Sister company of Google wants to bid on managed care

Verily, the healthcare unit of Google’s parent company Alphabet, is planning a move into the health insurance market by joining with existing insurers for bids on care management and population health contracts.

According to CNBC, the division formerly known as Google Life Sciences has been in talks with insurers to bid for managed care contracts offered by state governments or employers. It previously decided against a very similar proposal to work with Oscar Health to bid for Rhode Island’s Medicaid managed care business.

The downside risk involved with managed care hasn’t stopped payers, particularly state Medicaid programs, from increasingly turning towards the model for its lower-income population. While Verily’s plan may make use of these data analytics capabilities, the healthcare space requires a different approach to risk which may be challenging for technology companies.

“Taking on (health) risk is a different order of magnitude of complexity than what we see in other industries,” said Robert Mittendorff, a venture capitalist with Norwest Venture Partners. “It requires the right team, with the right resources and the right focus.”

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