Why We Invested in Merit Medicine: Changing the Healthcare Cost Landscape


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We are excited to share that LiveOak Ventures led the $2M Seed in Merit Medicine. This investment is fueled by our conviction that Merit is transforming how self-funded employers manage their healthcare costs in the rapidly evolving healthcare industry.

The landscape of employer-funded healthcare has witnessed a quiet yet monumental shift, with a significant portion of the workforce now reliant on self-funded health plans. In these plans, employers bear the direct financial burden for their employees’ healthcare costs. As a consequence, Stop Loss (“SL”) insurance becomes not just a prudent risk mitigation tool but an indispensable one — albeit with financial implications that can be staggering. Self-funded employers, especially those in the mid-market with a workforce strength of under 15,000, are finding themselves in the vise of ballooning SL premiums, driven by growth in high-cost specialty medicines and aggressive pricing from healthcare providers. These spiraling costs place immense pressure on employers, creating an urgent need for efficient and innovative cost management solutions.

The current market offerings for risk assessment of employee health are underwhelming at best. They operate at two extremes: either overly simplistic analyses or prohibitively costly consulting services. This is where technology can bridge the gap, and Merit Medicine stands ready to lead such a transition.

Merit provides AI-powered predictive model that deconstructs and analyzes third-party claims and employee data. It identifies crucial health condition trends and accurately forecasts potential high-cost drug utilization. This intelligence enables employers not only to anticipate health risks but also to determine appropriate SL coverage levels, which could translate to significant cost savings and return on investment.

Driving this transformation is the Merit Medicine team, which brings a unique blend of expertise in drug pricing, healthcare analytics, and actuarial modeling. Their domain experience — including stints at Genentech, Aetion, Morgan Health,  and The Advisory Board — provides the team with an unmatched perspective on tackling the pressing needs of self-funded healthcare.

We couldn’t be more excited to support Merit Medicine as they provide clarity and cost visibility into a sector previously marked by economic uncertainty and complexity. Merit Medicine is ready to redefine the playbook for employer health coverage, empowering self-funded employers to harness cost-effective and pragmatic healthcare strategies.