Accolade, with 500 employees in Plymouth Meeting, seeks to boldly cut health costs for big companies

July 12--Ericka Andrews talks people through what they need when they're discharged from the hospital. Do they have stairs at their home? Can they pay for their drugs? When will they visit the doctor next?

Glenn Oczkowski says his big frustration at behavioral health clinics where he last worked was that the only time he felt the patients were safe was when they were in the hospital. "Something was wrong," he said.

Krissy Iaci says she was constantly pulled from patients in their beds when she worked at a leading suburban hospital. Now she says it "feels good to educate clients on their disease process."

All three were trained as nurses but now are "personal health assistants" at the fast-growing Accolade in Plymouth Meeting. Accolade is a venture company funded with $200 million that seeks to cut corporate health-care costs by helping employees navigate the nation's complex health-care maze of second opinions, deductibles, urgent care versus ER visits, specialists, prescription drugs, and post-hospitalization care.

It is part taskmaster, part minder, part friend in a health emergency, and part appointment manager. The Accolade phone number is included on health-care cards handed out to employees by companies such as Comcast and Lowe's, and employees are encouraged to call in a health emergency, or just to chat about options or medications. Accolade says its health assistants are not there to counsel against expensive health-care procedures but to help those sick get well as quickly and affordably as possible.

Experts say the verdict is still out on whether Accolade can systematically reduce health-care costs. The firm also faces a raft of competitors, including West's Health Advocate, which also advises patients and also is based in Plymouth Meeting.

Still, Accolade has been on a hiring binge since a leadership change in 2015. It has a famously entrepreneurial CEO, a sharp focus on web technology, and backing from Comcast and some Silicon Valley heavyweights.

Accolade also has 850 employees, with 500 in Plymouth Meeting and others in Seattle, Scottsdale, Ariz., and Prague, Czech Republic, and probably many more on the way. The career website themuse.com recently cited Accolade as the No. 1 company in an article headlined "20 Companies That Are Going To Be Huge (And Are Hiring Right Now)."

"People bounce around the health-care system and they waste money as they bounce around," said Steve Barnes, Accolade's chief financial officer and veteran of the former University City startup Energy Plus Holdings LLC. "CEOs want to throw up their hands over this because there is nothing that they can do."

Barnes and others say $8 billion to $10 billion in venture capital has flowed into finding solutions to help control the nation's health-care costs, which investment guru Warren Buffett has called a "tapeworm" eating away at industry's profits.

Barnes takes exception to calling Accolade a call center like those run by a credit card or cable company.

"This is not a call center," he said. "Most times Accolade employees have a college degree. They could be teachers or former managers with a high empathy quotient," he said. Callers spend an average of 14 minutes talking with their Accolade health-care assistant, an indication of the trust that people have in them, Barnes said.

Accolade says that health-care inflation can range between 5 and 7 percent a year for corporate health-care plans. But Accolade can contain those hikes to around 1 percent, the company claims. Accolade covers 700,000 members, and about 1.2 million people, including dependents, and it counts Comcast, AmeriGas, Lowe's, and the Temple University Health System as clients.

Barnes said that Accolade, which launched in 2007, takes a flat fee and a percentage of the cost savings at an organization as payment. He did not disclose terms.

David Nash, a dean and health-care economics expert at Thomas Jefferson University, said that there is no published evidence that services such as Accolade cut health-care costs for big corporations. But he also called it a "fantastic benefit" for employees because it's free for them and because "care coordination is so difficult for the average family."

And while he wasn't sure that Accolade could save companies money, the service will help employees return to work faster after illnesses. Accolade works to prevent hospital readmissions through its health therapists advocacy. He cautioned that services such as Accolade add "administrative costs" on a health-care system already burdened with massive bureaucracy.

With its base of teaching hospitals and pharmaceutical companies, the Philadelphia region is a logical spot for Accolade, Nash said.

"One of the insights [of Accolade] is that the patient calls you instead of you calling them," said Ezekiel J. Emanuel, chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania. "It's not your doctor's office and it is paid by your employer. But it is patient activated."

Emanuel said that 86 percent of the costs in the health-care system come from chronic diseases such as heart failure, diabetes, asthma, cancer, and emphysema. Accolade health assistants could help manage these diseases, reducing costs, he said.

"A lot of innovation is taking place [in health care] at this time and Accolade is one example," Emanuel said.

Tom Spann, who headed the health-care practice for the Accenture consulting firm, launched Accolade with former colleague John Rollins in February 2007 out of a Chestnut Hill coffee shop.

The idea for Accolade was to communicate and build relationships with people before they got sick, Spann said. Two years later, Accolade signed its first big client: Comcast. The Philadelphia cable giant agreed to a pilot of the Accolade service with 25 percent of employees, in eight states.

Comcast Ventures, a unit of the company that invests in startups, put seed capital into Accolade after seeing Accolade's results with Comcast employees, Spann said. Accolade now covers all of Comcast's employees.

William Strahan, head of human resources at Comcast/NBCUniversal, said "the missing part of our health care was that moment when someone has a sick child or a sick [spouse] and that they are not sure of what to do. That is the absolute wrong human circumstances to educate yourself on your health plan and the health-care system."

In 2015, Spann decided to step down at Accolade, believing that the company was ready for its next phase of growth -- to be more digital so that it could quickly scale up and reach millions of people.

He recruited Rajeev Singh, a co-founder of Concur, which designed and sold software to help companies manage employees' expenses. In 2014, German business software firm SAP, with its U.S. headquarters in Newtown Square, had bought Concur for $8.3 billion.

Other former top Concur executives also joined Accolade as Singh tapped into Silicon Valley venture capital funds, with the idea of making Accolade a more digital experience with a mobile app and telemedicine options. These former Concur executives are based in Seattle.

Among the new venture capital backers that Singh helped bring to Accolade was the Andreessen Horowitz fund in Menlo Park, Calif. The fund's co-founders include internet pioneer Marc Andreessen.

Over its existence, Accolade has raised $200 million from venture capital firms that include Comcast Ventures, Accretive, Carrick, Cross Creek, and Madrona Venture Group. Independence Blue Cross also has put money into it.

"The guy who built the business cannot always optimize it," Spann said. "I like to build things. And this had been built, and it needed to be transformed to be more scalable."

Phong Nguyen, Accolade executive vice president of product management and a former Concur executive, said the idea is for Accolade to use mobile apps and telemedicine to reach more people. But he added, "We believe that people will always be a fundamental part of our system. People will run into dead-ends and, at some time, you will want to talk with a person."

Andy Rosa is a director of human resources and benefits at AmeriGas in King of Prussia, which has 8,000 employees. He said that 30 to 40 percent of AmeriGas employees call Accolade right away when they get their health-insurance cards, even before they have a health problem to talk with an Accolade health assistant.

"You might be sick now. But you should establish this relationship," Rosa said that AmeriGas employees are told. "I have Sarah," he added. "She's on my phone. She's my health-care BFF."

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