Frank Wu is the co-founder and CEO of Taro Health, an early-stage start-up offering comprehensive health insurance that includes a Direct Primary Care membership. Prior to founding Taro, Frank worked at TrialSpark, a clinical trials technology platform. Frank graduated from Yale University with a Bachelor’s Degree in Computer Science. 

The Pulse: I’d love to hear more about your entrepreneurial background and the journey that led you to found Taro Health.  

Frank Wu: I started off with a Computer Science degree at Yale, where I cut my teeth building products in the early days of Honey, a browser extension that saves millions of Americans money at checkout. I loved the idea that simple technology could have such a meaningful impact on so many people. I quickly shifted my attention to health care, where I saw similar opportunities for technology to drive major real-world impact.

After Yale, I joined the clinical trial startup called TrialSpark as their first employee, and we navigated the journey from being a software vendor for clinical trials, to running our own clinical trial research clinics, to becoming a full-stack pharma company. I had a front-row seat to the challenges and joys of building highly regulated products in healthcare, and actually met my co-founder (Jeff Yuan) at TrialSpark.

After some personal and family experiences with insurance, I became an independent insurance agent to learn how health insurance worked. I didn’t discover the ideas that ultimately evolved into Taro Health until a few years ago, when my cofounder and I stumbled upon the direct primary care model.

The Pulse: What is direct primary care (“DPC”) and how does it differ from traditional primary care?  

FW: DPC is a novel primary care business model that I believe is the future of primary care. Today, the DPC model generally involves patients or employers paying a flat monthly membership fee in exchange for unlimited access to a primary care doctor of their choice, kind of like a Netflix subscription for core healthcare services.

By charging a membership fee, DPC physicians receive a more stable income source, and are able to spend more time with their patient panel, rather than focusing on maximizing visits and billing reimbursements fee-for-service. On the other side, patients receive more access to their doctor, more relationship-based care, and are able to receive care the same-or-next day instead of having to wait 3 months for a 15-minute appointment.

When my co-founder and I first discovered direct primary care, we felt like we had stumbled into an alternate healthcare universe that broke all of our existing understandings of primary care. DPC just made sense, and it helped tackle hair-on-fire problems with both patient access and PCP quality of life.

The Pulse: Can you tell us about Taro’s mission? How do you plan to improve the patient experience?  

FW: While DPC covers a large swath of patient needs, DPC patients still need insurance in order to manage everything else, including hospital visits, surgeries, or expensive treatments – and this means they’re paying for a DPC membership out-of-pocket on top of their health insurance premiums and deductibles.

Enter Taro Health. We’re a fully-insured, major medical insurance product on the Affordable Care Act (“ACA”) that wraps around the DPC model and fully embraces the spirit of DPC. Our customers span individuals, families, and small businesses, and all of our patients receive the personal, relationship-based care experience of DPC at no additional cost. Customers also still have robust insurance coverage for specialists, procedures, emergencies, and more. 

Our mission is to build a health care system that makes sense – and that starts with ensuring we have a foundation of primary care that works for patients AND for physicians and providers. As the payer, we operate at the highest vantage point and have the unique opportunity to rebuild the technical systems and payment models from a clean slate. We’re helping patients get more access to high-touch primary care, existing DPC physicians grow their businesses, and burnt-out PCPs make the switch into DPC.

The Pulse: Congratulations on launching in Maine! What have been your key learnings since launch and what have been the biggest surprises?  

FW: Thank you! We’ve had an extremely successful launch in Maine, and it’s been gratifying to see all the positive feedback from our patients and physician partners.

I’ll start by saying that it’s unfortunately not a surprise that the average consumer’s understanding of health care and health insurance is extremely lacking and that our status quo is extremely complicated. We’re constantly reminded that people don’t understand how the US healthcare system works, at all – they’re bombarded with confusing documents and have to figure out how deductibles, co-pays, co-insurance, prior auths, and more all work together. It’s been a good reminder that we have a lot of work to do in order to make this healthcare “make sense” to all, and that all this complexity tends to leave patients lost when it comes to engaging with their healthcare. And so despite all of that, we’ve been really excited to see all the engagement in both patient and physician communities here in Maine – whether that comes from referring friends, starting new medical practices, or even just interacting with our tools and teams.

The Pulse: What can we expect from Taro in 2023? What are you most excited about? 

FW: We’re continuing our hard work of engaging our patients and physicians. In our initial state of Maine, we’re looking to expand from our first launch county into a few other neighboring counties. On top of that, we’re starting to consider other, similar markets to the Portland metro area we are currently supporting, as well as using our launch playbook to serve other markets that need better access to care.

We’re also gearing up for Medicaid redeterminations starting this spring. As many as 18 million Americans nation-wide are set to roll off of COVID-driven Medicaid coverage in the coming months, and we’ll be actively supporting these transitions with our ACA-subsidized coverage.

The Pulse: What is your long-term vision for Taro? How does it fit within the broader healthcare ecosystem?  

FW: When I look around the healthcare ecosystem, I see a lot of exciting and meaningful innovation that is going to lead to better health outcomes, lower costs, and better alignment between payers, providers, and patients. We desperately need these innovations: care costs continue to skyrocket, and we’re on the cusp of a major crisis with physician and provider burnout.

Taro is the intersection of all of this – we’ve started with Direct Primary Care, and we want to first see more patients engaged with their health because of the increase in access provided by the DPC model. But you can extend this further: every new care/delivery/business model out there needs a new payer that understands and can support all of the nuances of healthcare delivery. To drive lower costs, we’ll need to become the most individualized plan for patients, and that ultimately starts with our ability to support providers with the business of healthcare, and not with the business of “reimbursing insurance.”

Over the next ten years, I think some of the most important changes and innovations in our ecosystem will involve how each of these parties can work together – how providers work with payers, how payers attract providers outside of just scale, how patients get access to these providers.

The Pulse: What advice would you have for students thinking about starting a company in healthcare or looking to join an early-stage start-up?  

FW: Healthcare is complex and nuanced. Find a segment or team that you really believe in and take the time to understand what problem you are solving, who you are solving it for, and the entire history of the space. To be successful in healthcare, you need to have a healthy respect for the incredibly smart people (yes, incumbents as well!) and decisions that have gotten us to where we are today. However, you should also possess the ability to ask deep, probing questions and build your own independent conviction. The best founders and operators I’ve met have the unique ability to balance these two, and they know when they need to flex each muscle.

Interviewed by Tommy McGrath, January 2023.

—

On Feb 16-17, 2023, Wharton is excited to feature more expert perspectives at our annual Wharton Health Care Business Conference. This year’s theme is ‘The Empowered Health Care Consumer’. Conference details and tickets are available here.