American health care is in critical condition. According to an analysis by the Peter G. Peterson Foundation, in 2019, the United States’s per capita health-care spending was nearly double the average of other wealthy countries, without that translating to better outcomes for patients. In fact, the U.S. ranked worse than most developed nations in key health metrics like life expectancy at birth and infant mortality—and that was before the COVID-19 pandemic, during which the U.S. has seen the most confirmed cases and deaths in the world.
Now, a growing segment of health-care startups are looking beyond Band-Aid solutions to heal one of this country’s biggest ailments: They’re embracing a preventative, value-based model of health care that meets patients where they are (often literally, via telehealth services and house calls) in order to provide even more Americans with better, more affordable care. And in 2022, these health-care startups will put their (venture-capital-raised) money where their mouths are, using their recent investments to reach more people, particularly historically underserved groups, including women, lower-income folks, and the elderly.
The idea of value-based health care began percolating in the 1960s as an alternative to “volume-based” or “fee for service” health care. As the Cleveland Clinic puts it: “With the concept of value-based care, doctors and hospitals get paid based on outcomes, not on numbers of procedures done, patients seen, or how much they are charged.” The idea is that when health-care providers don’t get to bill for each test run or exam given, they’re incentivized to prioritize holistic, preventative care and long-term health for their patients.
The idea is that when health-care providers don’t get to bill for each test run or exam given, they’re incentivized to prioritize holistic, preventative care and long-term health for their patients.
This model of care gained steam in the aughts—beginning in 2007, with the founding of One Medical, a membership-based health-care platform (a membership costs $199 per year but services are covered by your insurance) that put a user-friendly digital interface at the heart of its offerings (you could schedule doctor’s appointments online—what a concept!). Cut forward 13 years, and the circumstances created by the COVID-19 pandemic laid the foundation for its accelerated growth. “As of November 2021, One Medical has 715,000 members, a 40 percent increase from the prior year,” says Jennifer Vargas, chief strategy officer at One Medical. “We have expanded the markets where we have offices from eight at the end of 2018, to 28 markets planned by the end of 2021.” Next year, One Medical has announced new offices in Dallas and Miami.
Why are new users flocking to health-care platforms like One Medical now? “I think that the health-care system, broadly, is suffering from a crisis of trust right now,” says Neel Shah, MD, chief medical officer at Maven (founded in 2014), a value-based medical clinic and platform that centers women and families and achieved “unicorn” status (a valuation of over $1 billion) in 2021. “We see many manifestations of that, including hesitancy around getting vaccinated against a deadly pandemic. One of the things that's really undermined the ability of the health-care system to be trustworthy is that we pay for a lot of things that don't make us healthy.” Health care is less affordable in 2021 than it has been for the average American in a half century, Dr. Shah says, and “the American people are fed up...with a system that [doles out] these giant bills but doesn't always reliably show up for them in the way that they need them to.” Maven is free to join if your employer is enrolled; otherwise, members pay a fee per virtual visit (telehealth sessions with a physician are $40).
Meanwhile, shelter-in-place orders and overrun hospitals pushed patients and providers alike to adopt telehealth models of care en masse, something that value-based companies like One Medical, Maven, and many others had built into their DNA from the beginning because virtual services eliminate one of the major barriers to care for many: geography. “From the patient side, I think the rapidness with which they adapted to using technology [for health care] was pretty astonishing,” says Sachin Nagrani, MD, medical director at Heal, a primary-care practice for adults and seniors founded in 2014 that takes most major insurance plans and treats patients with telehealth appointments and house calls. “At first, this was out of necessity. But now, that learning curve has taken place, so I think that people will move towards a more blended model, where they're using technology when they need to and getting care in-person when they need to…to access care on their terms.”$15b
The numbers back up Dr. Nagrani’s prediction that these hybrid forms of primary care are the future. In the first half of 2021 alone, venture investments in digital health topped $15 billion, which is more than was raised in all of 2020 and is the most raised in a single year since 2010, Raj Prabhu, CEO of Mercom Capital Group, said in a funding report. (Further evidence of the opportunity companies see in the telehealth space: Amazon launched its own platform, Amazon Care, for Amazon employees in Seattle in 2019, and plans to expand its reach to non-Amazon employers in 20 cities in 2022.)
"Equity in health care is really, really important, because we know the health-care system doesn’t treat everyone the same—and not everyone is the same." Sachin Nagrani, MD, medical director of Heal
This influx of dollars will support a rapidly growing user base in 2022 (anecdotally, Dr. Shah says, “All the projections that I'm seeing is that [Maven is] not just growing, but we're growing exponentially”), one that increasingly includes populations that have been left behind by the U.S.’s health-care system. “I am personally most excited in this space by how different models of care delivery focus on long neglected areas of health care,” says Dr. Nagrani. “Equity in health care is really, really important, because we know the health-care system doesn’t treat everyone the same—and not everyone is the same. I’m excited to see how new care models…tailor to the individual so that we’re getting better care delivery for groups of people who have historically not received as good care.”
To put a finer point on it: “People that are not served well by our health system include those who have more limited means. They also include people who have darker skin and they also include, really, anybody with a uterus. Then, people that have all three of those things are the most vulnerable,” says Dr. Shah.
Platforms for people with uteruses are well-positioned to welcome more members next year: In April, Tia, a startup dedicated to bringing personalized health care to women that’s currently operating virtually and has in-person clinics in four cities, announced a partnership with CommonSpirit Health, a national health-system nonprofit with locations in 21 states. “CommonSpirit was the ideal partner to help us scale our proven model nationally,” Tia co-founder and CEO Carolyn Witte said of the partnership in a press release. And Maven, which raised $110 million in series D funding in August (with Oprah being a contributor), says that membership in its employer- and payer-sponsored programs has grown 400 percent since February 2020—and this growth isn’t expected to slow down. In 2022, Dr. Shah says Maven is increasingly working with health plans to lower costs for users. “And we’re increasingly working to serve the Medicaid population,” he says.
Another major player bringing value-based care to lower-income communities is Cityblock Health, a startup health-care provider that exclusively serves Medicaid- and dual-eligible (meaning Medicaid and Medicare) folks. In September, Cityblock announced that it raised an incredible $400 million in late-stage funding, bringing its valuation to over $5.7 billion. These funds will be put to use in 2022 to expand Cityblock’s reach beyond the five states it’s currently active in, making headway toward its goal of serving 10 million members by 2030.
Heal and Cityblock aren’t alone in their aim of bringing convenient, affordable care to America’s senior population. In August, Heal founders Nick Desai and Renee Dua (who departed Heal early in 2021) raised $3.8 million in seed funding for a new senior-focused health startup called HeyRenee, which is planning a formal launch for 2022. Meanwhile, One Medical acquired Iora Health, a “human-centered, value-based primary care organization” serving Medicare-eligible seniors in 28 locations, in September. And hot on the heels of this acquisition, One Medical introduced Impact, a chronic care program designed to bring 24/7 virtual support and convenient in-person care for chronic illnesses to One Medical’s newly expanded footprint.
“We're living in a moment in 2021 [in which] a lot of us feel like we're sitting on quicksand, where so many things about our society are changing, from our social norms, to the way that we engage with each other, to the way that we engage with institutions. There's no doubt in my mind that health care is part of this shift,” says Dr. Shah. “The way you make people safe is by attending to their lived and embodied experience. To do that, you have to meet them where they are, which is not what the current health-care system is doing but is what a lot of the digital health innovation in primary care...is starting to do.”
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