Merit Medicine, a health tech startup that helps self-funded employers anticipate high-cost medical spend and specialty drug utilization, and chronic, complex, and rare diagnoses, announces that it has closed a $2M seed round led by LiveOak Ventures.
Founded in 2022, Merit Medicine seeks to bring AI insights to the often-opaque employer-sponsored health insurance market. Employers who self-fund their employees’ health plans face an era of rapidly escalating healthcare costs. With the expansion of high-cost medical spending and the rapid introduction of more targeted and expensive specialty drugs, the seemingly-unpredictable nature of these expenses can decimate budgets and ultimately lead to fewer people getting the care they need.
Company founder and CEO Ali Panjwani, who is a leader in improving market access to treatments for people suffering from complex conditions with stops at Genentech, BridgeBio Pharma, Coherus Biosciences, and Aetion, created Merit Medicine to guarantee everyone has a fair shot at the best care.
“Large self-funded employers cover over a quarter of the US population today,” said Panjwani. “And employer contributions to healthcare now make up roughly $600 billion of annual healthcare spending in the United States. Using AI insights from millions of patients, Merit Medicine ensures a smoother, more predictable budget for employers’ catastrophic healthcare spend, which leads to more people getting affordable access to the care that they need when they need it.”
Stop-loss carriers, responsible for insuring employers against substantial claims arising from these drugs and treatments, handle extensive information to calculate the premiums for employers. In contrast, self-funded employers rely solely on their own employee population.
Merit Medicine levels the playing field by leveraging its extensive dataset, consisting of millions of data points, to generate predictions tailored to the specific population of each employer. The company combines its proprietary models and unique dataset with employer-specific population data to make budgeting more predictable for self-funded employers. Going beyond the industry standard of simply extrapolating from last year’s results to predict this year’s, Merit Medicine empowers benefits leaders with AI-driven predictions based on patient journeys, enabling them to offer the best benefits to their employees.
“Self-funded employers are faced with rising healthcare costs and significant financial risk based on the health of their employee base,” said Mike Marcantonio, who is leading the investment for LiveOak Ventures. “Unfortunately they have very few tools today to evaluate this risk and plan for it.
“When I met the Merit Medicine team, I was inspired by their mission to help employers address this risk by using AI to predict high-cost specialty drug usage and rare, chronic, and complex conditions. The team’s domain experience also stood out with experience in drug pricing, market access, and healthcare data analytics.”
