The new healthcare concierge on the block

[disclaimer: Although 10Ks and S1s are snapshots of the company in question, I am interested in the nature of the business and economics of the industry / sector. These articles will not go into financial analysis of companies but highlight interesting business models, macro and microeconomic insights of the industry and companies, interesting accounting issues, risks and any interesting tidbits I can discern. These are not recommendations to buy or sell any securities of the company in question.]

Continuing on the theme of the US Healthcare being a complete mess (see Evolent 10K), here is a new IPO that aims to help you navigate the complexities of providers, insurance, co-pays and claims management of the US healthcare system. Accolade is a health care concierge, the company has developed a customer relationship management software. They employ clinicians who include registered nurses, physicians, medical directors, pharmacists, behavioral health specialists, and women’s health specialists. These clinicians are the “man in the middle” to help with classifying, labeling and enhancing the algorithms and CRM to provide better answers, care and ease the patients issues.

Learnings about the Industry / Sector

  • The total annual employer cost for healthcare is estimated at more than $10,000 per employee. Over the past five years, this cost has increased roughly 6% per year and is expected to continue to grow at that rate.

Learnings about the Company

  • The product is a software based health care concierge. Accolade aims to provide employees and their families (our “members”) a single place to turn for their health, healthcare, and benefits needs.
  • While this is not surprising, more people engage when they have a larger spend. Over the last three years they have averaged approximately four encounters per year with member families for whom their employer incurs less than $2,500 in claims spend in a given year and approximately 16 encounters per year with member families for whom their employer spends $50,000.
  • Accolade’s primary offering was shown to reduce claims costs by $500-$750 per employee per year.
  • Accolade has just 53 customers with more than 1.5 million members (employees of the customer)
  • Comcast, Lowes and United Airlines constitute 60% of their revenue for the fiscal year ended 2019. Comcast Cable alone accounted for 35%.
  • Comcast was an early investor in the company through Comcast Ventures and holds more than 5% of the shares.
  • The CEO Rajeev Singh was issued 8,000,000 options with a strike price of $0.84, today the stock price is $32.
  • In 2019 they had revenues of $95M with a net loss of $56M

Red Flags

60% of their U.S. based labor force are hourly employees, They recently entered into a settlement (subject to final court approval) related to a matter brought by a class of Accolade Health Assistants employed from August 2014 through August 2017 alleging misclassification of exemption status and a failure to pay appropriate overtime wages.


It speaks volumes about the complexity and state of the healthcare system that we have startups that solely focus on becoming healthcare concierges and has hit an annual run rate of almost 100M in revenues. This promises to be an interesting company and business model.

An observer at the crossroads of technology, economics & investing.