Nick Reber, Garner Health founder and CEO
Garner Health
Garner Health uses data to identify the country’s best doctors based on quality and cost, then gives its customers’ employees financial incentives to go to them—which can save 12% on healthcare costs.
Back in 2009, Nick Reber went to see a doctor at a big New York hospital, for help with persistent pain in his back. When the doctor recommended surgery in his mid-back, he underwent the procedure. But he later learned that the real problem was higher up, in the cervical spine. When that first surgery resulted in complications, he had another one—ultimately undergoing four surgeries on his back.
“I was misdiagnosed and mistreated,” he told Forbes. “I probably needed between zero and one [surgeries]. I live with a bunch of back pain and it’s a big part of my life.”
The experience was eye-opening for Reber, a data guy who worked then as co-head of research analytics at hedge fund Bridgewater Associates. So he did what any researcher does: He started reading up on healthcare policy and economics. He eventually came to believe that if he’d only found a better doctor, he could have saved years of pain and several thousands dollars in medical bills beyond what his insurance covered. He realized that if data like complication rates and hospital readmissions could find the best physicians, it should be able to reduce overall cost, too.
That’s the idea behind Garner Health, which Reber founded in 2019. Today, Garner uses deidentified data from some 320 million health insurance claims purchased from insurers, aggregators and others to figure out which doctors have the best outcomes and the lowest costs. These physicians are part of what’s essentially a network-within-a-network for Garner’s corporate clients, which pay a monthly per-employee fee. When employees of its clients choose one of these doctors for their care, they get reimbursed for their out-of-pocket costs (seeing one of Garner’s docs is not a requirement though).
“We’ve become a bit of a solution to the panic button.”
Garner says that its top doctors have 75% lower complication rates, 60% reduced hospitalization rates, and are three times more likely to follow medical guidelines than their peers. The upshot, Reber said, is an average 12% reduction in total healthcare spending for its customers.
That’s a huge deal at a time when healthcare costs have soared. Employer-sponsored health insurance has been rising at more than 6% a year, and is expected to reach an average cost above $18,500 per employee, according to Mercer’s national survey of employer-sponsored health plans. That’s creating something of a panic among CEOs and CFOs who are watching those costs eat into profits—especially at companies that have self-insured health plans, meaning they’re on the hook for healthcare costs. Meanwhile, cash-strapped employees are increasingly struggling to afford higher deductibles and copays as their bosses shift more of the rising costs onto them.
Garner’s promise to lower healthcare costs without cutting benefits has helped it gain more than 700 customers that include $12.4 billion (2024 revenue) builder Clayton Homes, $10.8 billion (2024 revenue) flooring manufacturer Mohawk Industries and nonprofit health system Mercy, which has 50 hospitals. Garner now covers more than 2.5 million members total. “We’ve become a bit of a solution to the panic button,” Reber said.
Today, Garner said that it had raised $118 million led by Kleiner Perkins at a valuation of $1.35 billion. Redpoint, Maverick Ventures and Kaiser Permanente Ventures also invested in the round, which brings its total VC funding to approximately $200 million. Garner expects its annual recurring revenue to pass $200 million in the next year. (Reber declined to say how much of the company he still owns or disclose its current revenue.)
“It’s like the Moneyball database for healthcare providers,” said Kleiner Perkins partner Josh Coyne.
In 2022, Chattanooga, Tenn.-based logistics firm Kenco rolled out Garner’s program to its 6,800 full-time U.S. employees, largely comprised of warehouse workers and truckers. Some 70% now choose Garner’s top doctors. “We’ve gotten our employees’ attention,” said Cathy Phillips, Kenco’s senior manager of benefits and wellness. Meanwhile, the company’s return on investment, even after accounting for reimbursing workers for out-of-pocket costs, has been just over 13%. “It’s saved us a significant amount of money,” she said. “It just gives us a really bright outlook on the future of our health plan.”
“It’s like the Moneyball database for healthcare providers.”
Reber, 41, developed the plan for Garner not just from his own experience but also from a three-year stint at Oscar Health starting in 2016. One of his jobs there was to sign up hospital systems, then look through the data on performance to see how Oscar could improve the networks it set up for its insurance customers. What he learned, he said, was that the single biggest way to improve patients’ outcomes and lower cost was to get people to choose the best doctors.
“I would present the data to our hospital partners and say, ‘Here’s some shocking data that a chunk of your doctors are lowering people’s life expectancy.’ They would say, ‘Cool, interesting, but unfortunately, the doctors you don’t love are our highest revenue doctors and if you reduce them from the network we will just drop out of your network entirely,” he recalled.
Reber realized he needed a different way to address the problem. He figured that if Garner could identify the best doctors and give people a financial incentive to pick them, at least some of them would make that choice, improving care and lowering costs in one shot.
Using data to choose the best doctors is a complicated business, and there are some complaints online from employees who work at companies that have rolled out Garner’s plan about the network being too restrictive. “As you expose this data, people are going to have questions and it may not align with their preconceived notions” about which doctors may be better, Reber said. He also noted that Garner’s model would continue to improve as it added additional data, including claims data from its corporate customers who can choose to share with it.
“It’s a challenging product,” Reber said, adding, “It’s a whole new payment ecosystem for how incentives should work.”
Reber has personal experience with Garner’s effectiveness. He chose one of Garner’s recommended doctors when he needed hernia surgery last year, he said. The doctor was able to perform the procedure laparoscopically, requiring far less recovery time than if he’d had open surgery. That was a better result than a colleague who got the latter operation from a different doctor at the same New York hospital, he said. “I’m obviously the biased CEO, but it makes a difference when you actually have this information,” he said.
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