Yuvo Health co-founder Cesar Herrera is on a mission to make the business case for supporting underserved populations who get care at federally qualified health centers. The case is being made with a new pot of $20.2 million.
Completing its series A funding round, Herrera told Fierce Healthcare, proves the success of the health tech company's business model bringing value-based care to community health centers. The New York City-based company helps FQHCs and community health centers transition to value-based care contracts by assuming the risk on behalf of the providers and easing the administrative burden of operations and infrastructure. Once done, health centers can use the savings to expand services.
“I've gotten a lot of questions of why we’re not a not-for-profit,” Herrera said. “I've gotten a lot of perceptions that there's no money to be had. 'Their margins are too tight.' 'There's not a big enough business there.' Even though we're talking about a $33 billion industry. The assumption is that practices that have been used to support diabetes care, Medicare couldn't do the same thing for Medicaid, or that value-based care wouldn’t be successful in Medicaid. And I'm here to prove that wrong as well.”
Yuvo was launched in New York City in early 2021 by a fully BIPOC team that saw firsthand the difference quality care makes in underserved communities. Black New Yorkers have the highest death rate in the city, 25% higher than the white death rate in the city’s poorest neighborhoods.
FQHCs currently number around 1,400, serving 30 million people around the country. These health centers provide primary healthcare to underserved populations, caring for one in three people living in poverty and one in five rural inhabitants.
Centers are mandated by the federal government to provide care and wraparound services regardless of a patient’s ability to pay. For those populations unable to access a health center but needing care, Herrera said, patients either forgo care or seek care at emergency rooms. “No one should ever go to the ER for primary care,” he said.
While the rest of the U.S. healthcare system has been swept up in the value-based care revolution, FQHCs have been left behind. Federal law requires alternative payment programs to reimburse what centers receive from government payers, a requirement that can conflict with risk-based models.
“Our mission is to increase access to primary care by supporting FQHCs, particularly in giving them access to meaningful revenue that comes through value-based care,” Herrera said. “The reason why we're doing this is because FQHCs need our support, but also because FQHCs literally cannot participate in value-based care. Unlike any other provider, FQHCs are prohibited, via regulation, from taking on downside risks.”
Meaning? Within some systems, providers must return money if they fall short of cost or utilization metrics in total capitation models. That's a model that health centers may not adopt on their own, according to Herrera. This risk, along with the upfront costs of moving away from a fee-for-service model, keeps FQHC strapped financially and dependent on grants.
For example, if a health center is serving a rural population that loses its nearest maternal care facility, bringing metaphorical water to that maternal healthcare desert is no easy feat. Perhaps a new clinic must be built, a lactation specialist hired, patient transportation coordinated and all must be paid for with grants that leave FQHCs in feast or famine cycles.
“FQHCs are already doing the work of value-based care, they're just not getting paid for it,” Herrera said. “They're addressing social drivers of health, they're providing social work services, case management, they're doing all of these things because they know that they're mission-driven to keep their communities healthy, even though they don't get paid for that.”
By taking on the risk itself, Yuvo claims it is able to help health centers create consistent revenue streams that allow for continued growth and account for the work they're already doing. With Yuvo Health addressing their unique needs, health centers can leverage sustainable payment systems, scalable infrastructure and partnerships for a meaningful seat at the table within the value-based care ecosystem. The company currently serves health centers and IPAs in the Northeast and Midwest, with plans to expand to more markets soon.
Yuvo’s $7.3 million seed round, which closed in January 2022, helped the startup begin its initial program developing the technology to make total capitation models viable for FQHCs and expanding leadership in its product, engineering and population health strategy areas.
Herrera said the newest round of funding will help further scale infrastructure by expanding from New York to Ohio while accepting full-risk arrangements on behalf of health center partners. Yuvo also announced that it has doubled the number of FQHC partners to a total of eight serving over 150,000 patients, including Long Island Select Healthcare, Metro Community Health Centers, Joseph P. Addabbo Family Health Center and Advantage Care Health Centers.
The startup's series A funding was led by Mastry Ventures, with participation from previous investors including AlleyCorp, AV8 Ventures and New York Ventures, along with new investors HLM Venture Partners, Route 66 Ventures, VamosVentures and Social Innovation Fund. The latest round brings Yuvo’s total funding to $27.5 million.