Spokane Journal of Business

Health cost analysis company forms

Tech entrepreneurs set to launch cloud-based platform to measure efficiency

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-—Staff photo by Mike McLean
Ryan Fix, left, and Jim Schlosser say Arevo's platform will help companies with 100 to 100,000 employees optimize their health care coverage.

Two experienced Spokane entrepreneurs are in countdown mode for the launch of Arevo Health, a cloud-based software startup that they hope will revolutionize corporate health care efficiency tracking.

Ryan Fix and Jim Schlosser founded the company in April and expect the software platform to go live in early to mid-2014.

Arevo's platform, which currently is in its final stage of development and is being tested by interested potential customers, will provide tools for executives of client companies to review, analyze, and adjust their health care costs, Schlosser says.

Fix, 36, is Arevo's CEO, and Schlosser, 43, is president and chief operating officer.

Fix says he began developing the concept behind Arevo—the name is short for "a revolution"—early last year while still CEO of a 200-plus employee company in Liberty Lake, where he saw a need for such an analytical tool.

Fix and Schlosser, who both have launched successful tech startups here, have been friends for eight years. They teamed up to refine the Arevo concept nearly a year ago, and they founded the company in April.

Although health care coverage is a big expense, there's a gap between employer and employee expectations of such coverage, Fix says.

"Arevo will better track what benefits employees use and what they value," he says. "It can identify cost-savings options for employers and employees."

One example is Arevo's expected capability to track pharmacy use.

"In many cases, an employee pays a set amount for prescriptions and the employer pays the rest," Fix says.

In a hypothetical scenario involving a self-insured employer, one pharmacy might charge $45 to fill a prescription, while the employee pays a flat rate of $10 per prescription, meaning the company plan pays $35, he says.

Another pharmacy, though, might charge $90 for the same prescription. Under such a scenario, the employee still pays $10, and the employer is responsible for the rest. Because the employee cost is set, there's no incentive for the employee to look for the cheapest pharmacy.

Through the Arevo platform, employers can notify their employee pool of potential cost savings, and Arevo will track pharmacy use.

The client can use the Arevo data to reward employees who actively save the company money with incentives such as gift cards, through a system in which Arevo ensures employee privacy is protected.

Fix and Schlosser estimate savings in health care spending of 1 percent to 3 percent, which they say can amount to a significant total in the face of escalating health care costs for companies with hundreds of employees.

"We're giving clarity for companies to make better-informed decisions. In some cases, they may invest more if they see good things," Schlosser says, adding that the Arevo platform will be able to monitor returns on investment for wellness programs to determine which programs result in health care savings in the long run.

The concept isn't limited to Spokane, or even Eastern Washington, because it could be applied anywhere in the country, he says.

The model works for companies ranging in size from 100 to 100,000 employees, Schlosser says, adding that Arevo Health's "sweet spot" will be companies ranging from 250 to 10,000 employees.

"Companies with 50,000 employees have the sophistication to do this in-house," he says. "Smaller companies will be able to act like larger companies to improve business efficiencies."

With aspects of the Affordable Care Act coming on line, including the Jan. 1, 2015, mandate that employers with 50 or more full-time employees provide qualified health care plans or face penalties, Fix says the timing "couldn't have been scripted better" for a company like Arevo to emerge.

Fix and Schlosser say they don't know of another company like Arevo.

"We haven't found direct competition," Fix says. "We even talked to a big insurance carrier that said, 'We don't have this solution for our own employees.'"

Arevo is based in the Ben Burr Building, at 5915 S. Regal, where it occupies 1,500 square feet of office space.

The company has one other employee, Fix's 40-year-old brother, Tacoma-based Brandon Fix, who is Arevo's chief technology officer. He led a project that outsourced the coding for the Arevo platform and data base buildup.

"Within three months, we expect to have six to eight new employees, and we'll be looking at adding office space," Schlosser says.

Fix and Schlosser funded the company initially and opened it to seed investors in August.

They decline to disclose how much has been invested in Arevo so far, but say the company has enough funds to take it through the launching stage. They project the company, which will earn revenue on a per-covered-employee basis, will be cash-flow positive by the second or third quarter of 2015.

Fix has been involved in health care and technology companies for 15 years. Most recently, he was CEO of Liberty Lake-based Family Home Care & Hospice, where he says he developed and implemented a strategy to reorganize and sell the company formerly owned by longtime Spokane-area health care executive Michael Nowling. Georgia-based Gentiva Corp. bought the home-health and hospice divisions of the company in August 2012, and Jeff Wiberg, a Family Home Care executive, bought the remaining assets of the home-care company in March.

Fix says he also helped lead Wellcore Corp., a San Jose, Calif.-based wellness and safety product developer, to a successful sale to OnStar LLC, a division of General Motors, in 2010.

Schlosser has 20 years of experience in marketing and startup companies. He co-founded Spokane-based touch screen and keyboard technology developer Pacinian and was the company's CEO from 2007 to 2012.

California-based Synaptics Inc. acquired Pacinian in August 2012.

Before starting Pacinian, Schlosser, who holds six patents, worked for Esterline Advanced Input Systems, in Coeur d'Alene, where he says he handled the company's largest customer accounts.

Fix and Schlosser say they aren't building Arevo just to sell it.

"We want to build the right company, not as a startup to exit immediately, but to grow in the Spokane marketplace," Fix says. "It's not a build-to-flip company. We're doing a lot of heavy lifting to get it through to the profitability stage."

Mike McLean
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Deputy Editor Mike McLean has worked his entire journalism career in the Inland Northwest. Mike, who also lives to reel in fish and crank up music, has worked for the Journal since 2006.

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