The in-home companionship company Papa went from a scrappy startup to a nationally recognized brand partnering with some of the largest payers in the country in a very short period of time.
But no startup’s journey is completely smooth, as just about any entrepreneur will tell you. And in July, the company was forced to lay off 15% of its workforce.
“I don’t like the idea of thinking about whether I would have done something differently,” Parker told Home Health Care News. “I think it’s all lessons learned.”
Moving forward with those lessons learned, Parker is still confident and encouraged by the company’s direction.
In the latest episode of Disrupt, HHCN sat down with him to talk about the startup’s early success, how its value proposition has changed over time to payers and seniors, how the company is using data to evolve and much more.
HHCN: How did Papa ultimately become a business idea and when did you think this could actually work on a larger scale?
Parker: I tested it with my grandfather in a very manual way, and tested it with other people like my friends’ grandparents and people that I met in my neighborhood. This was about eight months before I decided to turn it into a real business.
In May of 2017 I was working at a telehealth company called MDLIVE. I was part of the founding team, so I had learned a lot about health tech and selling to insurance. At the time I thought, “I have this cool thing — Papa — that has been a fun little idea but I really recognize that the 10 people that use it absolutely loved it.”
I read an article at the time that said if you could get 100 people that absolutely love your product versus a million that don’t really care that much, but still look at it, it’s a much more exciting business. For me, that was enough spark. So I left MDLIVE to start Papa full time, met my co-founder Alfredo Vaamonde who runs operations at Papa today, and in January 2018 we launched as a consumer service in the south Florida area and then quickly started working with health plans about 10 months later in October.
You mentioned the companionship piece and how those regulations change. Can you explain to our readers what the business model is for Papa at this point?
Papa generally charges a capitation to our health plan partners. We work with over 100 managed care organizations across the United States. We’re available in all 50 states, including Puerto Rico — which we are opening up in January. Our members pay us per member, per month, depending on many different factors, but effectively enough to cover the cost of a Papa Pal and other ancillary services and technologies that we bring to bear.
Did you ever imagine that you’d be in 50 states and partner with that many plans in such a short period of time?
I was reflecting on that earlier. I don’t know if I’ve ever thought about what’s going to happen five years out. I always had a vision of a new kind of care built on human connection, a world where no one has to go at it alone, and loneliness was always something that I thought about. I thought it could be used in all 50 states, of course, I don’t know that I expected it to expand this rapidly.
By partnering with health plans, having demand in areas, it allowed us to expand. We have Pals that can support a member in pretty much every county in the United States and I believe we may be the only marketplace that can do that: send a human being into the home within a short period of time to support older people.
I don’t know that I expected it to happen that fast. I’m very proud of it. But we’re just getting started.
Have you noticed that health plans’ attitude has changed when it comes to this sort of service? Are they more willing to engage now than maybe they were early on in 2018?
I do think in general health plans are thinking about more flexible benefits to be able to support their members in unique ways. I think health plans generally have gotten good at managing medical loss ratio and providing clinical services.
But when 80% of health outcomes are driven by social drivers of health, depending on how you’re looking at it, it’s just obvious that you need to think outside of that small window, which is mostly clinical.
I would say yes, health plans are more adaptable to benefits like Papa or even benefits that are different. Health plans are more competitive than ever. Medicare Advantage is growing considerably year over year. You have to think about unique ways to support members: one, to keep them retained and engaged, two to lower total cost of care and three to improve quality scores, all of which Papa does.
I think we have this configurable platform and configurable people, which are non-clinical. It’s allowed us to be very successful so far in growing through the health plans and we’re just getting started here.
Obviously, health plans love data and they love partners who show them that it’s actually working for the member. When did you start really capturing that data that could show the plans that this is helping outcomes, it is helping member retention and things like that?
We’ve been doing it the whole time, but as you know, and the readers know, data takes time. Especially in health plans. Papa has been around for about four and a half years, we’ve been working with health plans for over three years and we’re starting to get really exciting data.
A few data points to highlight: 69% reported a significant reduction of loneliness up using Papa, 39% reported no longer being lonely at all, which is huge because loneliness has a negative effect on your life. These are generally social issues. Loneliness is linked to an increased risk of heart disease, stroke, diabetes, depression and dementia, just typical things that could happen to individuals but they’re driven faster and more beyond where it would be due to the loneliness and social issues that these members have.
We do have some very exciting research forthcoming that shows a direct, really positive impact on cost savings as it relates to total cost reduction, ED reduction, as well as improvement in readmission.
When COVID-19 pandemic started, I think that was around the time that Papa was shifting its model. Can you explain how the model shifted or how you took the company in a slightly different direction at that point?
Papa was primarily in-person visits. During COVID, we became pretty much 100% virtual visits. We would do phone calls or video interactions with members during this time, and they were willing to learn new technologies more than ever.
What I find, and what Papa really believes in as a company, is that these are not individuals that can’t use technology, it’s just a matter of caring for them, sitting with them and spending time with them.
We did mostly virtual and now it’s really become part of our business. We do in-person visits, we do virtual visits, we provide what we call assistance from a distance where we will literally go and pick up medicine for you. We’ll pick up food for you and take it to your house. We’re there to be a companion and that falls into a lot of nuanced needs. To be able to support someone while you’re with them or while you’re not with them is a very critical component and it’s important to have both.
Is there any emphasis on maintaining a certain amount of in-person visits?
In-person is core to our business, that’s what we do. About 85% of our visits are done in person, virtual is more like ancillary support for what’s going on in an in-person visit. We also do assessments virtually to make sure people are improving, their scores are getting better, they’re having a good experience with Papa with their health plan and we can customize those depending on the program.
Virtual is a component of what we do, but it is not the number one thing we do. In-person visits will always be top of the priority list.
What drew you to the idea of home-based care in the first place? Obviously, you have the personal experience, but was there something in doing your research prior to launching Papa that drew you to the aging-in-place marketplace?
The personal experience obviously was a big one. The second thing was my experience at MDLIVE. I always had this dream that MDLIVE would be the Salesforce of telehealth. I love MDLIVE and it’s been a big part of my life, but back then technology was different. There was no FaceTime, no Zoom, we had to build everything ourselves, which made it much more complex.
I did think there was an opportunity to combine in-person clinical services and virtual clinical services. We built this connected care model there where we partnered with health systems that allowed us to provide in-person and we did virtual. I really love that concept. When I came up with the idea of supporting people virtually, in-person and partnering in a local community type of way, I saw this need with my grandpa and realized we could actually create a configurable system that could support varying needs.
We really allow health plans to be proactive. Almost everything in health care is reactive. Frankly, we’re trying to move it up the ladder and down the path of being much more proactive and helping people before they’re sick. Combining the personal experience, what I learned at MDLIVE and realizing that there’s a shortage of care across America, I found that we need to enable a new kind of care.
Obviously, there’s been more money coming into the space, but at the same time there’s a lot of economic uncertainty recently for a variety of reasons. I’m sure that contributed to Papa unfortunately having to lay off some staff last month. What contributed to that decision and how did you feel about that as a founder?
First and foremost, it sucked. I’ve never wanted to do that. Papa has been on a very positive trajectory. We’re a companionship platform. And we are also companions to each other. I make it a point to have a personal relationship to the extent I can with pretty much everyone at Papa. We’re a very open culture, we’re a very transparent culture, so it was very tough.
It was a decision that we had to make due to some of the comments you made about the economic changes. Our business continues to be very strong. Our health plans continue to really be excited about it, Pals continue to be excited about it and of course our members are as well, but sadly we had to make a reduction.
We did our best and I really feel proud about how we handled it. The people that left were cared for in a very positive way. So yes, it was tough, but the circumstances were that it had to be done in order to extend our runway to be able to support our health plans and our members. Relatively speaking, I’m happy with how it went down. I stay in touch with a lot of the people that were laid off, so they seem pretty OK as well.
Would you have done anything differently or is it something where it’s almost solely external and these things happen to businesses? Especially in economic climates like this one?
I don’t like the idea of thinking about whether I would have done something differently just in general. I think it’s all lessons learned. This is my first time running a company. We got big really fast. I’m learning myself, which I think has been helpful. So I don’t know that I would have done anything differently. Obviously, I wouldn’t have wanted to lay off people. But I had to.
What do you think has been the overall impact of Papa since it was launched?
I do feel we’ve changed the industry. We did create a companionship concept. We are category creators and leaders and it’s something we don’t talk about in that way too much because we’re trying to be humble and focus on helping older people, families, enrich Pals and, of course, our own team members.
I’m proud of the brand that we built. My grandpa would be proud of the brand we built. He was an entrepreneur as well, my father is an entrepreneur, so it runs my family I guess.
One exciting thing for me is the influence I feel Papa has had on other startups. I don’t think the kind of elder tech-space, as our friend Alexis Ohanian would call it, historically was as attractive to the venture community, as attractive to Silicon Valley. I do think Papa helped to move the needle on that. I’m hearing students in college at some of the top schools in the world are using Papa as their thesis paper and during projects, and that’s just such an honor.