Aledade, the startup company that is working to reshape primary care, scored a $100 million series D funding round.
The new infusion of capital follows a year of significant growth for Aledade's national network of risk-taking primary care practices. Returning investor Meritech Capital led the round, which included new growth investors Tiger Global Management and IVP, and returning investor OMERS Growth Equity.
With this funding round, the six-year-old startup is now valued at $2.1 billion, Business Insider reported. The company has raised $306 million to date.
"Working in partnership with hundreds of amazing primary care practices, Aledade ACOs have helped achieve better health outcomes for more than a million patients through risk-taking contracts across all types of payers, with remarkable growth in Medicare Advantage," said Farzad Mostashari, M.D., CEO and co-founder of Aledade, in a statement.
"This impressive show of support from investors proves that value-based care led by independent primary care, embracing risk, is the right path forward for American health care. We are thrilled to put these resources to work by helping more primary care professionals enter risk-taking arrangements with all kinds of payers, reinforcing our tech platform in the face of nationwide growth, and launching innovative projects to improve the health of patients across the country," Mostashari said.
Aledade partners with physician practices, health centers and clinics to assist them in building ACOs and other value-based care programs. The start-up now partners with nearly 800 independent primary care practices, including more than 100 federally-qualified health centers, comprising more than 7,800 providers in 31 states.
Through this nationwide network of independent practices, Aledade manages roughly $12 billion in health care spending through 35 Medicare and 51 other value-based contracts and Aledade ACOs care for nearly 1.2 million patients.
In an interview, Mostashari said Aledade, one of Fierce Healthcare's Fierce 15 winners of 2021, does not have plans to go public in 2021 but he predicted there would be "multiple, successful IPOs of companies focused on taking on the risk of total cost of care" this year.
The company has been helping primary care practices weather the storm of COVID-19 by onboarding hundreds of practices in a single week onto a telehealth platform and securing more than a million dollars’ worth of personal protective equipment for primary care practices in Aledade ACOs.
Aledade will use the fresh capital to expand its value-based care model with health plans across the country, with a particular focus on growing its strategic partnerships with Medicare Advantage (MA) plans to improve outcomes and quality for more seniors.
The company already works with all of the largest MA payers and multiple Blue Cross plans to give Aledade practices access to MA value-based contracts. In 2020, Aledade more than doubled the number of patients served in these MA contracts, bringing the total to about 100,000.
As the company expands into more MA plan partnerships and welcomes more practices to its national network of ACOs, Aledade will continue to invest heavily in its technology platform to ensure primary care physicians have a world-class operating system for population health, the company said.
Aledade also plans to launch several initiatives in 2021 that leverage this platform, including extending the use of its integrated telehealth and working to predict and prevent the occurrence of unplanned dialysis. The company also plans to take steps to reduce racial disparities in hypertension control and enable even the smallest primary care practices in the country to join value-based contracts.
"Every other innovator in this space wants to own the doctors and be their boss. But Aledade's team set out to prove that doctors are better caregivers and leaders in their community when they stay independent. They're happier, too," said Craig Sherman, managing director at Meritech Capital in a statement.
"When we first invested in Aledade, we believed in their theory and took a leap. Now, we're doubling down. Aledade and its network of independent primary care practices have proven they can treat patients far better and, as a bonus, raise revenue for primary care practices while simultaneously saving money," Sherman said.
The company's technology helps practices identify and better manage their most at-risk patients. Patients of practices engaged with Aledade have fewer emergency department visits, inpatient stays and readmissions; in the most recent year with public results from the Medicare Shared Savings Program, Aledade practices reduced hospital stays by an average of 9%, avoiding more than 10,000 unnecessary hospitalizations.