Carrum Health has recently attracted nationwide attention for its approach to specialty care for large businesses, generating headlines late last year for expanding its substance use treatment offerings from opioid and alcohol use to a wide range of other drugs, including cannabis, cocaine and methamphetamine.
The company has built a name for itself with its “centers of excellence” model, which offers self-insured employers access to high-quality medical specialists in fields such as musculoskeletal, cardiology and oncology at a lower cost.
Centers of excellence are groups of doctors and medical facilities that Carrum, through its own research, deems best of class, negotiating discounts on behalf of employers.
Distinct from primary care, often called family, internal or pediatric medicine, specialties have been shown to consume a larger share of the nation’s health spending. One study estimated that 16.5% of all health care dollars went toward specialty care compared to 5.4% for primary care.
Finding ways to reduce the cost of specialty care, then, has long been seen as the key way to reduce the overall runaway cost of health care. Health management organizations, which require primary care doctors to address symptoms before referring patients to specialists, has been the main way that American medicine has tried to reduce specialty costs. But Carrum takes a different approach, negotiating high-quality care at a lower price.
It is an approach that is growing as businesses grapple with ever-higher health care costs. In October, Carrum announced that it covered 6.7 million patients in 2025, adding 3.6 million, and doubling its reach in a single year.
Though it is headquartered in San Francisco, Carrum has a strong San Diego connection. Its co-founder and chief executive, Sachin “Sach” Jain, moved here with his family in 2023.
Jain earned an MBA from the University of Chicago Booth School of Business and a bachelor’s degree in computer science from the Indian Institute of Technology in Delhi.
While the company has offices in the Bay Area and Chicago, most of its workforce is remote. Jain agreed to discuss Carrum during a recent company working retreat at the U.S. Grant Hotel in downtown San Diego.
Q: Carrum Health is based in San Francisco. How did you end up in San Diego?
A: Before San Diego, I was in the Bay Area for a decade, and that’s where we launched Carrum. Two and a half years ago, with the remote working environment, it just created an opportunity for me to live somewhere else, and I picked San Diego.
Q: So you just decided to move here because it seemed nice?
A: San Diego actually has a very special place in Carrum history. Today, we work with what we call centers of excellence providers across the country, but you need to start somewhere, right? Our very first center of excellence provider was Scripps Health. I got an introduction to the Scripps CEO, Chris VanGorder, and he was kind enough to pass along an introduction to the Scripps executive team. I got to meet some very good people who wanted to do something different in health care, and they kind of saw something in the dream we were sharing, and they raised their hands and said, “yeah, we will work with you guys.”
Q: So your first introduction to San Diego was coming down from San Francisco on work trips?
A: For the first couple of years, we would fly down here, I was living in the Bay Area at the time, and we would come in, you know, every few months to discuss what was working and what was not working, what we needed to change. Every time I’d come down here, I’m like, my heart rate goes down. It was something about the weather and the people, and so I kind of always had that in the back of my mind.
Q: Your training is in computer science. How did you end up founding a company that specializes in specialty medical care?
A: In 2009, after I finished my MBA, I took a job in the hospital revenue cycle space. They are hired by doctors to chase patients and maximize their reimbursement. Not growing up in the U.S., I was just shocked at the level of abuse, the level of just, you know, singlemindedness on how to maximize the reimbursement as opposed to thinking about how to make sure a patient has a good outcome. Today, and even 17 years ago when I was doing that job, patients have no idea who the good doctors are, whether they can trust a doctor, and, if they’re saying you need a procedure, whether you actually need that procedure. You think you have nice insurance, but after the procedure, you get a bill for the facility and a bill for the anesthesiologist and a bill for the surgeon and a bill for another surgeon you never met. When I saw how it worked, I was like, “this is just mind-bogglingly bad.” I’ve come to the U.S., the best-in-class economy, and found that healthcare here is surprisingly inefficient.
Q: How does Carrum Health try to fix that central inefficiency you observed working in health care revenue wrangling?
A: We decided that to bring the cost down in a sustainable fashion, we needed to start with quality. We needed to find the doctors who only do a procedure when it’s necessary, and when they do the procedure, the outcomes are best in class.
Q: How are you able to identify these doctors?
A: We sift through terabytes of data, both clinical and claims. We start with public data from Medicare, etc … and we look for the signals of providers who are doing good quality work. Once we find those providers, we go have a conversation with them, and we ask them if they want to participate in our model. If they say yes, we say, “OK, now you need to give us deeper data, clinical and everything else, on 50 different metrics and those vary based on which procedure we’re talking about.”
Q: Obviously, they’re not sharing personally-identifiable information, are they?
A: Exactly. The data is anonymized, but we analyze it, and we do a lot of AI work, to make a determination, you know, among these 50 surgeons, these 10 meet our quality standards. When we do a site visit, we interview those surgeons.
Q: Doesn’t that create some friction with doctors who you don’t select?
A: In the early days, it was a challenging discussion, but where we are today, there are more providers who want to work with us than we want to put on the platform.
Q: How does this arrangement work financially for those who do participate?
A: The top-tier doctors and health systems who work with us are willing to work at risk, meaning that if anything goes wrong with a procedure, they have to cover that cost free of charge. It provides an incentive to make sure the procedure goes correctly the first time, or they will lose money. And we also ask them to give us a price at which our employers are going to realize significant savings compared to what they would pay; it’s usually about half.
Q: Why would doctors, especially those who are determined to get the best results, agree to take less?
A: We tell them, “if you work with us in this market, you will be our partner for these procedures, and you will have an opportunity to win market share for these procedures from all other health systems in this market.” The other big factor is that they never have to worry about getting paid. With some insurance providers, you know, one procedure can generate like 30 bills and it can take 180 days, if not longer in some cases, before all of the bills are settled. We provide payment right after discharge.
Q: Carrum has built centers of excellence across nearly all medical specialties, and treatment of substance use disorders is the company’s most recent foray. There was a time when drug or alcohol addiction was grounds for dismissal. Why are companies now more interested in covering this type of coverage?
A: The reality is that roughly one out of six Americans has a substance use disorder. Employers cannot afford to just leave such a large part of their workforce by the side of the road. But treatment has been difficult. Employees, due to stigma, often do not want to be treated in the communities where they live; they want to go somewhere else. In the fee-for-service world, it’s rinse and repeat for providers. A patient can become sober, but the relapse rate is very high. We did what we do to find quality providers and we went to them and said, instead of paying you per visit, we’ll just pay for the whole episode, but if the patient relapses, we will penalize you for that.
Q: You grew up and earned your undergraduate degree in India. How has your upbringing influenced your view of health care in America?
A: India has a cash pay system where the person who is delivering the care and the person who is going to pay for it directly interact with each other. There is no middleman, no insurance company. You realize that the layers of middlemen between the consumers of health care and the providers of health care are just so many here in America that it’s difficult for a patient to know who is on their side.