Google-backed Aledade, the startup company that is working to reshape primary care, landed a $64 million series C funding round.
OMERS Growth Equity led the round which included strategic investors Echo Health Ventures and the California Medical Association, and returning investors Meritech Capital and GV (formerly Google Ventures).
Aledade, based in Bethesda, Maryland, partners with independent primary care practices, providing tools to build and lead accountable care organizations (ACOs) that participate in a variety of value-based care arrangements. The company partners with more than 550 independent practices and 7,300 providers across 27 states.
The company launched six years ago and has raised $130.9 million to date, according to Crunchbase.
Aledade has seen significant continued growth of its nationwide network of physician-led ACOs. The startup reported 60% annual growth in revenue, as well as nearly 50% annual growth in its patient base and total health care spending under management.
The company's ACOs care for more than 840,000 patients and manage more than $7.5 billion in health care spending through 38 Medicare and 42 other value-based contracts.
Aledade plans to use the funding to continue growing its existing and new ACOs as well as its value-based contracts with Medicare, Medicare Advantage, Medicaid, and leading commercial health plans.
"We're going to keep the turning the dial on the things that drive our success—more practices, more commercial contracts, more savings, and more risk," Farzad Mostashari, M.D., CEO and co-founder of Aledade, told FierceHealthcare.
The company partnered with the California Medical Association to expand into the California market last year.
"You're going to see us expand in a big way in California this year, which is a huge market and a market that we love. We’d love to launch Texas next year. That's also a huge and awesome market for independent practices. We'll also continue to grow deeper in 27 states we are already in," he said.
Mostashari said when Aledade launched nearly six years ago the co-founders believed that value-based care was the only path forward for the U.S. health care system and a sustainable business model for independent primary care practices.
The company's "uniquely resilient business model" has given it the resources to be able to support practices during the COVID-19 outbreak.
"We help them not only to survive, but to thrive," Mostashari said.
To support its partners during the crisis, Aledade has procured large shipments of critical personal protective equipment (PPE) and provided expert guidance on the rapidly changing policy and regulatory landscape The company also worked with vendor UpDox to help more practices launch the capability to do virtual office visits.
In three days, Aledade helped more than 150 practices to implement the telehealth platform and now 275 practices are able to do virtual visits.
On March 11, Aledade's 500 partner practices had 100 telehealth visits, and on April 1, it was over 10,000 visits, the company said.
As the health care system faces the COVID-19 pandemic, ACOs in Aledade's network focus on improving access to and delivering coordinated primary care to keep patients healthy, at home, and out of the ER or hospital, according to the company.
Many physician practices are seeing a significant drop in face-to-face patient visits, and the associated revenue from those visits, during the COVID-19 outbreak.
The current health crisis provides that practices can't count on the fee-for-service revenue model, Mostashari said.
"If the only way you are making money is by having someone physically come to your office for a visit and sit in a chair so you can spend 10 minutes with them and then bill for it, and that is literally the only revenue you have, then it turns out that is the risk, putting all your chips on fee-for-service," he said. "Our practices are gonna be getting significant funding from these value-based care programs that don’t rely on face-to-face visits."
He added, "Value-based care programs work by being better than your neighbors. Our practices will be in a decidedly better position than their neighbors."
Susan Chiarito, M.D., a member of the Aledade Mississippi ACO, which earned shared savings payments from Medicare last year, said the practice has benefited from technology, analytics, and practice transformation guidance.
"Now more than ever, it’s clear that the value-based care opportunities we have through our ACO are critical to the health of our patients and the success of our practice through the COVID-19 pandemic," Chiarito said in a statement.
The company said ACOs in its value-based care network have improved quality of care and health outcomes while controlling costs in all types of public and private payer contracts. Aledade’s partner practices have received more than $47 million in shared savings revenue to date.
Aledade’s ACOs use advanced data analytics to gain insights on population health and conduct proactive care management for their most at-risk patients. In the most recently available Medicare results from 2018, Aledade’s Medicare ACOs reduced patient stays in skilled nursing facilities by an average of 17% and hospitalizations by an average of 6%, the company said.