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Buzzy primary care startup Iora Health just raised $126 million. Meet the 8 companies changing how doctors get paid and building the future of medicine.

Published by Business Insider on Tue, 11 Feb 2020

Investors are pouring millions into companies looking to shake up the way patients go to the doctor's office.Over the past few years, models like venture-backed Iora Health, family-owned ChenMed, and private-equity-backed Oak Street Health have picked up steam in their approaches to caring for elderly Americans, boosted by the growth of private Medicare plans.Iora Health in February raised an additional $126 million from investors.At the same time, companies like One Medical have made a name for themselves as a more convenient way to see a doctor, for the price of a $200 annual fee.One Medical in January kicked off trading on the public markets, surging to a $2.7 billion market value.Read on to see how each of the startups is shaking up the traditional way that doctors take care of patients.Click here for more BI Prime stories.In the past few years, a crop of companies has been gaining steam with new approaches to primary care.Rather than getting paid for each visit or procedure that a patient needs, startups are looking to change the way primary care is practiced, in many cases working to get paid a large fixed sum each month to take care of all of a patient's health needs.In many cases, that means seeing fewer patients a yearhundreds, rather than thousandsoffering additional services, or making the process of getting an appointment more convenient.Read more: A new kind of doctor's office charges a monthly fee and doesn't take insuranceand it could be the future of medicineAnd others are taking note. For instance, health systems including Utah-based Intermountain Healthcare and Pennsylvania-based Geisinger are taking similar approaches with some of their primary-care doctors. The federal government is planning to pay for care for some Medicare patients in a similar way too.Investors have taken an interest in the model, pouring hundreds of millions in funding into some of the companies. And the space stands to bring in even more cash, from the public markets as well as private. One Medical in January kicked off trading on the public markets, surging to a $2.7 billion market cap in its first day of trading. Iora Health in February raised an additional $126 million.The rise of some of these modelsin particular venture-backed Iora, family-owned ChenMed, and private-equity-backed Oak Street Healthcomes at a time when the market for Medicare Advantage plans has grown increasingly competitive.As of last year, more than 20 million Americanswere enrolled in private Medicare Advantage plans. People can typically choose to enroll in Traditional Medicare or Medicare Advantage plans when they turn 65. Either way, their health needs are largely funded by the US government.Read on to see how the startups are shaking up the traditional way we do primary care.This article was published on August 20 and has been updated.One MedicalWhat One Medical does: When the San Francisco-based primary-care startup One Medical opened for business in 2007, its goal was to upend the way people got medical care by making it easy and convenient to see a doctor. The company charges a $200 annual fee and bills your insurance.Over the next decade, it became the primary-care startup to beat. After a big infusion of capital, it's expecting to double the number of medical clinics it operates over the next two years. It has 77 locations in nine cities and is increasingly focused on signing up companies to provide care for their workers.While One Medical does accept some private Medicare plans,it doesn't take Medicaid, according to its website.One Medical's doctors and health professionals are limited to seeing 16 patients a day.Funding raised: As a private company, One Medical raised $408 million. The company went public in January, raising $245 million in the offering and surging to a $2.7 billion valuation on the first day of trading.According to filing with the Securities and Exchange Commission, One Medical's losses have increased, even as the company is signing up more customers. One Medical had 397,000 member as of September 30, 2019.Number of clinics: It had 77 locations by the end of September 2019, according to the filing.Read more: I became a member of One Medical, a primary-care practice that charges a $200 annual fee and has plans to double over the next two years. Here's what it was like.Iora HealthWhat Iora does:Founded in 2010, Boston-based Iora works with "sponsors"mainly employers or private health plans for the elderly (known as Medicare Advantage)that cover a monthly fee for primary care. Iora also built out care teams of nurses and other health professionals that can help the doctors within the practice.Iora says the approach is working. In one group of Medicare patients, Iora says it reduced hospital admissions by 50% and emergency room visits by 20% over 18 months.Doctors care for a group of about 500 to 700 patients, depending on where they practice and the health of those patients.Funding raised: The company has raised more than $375 million from investors like GE Ventures, Khosla Ventures, Temasek Holdings, and Humana. In February, Iora raised a $126 million Series F round, confirming Business Insider's reporting from October that Iora was raising at least $100 million more as it looked to expand in 2020.Number of clinics: Iora has 48 clinics as of February 2020, in states such as Arizona, North Carolina, Georgia, and Colorado.Read more:A doctor raised more than $250 million to create a new kind of clinic that charges a monthly fee, and it could be the future of medicineVillageMDWhat VillageMD does:Chicago-based VillageMD was founded in 2013 with the idea of giving primary care doctors more resources to help them manage the care of their patients. Instead of cutting down the number of patients doctors see per year, the hope is to add in monitoring services, transportation, and other ways to keep patients healthier.VillageMD's doctors manage the health of about 2,000 patients a year, including those on commercial insurance, Medicaid, and Medicare plans. Rather than get paid based on the number of visits doctors have with patients, VillageMD works with insurers so that it gets paid based on how well it cares for patients."We don't get paid unless we can drive better quality" CEO Tim Barry told Business Insider.Instead of building up new practices from scratch, VillageMD brings in existing primary care practices with existing patients, helping them transition to a different payment model with the help of software and operational support. VillageMD has a mix of doctors who are employed by VillageMD and who partner with the company.After raising an additional $100 million in September, VillageMD is building out its primary care services in the home, as well as build on its partnership with Walgreens. In November 2019, VillageMD opened the first of five planned primary care clinics within Walgreens in Houston, Texas.Funding raised: In September, the company said it raised an additional $100 million in a round led by the investment firm Kinnevik. In total, the company's raised $216 million.Number of clinics: VillageMD currently works with more than 2,500 doctors who work in about 215 practices across eight states.In January, VillageMD acquired Summit Medical Group of Arizona, adding another six clinics and 50 providers to VillageMD's footprint.ChenMedWhat ChenMed does: Miami-based ChenMed was founded 32 years ago by Dr. James Chen. The family-owned organization manages the health of seniors enrolled in Medicare Advantage plans. Under the arrangements, plans pay ChenMed a set amount to keep their members healthy. ChenMed offers services like on-site pharmacies, transportation to and from appointments, exercise options, and social networking with other seniors.To do that, doctors in ChenMed's practices typically manage about 300 to 400 patients a year, ChenMed's chief growth officer Dr. Gaurov Dayal told Business Insider, a much smaller group than the thousands of patients doctors in traditional primary care usually see over the course of a year.Funding raised: The company is family-owned.Number of clinics: It operates more than 60 clinics across eight states. It plans to open 20 new centers, expanding to 80 centers in 10 states in 2020.OakStreet HealthWhat Oak Street Health does: Chicago-based Oak Street Health provides primary care to seniors, in particular those who are eligible for both Medicare and Medicaid. It works with Medicare Advantage health plans and those on traditional Medicare to get paid to manage the health of members, by driving them to and from appointments, and offering them social events and more time with their doctors.Like Iora and ChenMed, Oak Street's doctors see fewer patients than traditional primary care, caring for around 500 patients.Funding raised:Oak Street is backed by the private-equity giant General Atlantic.Number of clinics: It has 45, in the Chicago area, Philadelphia, Cleveland, Detroit, Indiana, Rhode Island, and North Carolina.ForwardWhat Forward does: For $150 a month, Forward acts as your primary-care provider, along with providing some extra perks and technology with the intent to keep you healthier. The company doesn't take insurance.Forward's a type of doctor's office that's similar to direct primary care,a small but fast-growing movement of pediatricians, family-medicine physicians, and internists. This group doesn't accept insurance and instead charges a monthly membership fee that covers most of what the average patient needs and their prescription drugs at much lower prices.In Forward's case, membership includes unlimited visits, blood testing, vaccines and genetic testing. The company declined to disclose how many patients each of its doctors sees on average.Funding raised: Forward declined to comment on the amount it's raised. As of 2017, it had raised $100 million, according to BuzzFeed News.Number of clinics: Forward has seven clinics, most recently opening one in Washington, DC, as well as spots in Southern California, San Francisco, and New York.Read more: Silicon Valley has a fresh take on a new movement that could be the future of medicineParsley HealthWhat Parsley does: Founded by Dr. Robin Berzin in 2016, Parsley Health is focused on functional medicine, which takes a more comprehensive approach to treating the underlying cause of a disease, looking at it more holistically than case by case.For a $150 monthly fee, you get primary-care visits, nutrition plans, supplement regimens, and more in-depth genetics and microbiome testing. Parsley does not take insurance.In 2019, Parsley started moving into pediatrics, offering similar services at a price of $129 a month, with the hope of providing better care for children and teens with chronic conditions.Now, the startup plans to take its business national through a virtual service that will also cost $150 a month.A spokeswoman for Parsley said that its doctors max out at seeing a few hundred patients per year.Funding raised: The company in October said it had raised a $26 million series B round, bringing its total funding to $36 million.Number of clinics: Three, based in New York, Los Angeles, and San Francisco. As of January, its virtual service is currently available in 32 states.Read more: A doctor's office that charges $150 a month and doesn't take insurance just raised $26 million to take its model nationalGalileo HealthSummary: Founded by One Medical founder Tom Lee, Galileo Health is a new company that charges an annual fee to provide some care online or through an app.The cost is $59 for basic services like prescription refills and treatment for simple ailments. Paying $139 a year also gets you doctor consultations for more complex conditions, lab tests, and referrals to specialists, according to Galileo's website. Right now, it's available in the New York City area.The startup plans to have an in-person healthcare component particularly focused on sicker patients covered by Medicare and Medicaid. The company is hiring primary-care doctors who have experience caring for patients in those programs, according to job listings.Funding raised: Galileo is backed by venture firm Oak HC/FT, which led the company's series A round.Number of clinics: Virtual for now.Read more:The founder of One Medical is building a new primary care startup to care for the sickest Americans
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