# Transcarent Financial Model Consumer-directed digital health platform connecting employer-covered members to high-value care across telehealth, surgery, pharmacy, and specialty services. - Canonical: https://finamodel.com/startups/transcarent - Excel download: https://finamodel.com/startup-models/transcarent.xlsx - Category: Biotech/Pharma - Model type: SaaS ARR / Valuation - Funding round: Series C - Funding: $200M - Founded: 2022 - Geography: United States. - Customer: B2B2C ## About the company Transcarent gives employer-covered members one app, web, and phone entry point for telehealth, pharmacy, physical therapy, surgery, hospital at home, and expert opinions. Its technology combines personalised navigation, predictive data science, live guides, and direct contracts with high-value providers, with turnkey employer implementation targeted within 90 days. Revenue combines a recurring PEPM subscription, utilisation-based case rates, and performance-based arrangements. Employers can put subscription fees at risk against savings, outcomes, and experience targets, or pay Transcarent 30% of actual savings. It sells to large, mid-market, government, union, and payor channels. The company reported one million covered lives and more than 80 clients, including Delta, Target, Albertsons, and GEHA. It cites NPS above 80, 85% member retention, and 97% client retention. The model should forecast clients, lives, PEPM, episodes, provider payouts, navigation cost, savings share, and renewal. ## What's included - 5-year monthly revenue build with stage-appropriate growth assumptions - Full P&L, headcount plan, and operating-expense schedule - Cash-flow statement, runway, and burn-rate tracking - Valuation via exit multiple with a DCF cross-check - Returns analysis with MOIC and IRR - Unit economics including CAC, LTV, payback, and cohort retention ## Product & value proposition - Single app/web/phone access point to health services 24/7. - Service categories: urgent care (telehealth in 60 sec, or at-home), pharmacy, musculoskeletal/PT, surgery coordination, hospital at home, expert second opinions. - Technology layer: predictive data science, personalization, member self-navigation with live guides available 24/7. - Network: direct-contracted, high-value providers and digital solutions; one contract for providers. - Additive to existing benefits; turnkey implementation (go-live within 90 days). - Client-side: single contract, implementation, and analytics package; full-risk pricing options. ## Market - 162M consumers covered by employers in the US. - $1.1T annual health spend by employers (assumes $7,000 PPPY). - Currently addressable (live services - urgent care, musculoskeletal, surgery): 20% of health spend = **$226B immediately addressable opportunity**. - Roadmap to 90% of member health spend (~$1T addressable) by 2023 as service lines expand (pharmacy, cancer, behavioral, primary care, cardiometabolic, women's health, etc.). - 2020 baseline: surgery only (~10% of spend, ~$100B). ## Revenue model Three-component pricing model: 1. **Subscription** - Per Employee Per Month (PEPM) fee; recurring baseline revenue. 2. **Utilization-based** - Case rates for care episodes delivered (telehealth, PT, surgery, etc.). 3. **Full-Risk / Performance-Based** - Either (a) subscription fees placed at-risk against savings/outcome/experience goals, or (b) shared savings: Transcarent paid 30% of actual savings realized, settled quarterly and annually. Sales channels: large employers, health system employers, mid-market employers, government employers, labor/unions, TPAs/payors. ## Traction & metrics - **1M** covered lives. - **80+ clients** including Delta, Target, Albertsons, GEHA, Meritain Health, NRECA, UNFI, and others. - **NPS 80+**. - **40%** reduction in urgent and emergency room visits. - **33%** reduction in unnecessary surgeries. - **80%** reduction in readmissions and complications. - **2–8%** reduction in total cost of care from shift to high-value providers. - **30%+** of covered lives targeted to activate as members via data-science-driven marketing. - **85%** member retention; **97%** client retention. - Utilization rates (as % of activated members): telehealth up to 100%; virtual PT and expert opinions 3–10%; surgeries 0.3%. No revenue ($) figures, ARR, or growth rate shown in deck. ## Unit economics - PEPM subscription provides recurring per-employee revenue base. - Shared savings model: 30% of realized savings paid to Transcarent quarterly/annually. - 2–8% cost-of-care reduction implies a savings pool from which the performance-based revenue is derived. - PEPM rate not disclosed. ## Competition / moat - Positions as a new category ("Experience Era") analogous to Uber (transportation), Travelocity (travel), Netflix (entertainment) - direct consumer-provider connection. - Moat claims: integrated platform (vs. point solutions), full-risk alignment, single contract/implementation, proprietary data science for personalization, live guide layer, direct provider contracts. - No explicit competitor names or competitive matrix in deck. ## Team & funding ask / use of funds Team (slide 8 - all senior hires from digital health incumbents): - Glen Tullman, CEO - Livongo, Allscripts, 7wire - Snezana Mahon, COO - Express Scripts / Evernorth - Stephanie Peng, CFO - Teladoc, Livongo, KPMG - Jamie Hall, CCO - BCBSA, BridgeHealth - Jeff Dobro MD, Chief Innovation Officer - Mercer, One Medical, WTW - Praful Kaul, CTO - Rally Health, Zynga - Erica Davila, General Counsel - Zocdoc, Haven, JPMC - David Zieg MD, CMO - Mercer, Lockheed Martin - (+ 4 further VPs/SVPs) --- ## Recommended financial model - **Archetype + why:** B2B2C digital health / benefits platform model - hybrid PEPM subscription + utilization-based case-rate + performance/shared-savings revenue. Closest archetype is an employer-benefits SaaS model with a utilization overlay (analogous to a healthcare navigation/navigation platform). NOT a pure SaaS ARR model (revenue has three streams with very different drivers). Recommend a **multi-stream P&L / 3-statement model** with discrete PEPM, case-rate, and shared-savings revenue schedules. - **Forecast horizon & granularity:** 5-year annual (2022–2026) with monthly granularity for Year 1; quarterly for Years 2–3. Deck is December 2021 Series C, so model starts Jan 2022. - **Key drivers & assumptions:** *Client & lives growth* - Clients at period start: 80+; new clients per year - Average covered lives per client - Member activation rate: 30%+ of covered lives; - Member retention: 85% annually - Client retention: 97% annually *Revenue per stream* - PEPM rate - Utilization rates (as % of activated members): telehealth up to 100%, PT/expert 3–10%, surgery 0.3% - Case rates per episode - Shared savings take rate: 30% of realized savings - Assumed cost-of-care reduction enabling savings pool: 2–8% of covered spend; - Spend per covered life: $7,000/yr *Cost structure* - COGS: care coordination staff, provider network payments, platform infrastructure - S&M: enterprise sales team, multi-channel (TPAs, payors, unions, gov't) - R&D: data science, platform development - G&A: leadership-heavy team (12 C-suite/SVP), legal, finance *Market expansion* - Addressable spend coverage: 20% in 2022, expanding per roadmap to 50–60% (2022) and 90% (2023) - **Scenarios (Base / Bull / Bear - which variables flex):** - **Base:** 30% activation, $18 PEPM, 4% cost reduction, 40 new clients/yr, case rates at midpoints - **Bull:** 35% activation, $22 PEPM, 6% cost reduction, 60 new clients/yr, faster service line expansion - **Bear:** 25% activation, $15 PEPM, 2% cost reduction, 20 new clients/yr, slower TPA/payor channel ramp - **Required sheets / outputs:** 1. Assumptions - all drivers with Base/Bull/Bear toggles 2. Client & Lives Build - client count, covered lives, activated members by year 3. Revenue Schedule - PEPM stream, utilization/case-rate stream, shared-savings stream, total revenue 4. P&L (Income Statement) - revenue, COGS, gross profit, OpEx (S&M, R&D, G&A), EBITDA, net income 5. Cash Flow - operating cash, burn rate, runway (critical for Series C sizing) 6. Balance Sheet (simplified) 7. KPIs Summary - covered lives, active members, clients, PEPM yield, gross margin %, NPS (reference) 8. Dashboard - charts: revenue by stream, lives/members growth, client count, gross margin bridge ## Frequently asked questions ### Is the Transcarent financial model free? Yes. The Transcarent model is a free Excel download with live formulas. ### Can I change the assumptions? Yes. The workbook is editable and its live formulas recalculate when assumptions change.