Five months after raising $80 million in funding digital health insurer Bright Health is getting ready to launch in Colorado.

In April, Minneapolis-based Bright Health raised $80 million in funding from investors including Bessemer Venture Partners, New Enterprise Associates and Flare Capital Markets.

Now the digital insurer is set to launch in Colorado when the states 2017 open enrollment period begins in November. The company plans to expand into other markets, including Medicare Advantage, a type of health plan offered by commercial health insurers that contract with Medicare to provide Part A and Part B benefits.

Bright Health aims to differentiate itself from other health insurance providers with e-commerce technology and data analysis, and by relying on a single healthcare provider network versus multiple health systems, says chief medical officer Tom Valdivia. In Colorado, Bright Health will offer enrollees health services through the Centura Health network, the states largest, with 6,000 physicians across Colorado and western Kansas and 17 major hospitals.

By limiting its network to a single health system, Bright Health expects to offer consumers exclusive provider organization, or EPO, health insurance plans. One benefit of EPOs for carriers is that patients receiving care out of network bear the full financial responsibility for treatment, Valdivia says. EPOs also can be more affordable for consumers than plans supporting a larger network of healthcare providers, and that lower cost can attract more consumers into the network, he says.


Bright Health wants to further hold down costs through preemptive care. Although the company wouldnt supply detail, Bright Health will use analytics to spot trends within a patients health records that reveal health issues that can be treated before they become expensive problems to treat, Valdivia says.

Bright Health members can take advantage of stronger relationships with doctors and a simpler, friendlier and more integrated technology experience from end-to-end, Valdivia says. Well also make it a priority to educate consumers on the costs of healthcare.

By working with a single health provider network Bright Health may have an advantage over other digital healthcare startups or traditional health insurers that sell online through multiple public and private health exchanges, says one industry analyst.

EPOs create a narrow network that carriers can leverage to negotiate discounts in exchange for bringing providers more business, says Patrick Kennedy, owner of healthcare payments consulting firm PJ Consulting. Its a way for carriers to lower their costs.

While Bright Health contends its new business model will keep pace with changes in the consumer health insurance market, the company still faces an uphill battle, Kennedy says.


90% of the carriers on the exchanges have lost money even with narrowing their networks, Kennedy says.

Bright Health will provide billing and claims processing support as well as mobile apps to help patients better manage fitness and wellness and communicate with their primary care physician, the company says.

Bright Health is targeting Colorado as its first market primarily because of the size of Centuras health network. In addition to hospitals, Centura also operates 14 ambulatory surgery centers and 20 occupational medicine and outpatient clinics. It was pretty clear straight out of the gate that Centura Health was a good fit for our model, Valdivia says. They have a reputation for offering high-quality care and making healthcare more accessible.

Bright Health says its e-commerce platform and technology infrastructure will be a big asset, including its data warehousing and analytics capability. A prototype health app shown on also will offer features such as finding healthcare providers and scheduling appointments online.

Bright Health will use technology and data as a convenient and simple means to get patients the right care through the right care partner, and we integrate with the provider’s workflow through sophisticated data warehouse and analytics to facilitate a digital connection with a care partners facilities and clinicians, Valdivia says. We coordinate patient care, which means patients get the information and access they need when they need it.


Bright Health is the latest in a series of digital insurance companies raising capital for a run at the consumer-driven healthcare market. In January, Oscar Health raised the largest funding round for a U.S. online insurance company, bringing in $400 million investment from a group of backers headed by Fidelity Investments, a unit of Fidelity Brokerage Services LLC. In June a digital healthcare and employee benefits startup founded by a former e-retailing executive secured $25 million in new funding to roll out across the United States and Canada. League Inc., founded in 2014 by Michael Serbinis, the former chief executive officer of electronic book reader developer Kobo, received the new funding led by OMERS Ventures, a Toronto venture capital firm.

Bright Health plans on growing carefully and selectively to make it past the start-up phase and develop credibility in the health insurance market, Valdivia says. We are in active and advanced discussions with multiple leading systems in several different regions, he says. When determining an exclusive care partner in a market, we look at their commitment to and track record of delivering efficient, high-quality care, appropriate market and clinical coverage, and an openness and desire to truly partner with Bright Health to deliver a smarter, more connected experience for consumers and providers.

Bright Health founders have plenty of market experience. CEO Bob Sheedy is a former CEO of United Healthcare, the biggest commercial health insurer.