As the U.S. grapples with rising health care costs, one young startup has created a health care platform that caters to immigrants who send money back to their home countries.
Hoy Health is leveraging the $549 billion remittance market as a way to offer medication services to under-served populations — most notably Latin Americans, which have $2 trillion of purchasing power.
The company offers tele-health services for $25, drugs priced between $10 and $40, and a voucher system to gift drugs to friends and family abroad.
The company launched in December 2017, and has since established operations across the Americas, including the U.S., Puerto Rico, the Dominican Republic, Mexico, Guatemala, among others. They are also now starting up in Colombia.
CEO Mario Anglada told Yahoo Finance that Hoy Health is “taking time and distance out of the medical relationship. All we did was invent how to gift medication.”
Right now, Hoy has 8 employees, and a business model that’s founded on one of the best kept secrets in health care: That cash payments often result in lower price tags for health services and products.
Anglada views at current market as archaic and needlessly complex, and trying to simplify it. Given the silos that exist among providers due to increasingly complex systems like hospitals, he felt confident Hoy Health could offer improvements.
But the company insists it’s not out to transform the health care market, or take on those who are trying to disrupt it — like Haven, the health venture formed by Amazon (AMZN), Berkshire Hathaway (BRK) and JPMorgan Chase (JPM).
“I am not in the disruption business, and we don’t need to be,” Anglada said. “You can’t disrupt health care.”
Serving where Big Pharma doesn’t
The company’s entry into health care comes at a time when the ranks of the uninsured having grown in 2018, according to U.S. Census Data — thanks in part to the repeal of Obamacare’s individual mandate, and mounting challenges to immigrant benefits.
Hoy’s volume-driven model offers low-cost services and products, with the objective of penetrating one of the hardest markets for health care giants: Minority communities.
At around 2,500 users, Hoy’s client base is still relatively small. The company has also faced some traditional startup headwinds like access to funding, but has successfully raised half of the $4 million in seed funding it needs.
The Hoy concept came from the collective experience of the team behind the startup; All served in leadership positions at some of the biggest health care companies in the country, including Bayer (BAYZF), Johnson & Johnson (JNJ), Novartis (NVS), and United Health (UNH), just to name a few.
That collective experience helped create Hoy Health’s services, but it didn’t solve the original problem: penetrating the Latin-American market.
According to Anglada, big pharmaceutical companies do not engage with the Latino market “because it doesn’t understand the nuances of how to engage.”
Chief strategy officer Jose Aguilar told Yahoo Finance that Hoy is “targeting populations that Pharma is not targeting,” he said.
“When you hear about [ideas like Haven], it’s all for employed populations. Nobody is talking about those who don’t have insurance and don’t have premiums,” he added.
Hoy Health is on the ground floor searching for customers, in places like unions, trade groups, hospitals and clinics — and advertising to them directly or through social media.
But in order to attract customers, the company needed to employ a grassroots-level strategy and create a strong tracking model. That’s how it came around to delivering medication to remote areas — within 36 hours of filling a prescription, according to Anglada.
‘Next steps up the evolutionary ladder’
Anglada said Hoy’s big idea was to create a multicultural, multilingual, HIPAA-compliant and high tech strategy.
And it did just that, by creating a platform that shows the cost of a drug at nearby pharmacies, with negotiated prices through Hoy that range from $10-$40, and allows for digitally-tracked vouchers to be bought for patients in other countries.
In addition, clients get educational services, a starter kit for some of the most common chronic diseases, and testing kits and monitoring devices that cost $89. That price is much lower than prevailing insurance costs.
And to keep track of it all, the company created its own electronic health record.
“We standardized everything in the electronic medial record,” Anglada said.“We did that on purpose because the challenge in health care, today, is (health providers and pharmacies), none of them talk. With our system, we connected everybody.”
In addition, the data now belongs to the patient, first, who then chooses whom to share it with, including health care providers, extended family and caregivers, Anglada said.
The company is bullish about the future of the remittance market, which they say will help fuel their growth into other regions, like Asia. China, India and the Philippines also their list of target markets, based on the remittance numbers of those citizens living abroad.
With the prevalence of smartphones in remote areas, which makes it easier to connect by video around the world, Hoy Health’s executives believe telemedicine has a strong growth trajectory.
“What we’re offering is the next two steps up on the evolutionary ladder for these countries,” Anglada said.
Anjalee Khemlani is a reporter at Yahoo Finance. Follow her on Twitter: @AnjKhem