NOTE: The abstract below is a shortened version of the Health Plan Weekly article “With IPO Talk, Telehealth Buy, Startup’s Future May Be Bright.”

By Leslie Small

After 2020 proved to be a banner year for initial public offerings, three separate startup health insurers — Alignment Healthcare, Clover Health and Oscar Health — rode the wave and launched IPOs in the early months of 2021. Now, Bright Health Inc. is reportedly poised to become the fourth insurer to do so, and in the meantime has picked up a telehealth asset for good measure.

Industry experts tell AIS Health that while many aspects of Bright Health’s business will become clearer if it does end up trading publicly, the company so far looks more likely than some of its fellow startups to succeed.

“It’s being run by people who understand health insurance, which differentiates it a little bit from some of the other high-profile startups that have really struggled — where they seem to revel in the fact that they have no industry experience,” says Ari Gottlieb, the principal of A2 Strategy Group, who has been a vocal critic of Oscar’s business model.

On April 1, Bloomberg reported that Bright Health was planning to launch an IPO this year, citing people with knowledge of the matter. The company could be valued “well above” $10 billion. Just four days later on April 5, the health care investment bank Cain Brothers said that Bright Health acquired Minneapolis-based Zipnosis, Inc., a “best-in-class virtual care platform powering next-generation telehealth strategies for leading health systems.”

Gottlieb says that the Zipnosis deal is likely motivated by the fact that the pandemic has given telehealth its moment in the sun. “You saw Oscar did the same thing, where they tended to follow trends and fads,” he adds.

Katherine Hempstead, a senior adviser to the executive vice president at the Robert Wood Johnson Foundation, says she sees the logic in Affordable Care Act exchange-focused insurers that aim to become a bigger part of customers’ lives than commercial health plans have historically.

“I feel like that’s an opportunity you have in the individual market because the customer is choosing you, the insurer, so you can establish that kind of relationship, whereas in the employer world, mostly you don’t have a choice — this is the plan that your employer has, this is your insurer,” she says.