I think one critical thing you’re missing from the Amazon discussion is Hims ability to grow so effectively while refusing to take insurance. I think it is a fundamental competitive advantage relative to other companies figuring out how to involve insurance, especially Amazon.
Right now, insurers attract the majority of revenues in the health care value chain since they’re typically the “customers” of any care. They partake in insane levels of price fixing and manipulation to continue to grow profits year over year, even with a constant customer base (ie number of people insured). This is the main reason health care costs continue to skyrocket. On top of all this, there is no way for people to switch insurances since it’s provided by employers. Employers tend to just pick the cheapest carrier.
By not using insurance, and still having a large customer base, Hims is able to negotiate directly with care providers to get the best costs and pass those savings along to the consumer. Hims cannot partake in price gouging, as their subscribers would churn.
Over the long run, Hims has a realistic chance of usurping insurance providers as the primary distribution channel for care.
I agree. People keep asking about insurance and I feel strongly that no insurance is actually a differentiator for HIMS. I was glad to hear Dudum dismiss the idea during last call.
I think one critical thing you’re missing from the Amazon discussion is Hims ability to grow so effectively while refusing to take insurance. I think it is a fundamental competitive advantage relative to other companies figuring out how to involve insurance, especially Amazon.
Right now, insurers attract the majority of revenues in the health care value chain since they’re typically the “customers” of any care. They partake in insane levels of price fixing and manipulation to continue to grow profits year over year, even with a constant customer base (ie number of people insured). This is the main reason health care costs continue to skyrocket. On top of all this, there is no way for people to switch insurances since it’s provided by employers. Employers tend to just pick the cheapest carrier.
By not using insurance, and still having a large customer base, Hims is able to negotiate directly with care providers to get the best costs and pass those savings along to the consumer. Hims cannot partake in price gouging, as their subscribers would churn.
Over the long run, Hims has a realistic chance of usurping insurance providers as the primary distribution channel for care.
That's a great point
I agree. People keep asking about insurance and I feel strongly that no insurance is actually a differentiator for HIMS. I was glad to hear Dudum dismiss the idea during last call.
I totally agree, I just did a financial model on this same topic, curious your thoughts - https://open.substack.com/pub/conduitofvalue/p/hims-hims-and-hers-the-pharma-brand?r=5pt4w4&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false