Wellvana Health, a value-based care technology company, nabbed $84 million in a series B round.
The investment was co-led by Heritage Group and Valtruis with participation from Memorial Hermann Health System. The round brings Wellvana’s total funding to approximately $140 million and will be used to support Wellvana’s continued growth in existing and new markets.
“Memorial Hermann is committed to its transition to value-based care, which includes the delivery of safe, high-quality care and outcomes and exceptional experiences for all of the patients we serve,” Feby Abraham, Ph.D., executive vice president and chief strategy officer at Memorial Hermann Health System, said in a press release. “We view our investment in Wellvana as an investment in that transition and in the future of healthcare.”
“Wellvana’s model is at the core of our mission at Valtruis to accelerate the growth and adoption of value-based care,” Karey Witty, managing director at Valtruis, said in the announcement. “We are confident that Wellvana’s solution-oriented model is best positioned to continue supporting physicians’ transition to a modern value-based care system that lowers costs, expands access, improves the patient experience and enhances outcomes for all.”
Founded in 2019, Wellvana serves physicians, home health agencies, skilled nursing facilities and health systems in 22 states. It reaches more than 100,000 lives through multiple payers, Medicare Advantage and three national contracts for the 2023 ACO REACH model.
The startup claims its key differentiators are data-driven technology and high-touch human engagement. “Our model is working,” CEO Kyle Wailes said in the announcement. “Savings rates are strong for our physician partners with improved patient outcomes and reduced in-patient ER admissions across every market. Most importantly, our physicians and their patients feel heard, seen and valued, renewing trust in the American health care system.”
Wellvana offers its clients data analytics and a population health platform, in-house clinicians and care coordinators, a coding and quality assurance auditing team, partner benefits focused on social drivers of health and other tools to close care gaps.
“We try and do as much work as we can on behalf of the provider,” Wailes told Fierce Healthcare.
Wellvana assumes downside risk for partner physicians through an underwriting program, helping them focus on improving outcomes. That process, especially important for providers in rural areas or those operating on tight margins, is not taken lightly. Some clients will not immediately be ready to transition to full risk, Wailes said, and Wellvana will work with them over time to make that transition.
There’s been “incredible tailwinds” across the healthcare sector in the realm of value-based care, Wailes noted. In 2021, for instance, the Centers for Medicare & Medicaid Services announced its intent to tie all Medicare and most Medicaid payments to value by 2030. This model aligns all stakeholders around the right outcomes and reduces costs, Wailes noted.
“The industry as a whole is at a very exciting time to enable the transition of fee-for-service to value-based care,” Wailes said. “It’s enabling physicians to get back to what healthcare and medicine should be.”
The latest announcement comes amid a wave of deals in the VBC space. In a recent report on private equity deals in healthcare, PitchBook noted the first wave of VBC enablers like Privia and Aledade proved that guiding FFS primary care practices into risk contracts can materially improve outcomes, reduce variation and lower the total cost of care. A newer wave of VC- or PE-backed players has emerged that includes Enlace Health, Pearl, UpStream and Rise Health, which will likely be candidates for PE buyouts as they mature, per PitchBook.