Oral health coverage is mostly left out of the broader health care debate. A budding dental insurance company called Beam wants to fill this gap by following a model that aims to use technology to improve health and reduce medical costs.
“The entire dental services industry would operate tens of percent more efficiently if there was one entity that made better use of data and technology,” said Alex Frommeyer, CEO and co-founder of Beam.
The Columbus, Ohio-based company, which has just 20 employees and does most of its business in three Midwestern states, said Tuesday it was expanding to small and large employers nationwide.
Beam’s growth is largely driven by the Affordable Care Act, which has indirectly created an incubator of healthcare startups that aim to improve the system, reduce costs and potentially make money in the process of road. Manhattan-based Oscar Insurance Corp. has been the poster child of relatively unknown healthcare startups turning into investor darlings.
Oscar bases its health insurance business on consumer convenience and technology-enabled services, such as 24/7 video chats with doctors. The ultimate goal is to reduce medical costs by eliminating unnecessary visits to hospitals and doctor’s offices. This is what Beam hopes to emulate. “We’re big fans of what they did,” Frommeyer said of Oscar. “Our brands are very similar in spirit.”
But while Oscar has captured the attention of millennials and investor dollars, its results have so far suffered. Oscar is hemorrhaging $27.5 million last year and only has 40,000 members, but it’s somehow valued at nearly $1.5 billion.
Venture capital firm Drive Capital invested $5 million in Beam last year. Beam’s calling card is its smart toothbrush, which has Food and Drug Administration approval and is part of his dental plans. People use the electric toothbrush in conjunction with the Beam app to monitor their brushing habits and stats. Beam’s app also works to schedule dental appointments and find participating providers. Beam uses Renaissance Dental’s nationwide network of dentists.
Frommeyer said the company’s policy costs about $30 a month for the average person in Ohio, and it follows a 100-80-50 model. Beam covers 100% of preventive services such as cleanings and X-rays, 80% of basic services such as cavity fillings and 50% of major procedures such as root canals. It’s a common model for dental insurers, but it potentially exposes patients to hefty bills for major procedures.
Beam’s plan includes an added benefit: toothpaste, floss and replacement brush heads for the smart toothbrush are shipped to members every three months. Beam essentially eliminates the need for consumers to purchase oral care products from big box retailers, and they also adapt to the needs of each recipient. For example, someone with sensitive teeth might be given a specific toothpaste for that condition, all of which can be topped up via the app.
Frommeyer said Beam’s amenities are aimed at today’s consumers. But more importantly, they encourage preventative care and the management of small health issues before they become big ones – the mantra repeated over and over by other insurers and healthcare providers. “A lot of people who don’t have access to an affordable dentist, guess what happens when their tooth decay becomes unbearably painful? They go to the emergency room,” he said.
Frommeyer knows Beam’s future success is far from a slam dunk. He did not disclose company earnings or current members. Beam hopes to have 25,000 members by the time the schedule changes in 2016.
“I hope Beam draws attention primarily to dental insurance,” Frommeyer said. “The Affordable Care Act has left many opportunities on the table to address serious oral health issues.”
Yet dental insurance has not received the same attention as general medical insurance. Between 108 million and 127 million Americans do not have dental coverage, according to various industry estimates. Democratic presidential hopeful and Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.) have attempted to address the issue in Congress. The two legislators sponsored an invoice this year in every chamber that would expand dental coverage in Medicare, Medicaid, ACA Exchange Plans, and the Department of Veterans Affairs.
