Digital Health’s Newest Unicorn Provides Lonely People With A ‘Family On Demand’

Published by Forbes, November 2021

Andrew Parker’s grandfather needed help, but he didn’t need a doctor. He needed someone to help him with groceries and take him to doctor appointments. “Who wants to be a pal to my Papa?” Parker wrote in a Facebook post. More than a quarter of the U.S. population — and 28% of seniors — live alone. Social isolation can have serious downstream effects to people’s health, such as raising the risk of heart disease or stroke, and it’s estimated to cost the federal government $6.7 billion a year.

Several years after that Facebook post, Parker, 33, is helping seniors and low-income families get access to companionship and help around the house as the cofounder and CEO of Papa — and it’s being reimbursed by insurers. “We drive you to the doctor. We help you around the house. We teach you these computers. We engage you with your health. We take you on walks,” says Parker, who cofounded the company with Alfredo Vaamonde and Jake Rothstein in 2017. “We’re really like family on demand.”

On Thursday, the Miami, Florida-based company announced a $150 million Series D round led by SoftBank Vision Fund 2 that values Papa at $1.4 billion. The company has raised $240 million to date. The interest from investors, which also include TCG, Tiger Global Management, Canaan, Initialized Capital and Seven Seven Six, speaks to the growing recognition that a person’s “health” isn’t limited to the doctor’s office — a combination of socioeconomic factors from access to transportation to distance to a grocery store play a role in long-term healthcare costs. Plus, the federal government changed the rules in 2019 so that companionship and social support services could be reimbursed with Medicare dollars.

Today Papa is contracted with more than 65 health plans to send what the company calls “Papa Pals” into people’s homes. And it’s not limited to seniors — Papa also works with Medicaid plans for low-income families and with employers as a benefit for family caregivers. The typical Papa encounter starts with a phone call, says Parker. If the person agrees, a Papa Pal is dispatched to the patient’s home, where they have a conversation about their needs and offer support with day-do-day activities, like driving to a doctor’s appointment or preparing a meal. During the Covid-19 pandemic, Papa also started offering virtual visits.

“Through that relationship and trust, we’re able to really move the needle on whatever is important and whatever gap exists for that member,” says Parker. The pals’ help isn’t limited to errands. They also make notes on issues they might spot within the home, like uneven floor boards or a bathtub with a high rim that could contribute to falls. The member then gets a follow-up call from a member of Papa’s care team who explains how the person could use their insurance for home modification to make it more accessible. Last quarter alone, Parker says pals made 10,000 of these “gap identifications,” which are issues that could help improve the quality of life of the member in their home. The company is also using AI to better prioritize member needs. “We can’t solve all problems, but we can identify a lot of them,” Parker says.

While Papa has signed on major insurers, like Cigna, Aetna and Humana, it’s still early days in terms of being able to value the overall reduction in healthcare costs in the long-term, but Lydia Jett, a partner at SoftBank Investment Advisers, says the early indications are positive. “There’s no doubt in my mind that relative to the cost of service, the types of benefit that we’re seeing are very significant from an economic standpoint,” says Jett, who serves on Papa’s board of directors. “If we can provide companionship and help eliminate some of the loneliness that people are feeling, but, at the same time, pair that with really understanding the home environment … I think these are meaningful levers that can be pulled pretty inexpensively to help improve the quality of life for individuals.”

While Parker’s motivation to start Papa was inspired by his experience trying to help his aging grandfather, he gets some of his business acumen from having worked alongside his father Randy Parker, who was the founder and CEO of telemedicine startup MDLive. Andrew Parker worked at MDLive as a director of sales and later vice president of health systems before leaving to start Papa in 2017. He teamed up with his cousin Rothstein (who later left to start a senior community living startup) and Vaamonde.

In the beginning, Papa focused on recruiting college students to serve as companions, but as the company has grown, so has the network of Papa Pals. Parker says the company gets around 10,000 to 15,000 applications a month from people of all ages, but only around 8 to 10% actually make the cut. Every pal needs to take a personality test, pass a background check, car screening and social media scan. The around 25,000 pals in Papa’s network earn an hourly rate between $20 to $25 an hour (plus an opportunity for bonuses) and will provide around 500,000 companionship hours this year. Parker says around 20% of Papa Pals fall in the category of pre-med, nursing or social work students, but the vast majority don’t have a background in healthcare. “By removing bathing and toileting, which we do not do, we’ve now empowered a whole new category of care,” he says.

As of January 1, 2022, Cigna will be the latest major health plan to offer Papa to around 70,000 of its Medicare Advantage and dual eligible members across nine states. The health insurer has been studying the effects of social isolation and loneliness long before the Covid-19 pandemic, declaring loneliness at “epidemic levels” based on its 2018 national survey. When repeated two years later in 2020, Cigna found 61% of Americans reported feeling lonely, a 7-percentage point increase. The expectation is the Covid-19 pandemic will only make things worse.

“Right after the pandemic hit, we noticed that seniors were struggling the most, not only with isolation, but also really importantly with not being able to keep up with their doctor’s appointments,” says Aparna Abburi, president of Cigna’s Medicare Advantage business. In response, the health insurer established a virtual outreach program to make sure members were set up for telemedicine visits and that they had someone to talk to. Coming out on the other side of the pandemic, Abburi says Cigna wanted to “really make sure that we’re not just offering a virtual program but to enable in-person, in-home visits,” says Abburi. After scanning the market, Cigna decided to go with Papa given its reach in the company’s major markets and the flexibility offered by the Papa Pal model to personalize each experience. Because, as Abburi likes to say, “no one size fits all seniors.”

Right now Papa’s biggest markets include Florida, Texas, Michigan and California, which track with the biggest Medicare Advantage and managed Medicaid markets. Parker says the main goal is to keep contracting with more health insurers to expand the universe of people that Papa serves, especially as the state of the world remains in flux as the pandemic continues. “I don’t want to say that Covid was the reason we grew,” says Parker. “I just think that anyone that didn’t believe in loneliness, or isolation definitely does now because all of us have experienced it.”

Originally published at https://www.forbes.com.

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