Direct primary care provider Paladina Health acquires Healthstat, more than doubling its footprint

Paladina Health announced this week it is acquiring Healthstat, adding more than 230 clinics to its direct primary care system.

Healthstat is a provider of onsite, near-site, shared and virtual employer-sponsored health centers. With the acquisition, Paladina will dramatically expand its footprint and more than triple its number of clinics across the U.S.

Denver-based Paladina Health currently operates 120 clinics concentrated in the Midwest and Western U.S. When the deal is complete, the company will now own 350 clinics in 13 additional states, including in the Southeast where Paladina Health does not have a presence.

Paladina Health remains the nation’s second-largest direct primary care provider, the company said.

The acquisition brings together two patient-focused organizations committed to helping employers reduce healthcare costs and improve the health of their employees through onsite and near-site health clinics and 24/7 access to virtual care, according to Paladina Health.
“Paladina Health and Healthstat share a common mission and vision to transform healthcare in America, and this integration expands our reach, scale and expertise to pursue our commitment on a truly national level,” said Paladina Health Chief Executive Officer Chris Miller in a statement.

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“Both organizations have innovative, data-driven, patient-centric care models that are proven to reduce employer costs while improving health outcomes and employee satisfaction. Combining our companies makes both of us stronger and represents a huge step forward in fixing America’s broken healthcare delivery model," Miller said.

"Healthstat began in the earliest days of direct primary care and developed a nationally recognized, proprietary healthcare delivery model centered on patient engagement that improves health and productivity and at the same time lowers costs,” said Crockett Dale, CEO of Healthstat.

Direct primary care is growing in popularity as an alternative payment model. There are about 1,200 DPC practices in 48 states proving care to over 300,000 American patients, according to the Direct Primary Care Coalition.

In addition, several tech-enabled primary care providers are trying to disrupt traditional healthcare. One Medical, which operates membership-based medical offices, went public at the end of January. Oak Street Health, which went public in August, operates a network of primary care centers for Medicare eligibles in medically underserved communities. 

Trendy San Francisco-based startup Forward has dubbed itself the primary care of the future with a tech-enabled direct primary care business model.

Amazon teamed up with buzzy tech-enabled primary care group Crossover Health to pilot health centers near its fulfillment centers and operations facilities. 

Healthstat has a partnership with Johns Hopkins HealthCare Solutions to integrate its evidence-based disease management and behavior assessment programs into its network of employee health clinics. The company also offers occupational health services, condition management programs to tackle the root causes of chronic illnesses, and wellness programs.

RELATED: Amazon teams with Crossover Health to pilot employee health centers

Paladina Health has made significant investments in a technological infrastructure to scale the company and create a flexible and integrated system for cross-clinic utilization nationwide, the company said. It's direct primary care system has produced measurable benefits for both patients and their employers. Ninety-five percent of individuals with chronic conditions are engaged with Paladina Health to improve their health, and employers see up to a 40% reduction in the total cost of care.

The company acquired Activate Healthcare in 2019, creating one of the largest providers of value-based primary care across the U.S. serving more than 170,000 patients in 18 states.

Paladina Health is backed by global venture capital firm New Enterprise Associates, Oak HC/FT and other strategic investors. The company has raised $165 million in venture capital funding to date, according to Crunchbase.

“This strategic acquisition enables Paladina Health to accelerate growth into new markets and further scale its operations across the country,” said Mohamad Makhzoumi, general partner and head of healthcare services investing at NEA, in a statement.