With rising demand for in-home care, DispatchHealth scores $136M round backed by Optum Ventures

DispatchHealth sends emergency care-trained medical teams to patients' homes armed with mobile blood-work labs, IV fluids, nebulizers, and most of the standard equipment found in emergency rooms, to diagnose and treat patients. (DispatchHealth)

As an emergency room physician for more than 20 years, Mark Prather, M.D. often saw patients struggling with access and financial challenges.

He also began to question whether the hospital was the best care setting for aging seniors.

"Along the way, I started to question the care model. I began to be concerned that the hospital was no longer price competitive compared to other care options popping up," Prather told Fierce Healthcare.

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He also read up on medical research that suggests older seniors stay healthier when cared for outside the four walls of a hospital, which underpins the growing focus on aging in place.

"With my background combined with technology and a lot of care delivery, I thought we could take that skillset that lives within the ER, hospital and post-acute facility and translate it to the home," Prather said.

Prather and his partner Kevin Riddleberger launched DispatchHealth in 2013 to combine mobile technology with an old-school service: the house call.

"Our care model provides high acuity, lower-cost medical care, it's more satisfying for patients and providers and there is a lot of literature to support that it is more clinical efficacy," he said.

In-home healthcare is a booming market and the company has attracted big-name investors and health system partners.

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DispatchHealth just scored $135.8 million in Series C financing led by Optum Ventures, the venture arm of Optum. Existing investors Alta Partners, Questa Capital, Echo Health Ventures also participated along with new investors Oak HC/FT, Humana, and additional strategic investors.

The company has raised $216.8 million to date.

The startup is not yet profitable, but revenue has grown 100% to 200% every year since it launched, Prather said.

Patients or providers can request medical services through DispatchHealth's mobile app or website and care teams then triage patients to assess their medical needs. The company dispatches emergency care-trained medical teams to patients' homes armed with mobile blood-work labs, IV fluids, nebulizers, and most of the standard equipment found in emergency rooms, to diagnose and treat patients, Prather said.

Whether a patient is dehydrated and requires IV fluids, has a laceration needing repair, or requires higher-level interventions for asthma, chronic obstructive pulmonary disease or congestive heart failure exacerbations, care teams arrive prepared to handle a wide array of high-acuity cases, he said.

DispatchHealth mobile app (DispatchHealth)

The company currently serves 19 markets across 12 states and has provided care to more than 170,000 patients so far in 2020. It has been able to avoid more than $200 million in medical expenses by delivering high acuity care safely in the home to help patients avoid ER and hospital visits and skilled nursing facility admissions, according to the company.

The startup also provides at-home extended and advanced care services to treat simple to complex injuries and illnesses.

DispatchHealth will use the latest funding to continue expanding to new markets, Prather said. The company also plans to invest in engineering teams and leadership talent and is actively looking for technology companies to partner with to launch additional services.

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The company provides services as an alternative to brick-and-mortar healthcare facilities and that has proven to be a vital service during the COVID-19 pandemic.

Several health systems including Renown Health in Reno, Nevada, and MultiCare in Tacoma, Washington have worked with the startup to help keep emergency rooms clear during the pandemic and provide medical care to patients at home.

DispatchHealth has seen nearly 4,000 patients with COVID-19 like symptoms since March 1, including the first known COVID positive patient in one of its larger markets. The company's home-based visits grew 90% compared to the same time last year. 

There also is a business case to be made for DispatchHealth's services. Approximately a third of the cost of the U.S. health care system is devoted to facility-based care delivery, such as emergency rooms, hospitals, and post-acute facilities, according to Prather.

Hospital readmissions cost Medicare about $26 billion annually, with about $17 billion spent on avoidable hospital trips after discharge, according to data (PDF) from the Center for Health Information and Analysis. 

DispatchHealth partners with large health systems, provider groups, and major insurers to focus on individuals with high medical and social needs. This includes the majority of commercial, Medicare Advantage and managed Medicaid plans, as well as traditional Medicare and Medicaid. The startup's care model and technology platform have demonstrated lower costs and improved outcomes by delivering care safely in the home, he said.

The company also partners with remote monitoring technology firms, care management companies, nursing and radiography companies to provide comprehensive services. 

"We want to be the most complete in-home care in the marketplace," Prather said.

RELATED: How startup Tomorrow Health built an Amazon-like experience for getting home medical supplies

The startup is expanding its focus to address patients' social needs as well. Care teams who treat patients in their homes get a unique opportunity to observe how the patients' environment impacts their health.

During the pandemic, DispatchHealth began partnering with local food banks across to country to leave groceries with the most vulnerable patients. The company also teamed up with Tivity Health, a provider of nutrition, fitness, and social engagement solutions, to deliver meals to patients discharged from the hospital.

The service is currently available in the Denver metro area for patients returning home after a hospitalization, those living with chronic conditions, or for the most vulnerable patients with food insecurity.

DispatchHealth is uniquely positioned to intervene on important identified gaps in social determinants of health, Prather said.

"I have delivered babies in the back of taxis and treated gunshot wounds, but I believe this is the best thing I've done in my career," Prather said about the impact of DispatchHealth's services for patients. "As an ER doctor, you may get a thank-you note once a day. Here, we get multiple thank-you notes daily."

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