When Hims launched in 2017, it was well known among New York City subway riders for its cheeky ads selling erectile dysfunction medication.
Three years later, and the startup, now Hims & Hers, is poised to go public in a blank check deal that values the company at about $1.6 billion.
The company, which combines telehealth and medication delivery, started with four products and has since added a women’s health business, called Hers, that focuses on birth control, sexual health, and skin and hair care products.
In July 2019, Hims & Hers named its first chief medical officer, former Walgreens executive Pat Carroll, M.D., signaling that the company's ambitions go far beyond e-commerce and extend into healthcare.
The direct-to-consumer telehealth and wellness startup now provides access to medical care and treatment for more than a dozen conditions with more than 50 products. It has scaled its business quickly—it conducted more than 2 million telehealth consultations in 2020 and has about 260,000 subscriptions.
Last spring, in response to the COVID-19 pandemic, Hims & Hers fast-tracked an expansion of its telehealth services to offer access to primary care and also rolled out online mental health services, starting with free support groups.
The company is now collaborating with Privia Health to provide Hims & Hers patients with direct access to providers for in-person visits and virtual primary care in a handful of states.
In an exclusive interview with Fierce Healthcare, Carroll said Hims & Hers is building the front door to healthcare and wants to partner with established provider organizations to ensure consumers have access to a "broad spectrum of high-quality care."
"If you look at what we’re doing at Hims & Hers, it's the next iteration of consumer-facing care, and we're committed to doing it right and becoming a part of the health ecosystem," said Carroll.
The collaboration with Privia Health builds on the company's partnerships with New Orleans-based Ochsner Health System and New York City-based Mount Sinai Health System to help patients manage chronic illnesses and other healthcare conditions not addressed through its own platform.
Privia Health is a national physician organization with more than 2,600 providers across multiple states with a strong focus on primary care. Privia’s proprietary cloud-based technology platform and focus on physician-driven wellness help improve outcomes and create healthier communities, according to the companies.
Keith Fernandez, M.D., Privia’s chief clinical officer, said the partnership will offer a "seamless continuum of care."
"Privia is focused on helping patients prevent disease and manage chronic conditions while supporting their path to better health. Through this collaboration, we’re making healthcare easier for patients who require in-person and virtual appointments, and partnering with them to focus on their whole health both in, and outside, the doctor’s office," he said in a statement.
Hims & Hers patients will now have direct access to Privia providers for in-person and virtual primary care in the District of Columbia, Georgia, Maryland, Texas and Virginia.
The partnerships with Ochsner, Mount Sinai and Privia Health represent a strategic business initiative for the wellness company as it pushes deeper into the healthcare market.
"Look at how we’ve changed and evolved at Hims & Hers over last 18 months. When we first started, we focused on specific conditions and offered treatments primarily around stigmatized conditions. When the pandemic began, we started to offer acute episodic care in response to the needs of our customers who were having trouble accessing face-to-face care in brick-and-mortar locations," Carroll said. "As the pandemic progressed, we got into COVID-19 home testing and COVID-19 screening."
While the company has been focused on expanding virtual care options, there continues to be a significant percentage of patients who need a higher level of care that can only be provided through in-person care at a healthcare facility.
The partnership with Privia Health's provider network expands the referral capacity for His & Hers patients and benefits both organizations, according to Carroll.
"We will be referring our patients from our platform into Privia in a frictionless way, and their providers will have the opportunity to refer their patients into the Hims & Hers platform for certain conditions," he said, noting the company's expertise in the areas of dermatology, behavioral health and sexual dysfunction.
He added, "Treatments for those conditions and those services aren’t always widely available even in a multi-specialty group."
COVID-19 accelerated company's evolution
The pandemic pushed forward the digital health company's entry into acute episodic care and primary care, but mental health care was always on the startup's road map, according to executives.
Hims & Hers' online behavioral health offerings are now available in 20 states, including online psychiatric evaluations and anonymous support groups. Hims & Hers will soon offer individual therapy sessions as well.
"Our intent is to be in all 50 states and to offer a full suite of behavioral health services," Carroll said.
Besides offering consumers more convenient and affordable healthcare options, Hims & Hers also focuses on the quality of care provided through its virtual platform.
"We have built a quality platform that rivals anything else I've been involved in and rivals traditional physician groups," Carroll said. The company is approaching 20,000 patient encounter reviews in which Hims & Hers providers are evaluated on criteria such as "webside" manner, following evidence-based guidelines and documentation.
"The next hurdle for virtual care is to prove that the quality is as good or better than face-to-face care, and that’s something that we’ve been able to do and we've built into our offerings," he said.
The upstart has seen rapid financial success, driving 100%-plus compounded annual revenue growth over the last two years. Hims & Hers had $89 million in revenue in 2019, and it expects to bring in $138 million in 2020. In October 2020, Hims & Hers reported $41 million of net revenue in the third quarter, representing 91% year-over-year growth.
Hims & Hers will soon enter the public market through a merger with special purpose acquisition company Oaktree Acquisition Corp.
Going public will accelerate the company's growth and allow it to expand more rapidly as it eyes becoming a major healthcare player.
"The growth that we’ve had in the past three years has been tremendous. We plan to look at other clinical areas and look at new and interesting partnerships to expand what we can do," Carroll said.