
mend this healthcare system and
the technology and AI product for them has
to be a really high bar for them
to say yes I'm actually going to become
in network with Mending,
I'm gonna accept these insurance insured members
and my
kind of my my day to day, the
way I practice clinically is not going to
change drastically
and this has impacted
cost utilization, member satisfaction in a huge way.
One, for most of these direct primary care
doctors, they're only in network with us
and so they have way more time to
be spending with their patients. A lot of
the annual physicals are forty five minutes to
an hour long.
You know, patients can go on telemedicine,
they can emails. A lot of doctor a
lot of patients, excuse me, will actually text
their doctors directly and so there's constant interaction
between the two. The insurance company, us, we're
not the middleman between the doctor and the
patient and that's what they love about the
model as well. We have
seen early days in our markets of Maine
and Oklahoma
on a normalized basis per 1,000 members specific
to the demographics and market, a 70% decrease
in specialist utilization,
a 50% decrease in urgent care,
35% decrease in ER.
And we think it's because these doctors are
actually making themselves way more accessible to our
members, managing that care effectively.
And because of all these interactions,
the doc the patients feel
really satisfied. We have a ninety seven percent
renewal rate for our members year over year,
for for those who are attributed to one
of these direct primary care practices. So again,
we're looking for those win win win scenarios
and going back to that core belief, if
we can free the doctors from this administrative
burden and focus on the doctor patient relationship,
we think it's gonna be better for us
in the overall system. Sure. Absolutely. No. It's
an amazing renewal rate you just you just
mentioned. But I also imagine, you know, from
the physician's
perspective, this is an amazing model because, you
know, it's obviously not a very easy time
to be an independent physician right now. And
this just gives you it sounds like a
broader,
patient's
base to access even from from their side
of things. So it's really interesting.
And you mentioned Maine and Oklahoma. I know
that's the states you first got started in.
Can you educate me, our audience,
where do things stand today? Where are you
looking for the future?
Are you are you looking to expand into
new markets? And, you know,
what what have you learned from your initial
growth in those two states?
Yeah. Absolutely. So we started in Maine and
Oklahoma really as a testing bed and to
understand different populations within The US. Between those
two states, you have urban settings, suburban settings,
certainly rural settings
where patient access is really challenging,
access to primary care is really challenging. So
we we felt like they were great environments
for us to learn in. We will be
expanding into Georgia this fall, which we're really
excited about.
And I think for us,
you know, working in the fully insured commercial
space on the exchange, it's a
dynamic environment.
You know, you have to look at the
hospital landscape, you have to look at the
other competitor payer landscape, the regulatory landscape,
how many hospitals and direct primary care doctors
are there available. And so,
we've learned a lot over the last couple
years of scaling
but I think the common theme for us
is
as an upstart insurer,
understanding the history of other insurers who've tried
to compete against the large legacy players
you know when they zig you have to
zag a little bit and you have to
truly truly find ways to differentiate.
The network size is one, premium price is
another, but you you have to really
you can't use those old playbooks of let's
just cut premium prices, grow really fast and
big, lose a lot of money, and try
to come back and fix our economics.
And so for us, learnings is, you know,
making sure that we scale responsibly,
do it in a way that's sound unit
economically,
and then,
you know, kinda go from there.
Got it. Cool. So so you're expanding into
Georgia this fall.
How do you how do you think that
could influence or how do you think other
insurers,
what do you think they could learn from
from your scaling?
And is there any advice that you would
offer,
those individuals listening in right now in terms
of what you've learned up up till this
point?
Yeah. I guess,
guess it depends on who's listening and if
you're certain that sit sitting on the
legacy insurer side versus the kind of you're
with us in terms of being a a
startup player here. Yeah. Yeah.
But I I I I go back to
that
differentiation,
where I would also encourage even the legacy
players to rethink
how they think about their provider network. And
it's not just direct primary care, it's finding
different ways to truly create personalized and differentiated
products that the market demands.
You know, even with ICRA now, you're seeing
more and more employers,
give that money to their employees and those
employees are looking for
very personalized plans that speak to them. But
the, you know, the the the way provider
networks have been built over the last couple
of decades of fee for service contracting and
just continuing to kind of build those reimbursement
rates,
we feel like
there's gonna be room prop there's opportunity set,
to really figure out how do you differentiate
truly on network? How do you use AI
to be able to augment your,
your care navigation?
What are some of these tools that are
now available that weren't available even five years
ago and and to kinda double down, triple
down in those areas?
Yeah. No. It's good advice. And I wonder
anything else you wanna mention today?
You obviously we've got a lot of health
plan leaders listening in, I think, from both
sides of the aisle in terms of nonconventional
and some of the legacy players.
Any final thoughts you wanna share?
Yeah. I think, you know, especially at the
time of this recording,
there's a lot happening in health care and
Yeah. You had mentioned too a lot of
negativity and understandably
so.
I think no one can truly truly predict
the outcome of the one big beautiful bill.
Everyone is navigating the landscape.
My overall advice to folks and we say
this constantly to the internal team is amidst
all this uncertainty,
the challenges,
even the chaos,
like find the opportunities.
There actually is a a a set of
positive opportunities.
It's gonna be tough. I'm not saying it
won't.
But, you know, in in uncertain times, there's
also at the same time a way to
radically change how we think about delivering health
care, how we think about building some of
these systems.
And I'm personally very excited and optimistic even
amidst everything. I think it's time to get
creative and
these these times of uncertainty,
create these windows where,
we we feel like we can offer truly
novel products and see if we can break
the paradigm of how an upstart insurer could
succeed, in this space.
Awesome. Well, I feel it's a great place
to leave things, Jeff. So I wanna thank
you for taking the time to sit down
with us and for sharing your insights and
and future growth plans at Mending with our
audience. We really appreciate it. Thanks so much
for having me. And to our audience, if
you'd like to listen to more podcasts from
Becker's Healthcare, you can visit beckershospitalreview.com.