While many healthcare startups focus on large employers to grow their businesses, Minnesota-based Nice Healthcare is taking a different tack. The startup, which offers direct primary care services for a set monthly fee, instead chose to focus on small- and medium-sized businesses.
“All the other startups go to the big cities after the big clients with the big names,” CEO and Co-Founder Thompson Aderinkomi said in a phone interview. “Small businesses, who are hit the hardest in any recession, are bearing the largest healthcare costs disproportionately. I wanted to build a company that’s going to serve them.”
He and three other co-founders started Nice Healthcare in 2017. Since then, it has already drummed up business with more than 200 companies representing roughly 30,000 members. The startup hires nurse practitioners to provide in-home and telehealth visits for a flat rate of $30 to $36 per member per month. They can also conduct some lab tests and x-rays in patients’ homes.
Aderinkomi, who previously worked in the insurance industry before founding another startup, RetraceHealth, said a frustrating experience taking his son to the doctor led him to start the company.
“The original spark was an experience I had with my son at the pediatrician. He’s almost 10. We had a very expensive, inconvenient experience where it took four separate visits for a simple diagnosis of pneumonia,” Aderinkomi said. “I said, ‘there has to be a better way to do this.’”
Because he was on a high-deductible plan, he ended up paying more than $600 to get to the final diagnosis.
Nice Healthcare’s price doesn’t change with utilization and doesn’t change based on employer size. Its average client has about 40 employees, Aderinkomi said. For example, ACR Homes, which provides healthcare and assistance to people with disabilities, counts itself as one of the company’s clients.
Now, with $5 million in new seed funding, the startup plans to further expand its reach. It currently operates in five states, including its home state of Minnesota, Nebraska, Arizona, Wisconsin and Utah. Early next year, it plans to open in 10 new markets, for a total of 20 markets across 10 states.
“The new funding will allow us to do that without missing a stride,” Aderinkomi said.
Nice Healthcare is also expanding the benefits it will offer. Starting next year, it will include virtual physical therapy and free coverage for 550 medications.
So far, Aderinkomi said patient uptake has been good. On average, Nice Healthcare sees monthly utilization rates of about 15%.
Waterline Ventures and Conductive Ventures both led the seed funding round. The startup’s first investor, Indie.vc, also participated.
Indie.vc Founder Bryce Roberts and Waterline Ventures Founder Robbie Greenglass will join Nice Healthcare’s board of directors.
“Nice Healthcare puts patients first in what we believe is the next generation of how primary care will be delivered,” Greenglass said in a news release. “We were blown away by the passion and expertise that Thompson and the founding team at Nice bring to the table.”