Glen Tullman’s strong dislike for healthcare industry players such as payers, care navigators, and benefits consultants has been well-documented over the years. In 2020, Tullman founded Transcarent with the belief that efficient software can eliminate middlemen friction, connecting providers and consumers more effectively to reduce employer costs and enhance patient experiences. Despite repeatedly stating that Transcarent is not a navigator and comparing navigators to outdated travel agents, Tullman surprised many in January by announcing that Transcarent was acquiring care navigation company Accolade for $621 million and taking it private.
This article will explore how Transcarent has performed in the market since its inception and what led to the unexpected merger between Denver-based Transcarent and Seattle-based Accolade. Although Tullman declined to be interviewed for this article and did not provide a Transcarent customer for an interview, the acquisition raised eyebrows given Tullman’s previous criticisms of care navigation. In a 2021 panel discussion with health tech disruptor Jonathan Bush, Tullman expressed skepticism about care navigators, emphasizing the need to simplify healthcare processes rather than add more layers to them.
Accolade CEO Rajeev Singh disagreed with Tullman’s views, advocating for navigation teams powered by primary care physicians and mental health specialists. Singh criticized Transcarent’s pay-per-use model, arguing that employers should cover the costs for the entire population. As Accolade faced challenges in 2024, including losing major clients and becoming a penny stock, the company’s struggles led to it being put up for sale by Morgan Stanley. Tullman stepped in to acquire the company privately, a move that many see as a quick sale.
Why would someone who openly criticized navigation as a legitimate healthcare category purchase the well-known, yet struggling, navigation company? Why spend any amount, let alone $621 million, on a company that doesn’t align with your healthcare disruption and patient empowerment vision?
There are two possible explanations: either the Transcarent model failed completely, or powerful benefit brokers, consultants, HR professionals, and health plan intermediaries shut out Transcarent due to negative statements made against them. This forced Tullman to seek refuge with care navigator Accolade, ultimately becoming a victim of the system he aimed to disrupt.
Interviews with former Transcarent and Livongo employees, healthcare executives, and competitors suggest that Transcarent fell short of its ambitious goals, making only a fraction of its projected sales target for new business. Despite raising significant funds and boasting a high valuation, the company struggled to achieve its revenue targets.
To achieve success, Transcarent needs to prove its worth in the marketplace, but its products have not been as successful as hoped. Despite offering a range of services, the company struggled to attract new clients organically. The three largest clients, Allstate, Apple, and Boeing, were either inherited or influenced by Tullman and his connections.
While Tullman claimed to have added a significant number of members in January alone, the reality may be different. Transcarent’s exclusion from key Requests for Proposals (RFPs) indicates its poor performance in the market. Despite boasting a list of high-profile customers, the company faced challenges in securing new business opportunities through traditional channels. Even when included, they had few victories in RFPs. A senior leader at a rival company mentioned that out of the RFPs they were part of, they only won 2-3 with revenue potential less than $1 million. They were excluded from RFPs for various reasons, such as bypassing HR and benefits professionals to sell directly to senior executives, lack of focus on creating best-in-class products, absence of advocacy resources for consumers, and limited utilization management.
Benefit brokers like Aon, Mercer, and Willis Towers Watson (WTW) had animosity towards Transcarent, with WTW being a major blocker for them nationally. The exclusion from RFPs was confirmed by former employees, although they eventually managed to be included in all relevant RFPs with major broker-consultants. However, they faced disqualification due to not meeting certain vendor requirements, leading to concerns about the value of navigation.
Despite criticisms and challenges, Transcarent continued to pursue new business by offering performance guarantees to prospective employer clients. Salespeople sought permission to use clients’ names and logos in external communications in exchange for ROI guarantees. Tullman’s strategy of selling directly to executives was seen as predatory by some, with concerns about the lack of accreditation and standards in their care management approach. “He invests a significant amount of money in political connections and CEO clubs to gain access to board members who may not have much knowledge about benefits. He is known for being charismatic and an excellent marketer.
According to a former associate, the lack of a compelling business model is why Tullman avoids dealing with benefit professionals such as Mercer or Willis, who employers typically use to vet new technologies and ask important questions that could affect decision-making.
While Tullman has had success taking companies public and making significant investments through 7wire Ventures, some critics question his tactics. The downfall of Livongo after its acquisition by Teladoc has raised concerns among associates and competitors. Some argue that Tullman has a pattern of acquiring distressed assets and combining them with technology, resulting in questionable outcomes.
Critics, including healthtech executive Jonathan Bush, compare Livongo’s business model to that of Transcarent, suggesting that Tullman has a history of rebranding and repackaging assets rather than creating truly innovative products. The failure of Livongo post-acquisition has led to speculation about Tullman’s approach to business.
Despite Tullman’s success in sales and entrepreneurship, some believe that the Livongo-Teladoc deal was overvalued and ultimately led to disappointing results. The blame has been placed on both Tullman and Teladoc’s former CEO, Jason Gorevic, for the outcome of the acquisition.
As Transcarent prepares for a potential merger with Accolade, concerns about Tullman’s business practices and track record have been raised by competitors and industry insiders. The complex nature of working with employers and the challenges of beating established competitors in the industry present obstacles for companies like Transcarent.
The contrasting histories of companies like Quantum Health, Included Health, and Accolade highlight the difficulties faced by newer entrants like Transcarent. The potential merger with Accolade could have significant implications for the industry, with both positive and negative outcomes being anticipated.” Transcarent’s lack of success in the marketplace is not surprising. What is surprising is Tullman’s sudden change in perspective on navigation. It appears that Transcarent needed Accolade so much that Tullman reached out to Accolade’s CEO, Singh, expressing interest in acquiring the company. It seems that Transcarent aimed to buy Accolade to cross-sell its products to Accolade’s client base. However, Accolade’s board initially rejected Transcarent’s bid due to concerns about their financial capacity to complete the deal. Eventually, after negotiations, the deal was settled at $7.03 per share. The success of this merger remains uncertain, with mixed opinions from industry experts. Some see it as a positive move for Accolade, while others doubt the ability of the combined company to succeed. Ultimately, the deal is pending shareholder approval and may lead to significant expansion in covered lives and clients for the combined entity. Aunque comiences con una idea, a veces no es realmente la correcta.”
Citando al economista John Maynard Keynes, agregó, “Cuando los hechos cambian, cambio de opinión. ¿Qué haces tú, señor?”
Parece que Tullman hizo lo mismo – no pudo vencer a las compañías de navegación en su juego lo suficientemente rápido, así que cambió de opinión y se unió a ellas.