Aledade, the startup company that is working to reshape primary care, notched its first tuck-in acquisition by scooping up Iris Healthcare, the company announced Tuesday.
Austin, Texas-based Iris Healthcare provides advance care planning technology solutions, and Aledade will fold the company's technology into its new health services unit, called Aledade Care Solutions, the company said.
Aledade did not disclose financial details of the transaction.
By acquiring Iris, Aledade is integrating new patient care solutions into its model, which will give practices in its network new ways to improve patient outcomes and lower costs.
Aledade uses data analytics software to help independent doctors’ offices transition to value-based models and works with more than 1,000 independent primary care practices and health centers. The company's technology helps practices identify and better manage their most at-risk patients.
A year ago, the fast-growing startup banked $100 million in a series D funding round backed by Meritech Capital, Tiger Global Management, IVP and OMERS Growth Equity.
That funding round propelled Aledade's valuation to $2.1 billion, Business Insider reported. The company has raised $306 million to date.
Aledade’s first acquisition will augment the support that it delivers to its nationwide network of practices and health centers, according to executives.
"Today, more than 1.7 million patients are getting better primary care from their own family physicians—more engaged, more accessible, and more empowered primary care,” said Farzad Mostashari, M.D., CEO and co-founder of Aledade, in a statement.
“We've seen the results, in reduced emergency department visits, hospitalizations, and lives saved, when it's more profitable to prevent a stroke than to treat it. But there is more that we can do. With Aledade Care Solutions, we can now bring the first of a series of additional services that aren't particularly profitable in a fee-for-service world, but invaluable for patients with specific needs and their families. Empowering and enabling primary care means extending what primary care practices can do, and we’re excited to begin this new chapter by welcoming Iris Healthcare to the Aledade team," he said.
As the company makes strategic moves to expand its services, it also has benefited from significant growth in 2021. The network of practices and health centers working with Aledade now spans 37 states and has grown by 20% over the last year. Aledade’s value-based care contracts collectively cover more than 1.7 million patients and manage roughly $17 billion in total healthcare spending through 98 Medicare and 47 other value-based contracts.
For the second straight year, the company reports that it is profitable, with gross revenue of over $300 million in 2021. Company executives project that Aledade is currently on the path to more than double that by 2023.
Iris partners with at-risk healthcare organizations including health plans, ACOs, managed care organizations, integrated delivery networks and large provider networks to deliver value-added advance care planning services aimed at reducing unnecessary care utilization for the seriously ill population, lowering cost of care and improving care quality, according to the company.
Comprehensive advance care planning is a robust process designed to ensure that people receive medical care consistent with their values, goals and preferences during serious and chronic illnesses by formally documenting those wishes in an advance directive. Despite the benefits of these services, Medicare data report that only about 2.8% of seniors end up having these discussions with their doctors.
Aledade's deal to buy Iris Healthcare follows a successful pilot program, which demonstrated better outcomes, higher patient satisfaction and lower costs when using Iris’ service combined with Aledade's predictive algorithm and data, helping better identify patients who could most benefit from advance care planning, executives said.
The two companies share a vision for scaling value-based primary care in a way that benefits patients and physicians, Steve Wardle, president and CEO of Iris Healthcare, said in a statement.
Aledade also announced Tuesday that Michelle Ryan, who recently retired as treasurer of Johnson & Johnson after nearly 30 years of experience in healthcare leadership and finance, has joined the company's board of directors and will chair its audit committee.