Over the last decade, New Jersey has grown its economy at half the pace of the nation, largely because we have generated half the number of growth companies than other states, according to McKinsey & Co. Yet, New Jersey has the talent, education, lifestyle, location and proximity to corporations and capital to become most attractive to growth companies, especially in health technology.
Large New Jersey-based business customers, who are also investors, can best fill this growth company formation gap. Given New Jersey’s innovation history in data, communications, pharma and health, and our proximity to the greatest health care providers in the world, health technology may be the best “open field” for investments in growth companies and new job creation.
This brings us to S3218/A5119, now before the New Jersey Legislature. S3218/A5119 will allow Horizon Blue Cross Blue Shield of New Jersey to change its structure to a modern nonprofit mutual company that can invest more into innovative health companies in New Jersey. As a venture capital investor in telemedicine companies, such as Felix Health, I urge voters to call and email their legislators to urge them to pass S3218/A5119.
Here are five reasons why, as a venture capital investor, I commend S3218/A5119 for the New Jersey economy:
- Blue Cross organizations have successfully adopted the nonprofit mutual fund structure in 18 states. In Florida and Texas, the resulting Blue Cross mutual corporations have generated new jobs both with Blue Cross and in the companies in which they invested.
- As an anchor company in New Jersey, Horizon currently employs 5,500 people, contributes $210 million in state taxes and serves 3.6 million of our residents. S3218/A5119 will result in an increase in jobs, tax revenues and residents served — while lowering premiums.
- Horizon’s 3.6 million customers rate it as their best health insurer. S3218/A5119 will allow Blue Cross to better deliver patient-centered products and services, expand its tech-enabled services to students, the elderly and the underserved, and expand its social determinants of health and behavioral health programs.
- At nearly $9,000 per resident per year, New Jersey has the 18th most expensive health care system.
- While 93% of tech company founders want to generate positive social impact, only 1% of venture funds focus on social impact. Horizon fills this gap.
Doctor On Demand is an example of how a growth telemedicine company can rapidly improve health care and its costs. For 1.5 million employees at Walmart, Doctor On Demand provides a primary care doctor on your phone within five minutes, any time, 24/7. For Walmart workers, getting, within five minutes, a live video conference with an MD can save hours of time, missed work and ensure better family medicine. For Walmart and its employees, Doctor On Demand can save millions in health care costs by enabling the primary care physician quickly do what they do best.
Today, Horizon is restricted in how much it can invest in health tech companies, outside of traditional commercial insurance.
Think of what it will mean when Horizon can invest in the best health tech companies. New Jersey companies will grow, hire more employees and increase their ability to develop the latest health care technologies.
This investment and innovation will also lead to tremendous economic growth. A study conducted by Econsult Solutions estimated numerous positive benefits of Horizon changing corporate structure. They include $4.16 billion in additional economic output for the state and $62 million in new state revenue. Let’s not ignore this potential.
Dear lawmakers, and fellow citizens, let’s work together to pass S3218/A5119 to enable our best health insurer, Horizon, to invest in our best health care.
Jay Bhatti is co-founder of BrandProject, a venture studio with investments in companies such as Freshly, Daily Harvest, Gainful, ChefsPlate, Petplate, and Felix Health. Bhatti was also co-chair of the Tech and Innovation transition team for Gov. Phil Murphy.