From the People Who Brought You ACOs: A New Model For Healthcare Transformation

farzad_mostashariWhen my co-founder Mat Kendall and I launched Aledade last June, I wrote that our mission was simple: empowering doctors on the front lines of medicine to put them back in control of health care—and rewarding them for the unique value they create. Today, a few days shy of our first birthday, we are announcing that we have raised $30 million in a funding round led by ARCH Venture Partners, and including our Series A funding partners at Venrock. This investment is a testament to the growing demand for our technology-enabled services, and to the rapid progress we have made in creating a platform for doctors to manage the new value-based healthcare economy. But most importantly, it’s a commitment to long-term thinking.

First, we have tapped into a huge unmet need and a growing demand for our healthcare technology services. We hand-picked and signed up 26 practices within weeks of starting the company, and have now established unique partnerships with over 100 primary care practices in 9 states.

These practices serve nearly half a million patients, and our multiple accountable care organizations will soon be managing the total cost and quality of care for over 75,000 Medicare patients.

Everywhere we’ve gone – from Orlando to Wichita, Wilmington, and Little Rock – our team is meeting independent primary care doctors eager to be on the front lines of the biggest health care transformation this country has seen in our lifetimes – and hungry for the tools and support to succeed in the new health care economy. All of them have realized that rapid changes in their industry – from the implementation of electronic health records to the shift towards outcome-based reimbursement – require them to rethink the way they’ve operated for years. They want better health for their patients, and a more central role for primary care doctors in coordinating care. But they’ve also recognized that, to thrive in the new health care economy, they need a partner whose interests are aligned with theirs- to act in the patient’s best interest.

Second, we have built a platform for managing practice change. We have provided our doctors with strategic direction. We’ve advised on, and implemented, important workflow changes. We’ve optimized electronic health records to make it easier to do the right thing for the patient. We’ve shown doctors and their staff data they had never seen before. And we’ve built cloud-based technology to enable them to turn that intelligence into active patient care. As a result, we’ve seen preventive visits and immunizations soar, and primary care practices open their doors whenever their patients need them.

But we realize that these steps are merely the beginning of our work.  We know that there is so much more we need to learn, so much more we need to build, and so much more we need to do.

We cannot solve today’s problems with the same short-sighted thinking that created them. Success at value-based care requires a break from the “coin-operated” immediate gratification of fee-for-service. It means longitudinal care, deeper relationships, and the vision and resources to play a long game- to invest in prevention and chronic disease management even when its pay-offs are delayed.

This investment means that we can meet the demand from physicians for our unique ACO model, and to expand the services we offer our partner practices. This money will help us build additional software and analytic tools for our practices; expanded service offerings; and add more on-the-ground support for our doctors and their staffs. It means being able to expand to private payers. Most of all, it means being able to invest in long-term prevention and chronic disease management, and patient engagement efforts that may take years to bear fruit.

I’m inordinately proud of our amazing team, and the effort and sacrifice that has brought us to this point.  But today is not simply a day for celebration.  It’s a day to renew our commitment to the mission that started this company, and redouble our efforts to empower primary care doctors to take control of the chaos and waste that comprises too much of our health care system.

We need to build a platform that will provide all the services our practices need, not just some; that will serve all of our practice’s patients, not just the ones on Medicare. That will deliver results not for one ACO, or for five, but for 50 – or 500.  Better health at lower cost not just for one year, or three, but for a lifetime.

As Aledade employee #1 Edwin Miller said the other week, “It’s time to fire ourselves, re-hire some better versions, and take it to the next level.”

Let’s get to work.

Farazad Mostashari, MD is the co-founder of Aledade and former ONC Director.

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7 replies »

  1. Congrats to Farzad for taking the lessons learned at ONC and elsewhere out into the real world.. Many of us have wondered how you can take the lessons learned from large integrated systems out to the 40% of doctors who are still practicing in small or even solo settings and you and your team seem to have nailed it.

    Unlike government work in the private sector being able to figure out the problem and find a solution is just the first step – being able to actually have people adopt your model is the real win.
    As to the comments below I don’t usually feed the trolls but Farzad was one of the few leaders I have ever worked for that seems to genuinely be driven by solving the problem vs building their own ego. I was a lowly ONC project director but I felt like I had as much of a voice as any other stakeholder in DC.

    BTW Flexner CMS developed the ACO pioneer model not ONC and the VC funding isn’t a public offering so no ones investment is at risk who doesn’t know exactly what they are doing. You work at a practice with 300 and probably have people who run IT and business process but the bulk of Physicans don’t have those resources.

  2. Farzad, as a practicing physician who has listen to your pitch first hand (twice), shame on you. We are a thriving private practice physician group with over 300 providers, a well functioning Epic deployment, and our choice of MSSP, full risk contracts, and ACO choices. Your value proposition was week and quite frankly your hubris and utter lack of insight into the challenges facing providers in the field is just shocking. Your shameless self promotion and condescension towards your colleagues never ceases to amaze me. As you know, your presentation was first shot down by our office manager, then you came back and our business manager shut you down. The providers in the room couldn’t even ask a question because you and your team were so thrown off by some VERY basic questions…where is the technology, where is the actual ROI, where is the business model….and your bow tie has become a running joke in our office.

    For those members of the THCB that might not be as familiar with you and your ‘hype’ let’s set the record straight. You did just enough time at AMC’s to punch your card. When you and my peers overlapped at MGH you were considered a ‘dangerous provider’ and a relentless suck up. Anyone who doubts this…reach out to the folks at MGH (don’t bother reaching out to Yale, Farzad’s medical school…nobody there remembers him). Your time at CDC, and HHS showed your true colors…shameless self promotion and great politicking. For all your bragging about ACOs, the efforts you launched were largely considered a failure. Most organizations opted out of Pioneer…the data presented on this very site from Jeff Goldsmith and others show that the very efforts that you touted in the ACA have led to nothing other than price increases….and you call yourself a success?

    So now…you follow in Bob’s footsteps to Venrock. Is this going to be the same hype cycle as Castlight? THCB readers, please note Bob Kocher (another member of the AMC-government-VC revolving door club) and Brian Roberts, both of Venrock our now facing class action suits for their pump and dump scheme around the Castlight IPO. Farzan will no doubt try the same thing here…at your expense.

    Farzad, you BRAG that you have raised $30MM…we both know the only way you can sustain that is through an increasingly aggressive hype cycle (hence your frequent posts). For all the providers out there, take it from a provider who knows this industry inside and out…AVOID FARZAD AND HIS ILK. THEY ARE TRYING TO GET RICH OFF YOUR HARD WORK. There is little value to what they are pitching and if you simply optimize your EMR yourself and use the Co-Op mechanism in the ACA, you can do everything that Farzad and his organization are pitching. ABOVE ALL SO NOT TRUST FARZAD HE IS A SHAMELESS SELF PROMOTER AND CARES FOR NOBODY BUT HIMSELF.

    Matthew, shame on you. You let Farzad post these things…it should be paid advertising. I am really disappointed. He isn’t informing this community he is simply promoting himself.

    A.Flexner MD
    Little Rock, AR

    • Pretty amazing that you know so much about Farzad’s past yet so little about who actually introduced ACOs. It takes some pretzel logic to cast blame on Farzad for the whole initiative beacuse of the 9 very long months he spent studying them at Brookings–but who knows maybe his buddy Bob Kocher is to blame. And let’s be clear, in your world the jury is in and the verdict returned after only 3 years.

      And then there’s Aledade itself. Farzad says they have integrated with small practice EMRs, added data analytics and built their own cloud-based software, but he makes clear that they intend to build more and make it more scalable. Richer people than you and I have given them $30m+ to do that. But apparently they twice failed to explain to you the ROI. I can do it right now knowing nothing about the company or the client. “You, provider, take on more MSSP or ACO-type risk based contracts. You pay us to give you the tools to do it. You end up keeping more than you pay us.” That’s ROI 101. I’ve seen Farzad in plenty of situations and, lowly MD that he may be, I know he can think on his feet quickly enough to come up with something just as good–if not perhaps even better.

      Finally, while you have incredible inside information on his time at medical school and residency from your many “peers”, who managed to follow the well-paved move from Mass General to Little Rock, you seem to have missed his time at NYC dept of health where he led the project that put the EMRs –and in your words if you “simply optimize your EMR yourself and use the Co-Op mechanism in the ACA, you can do everything that Farzad and his organization are pitching”–into the majority of safety net physicians’ in New York offices with great results. At a time when the only other people doing it were Kaiser.

      So a startup CEO raised $30m. Therefore he’s by definition self promoting. Whoop-de-do. I’m not sure that that qualifies for the kind of polemic you’ve issued. In fact I think it’s just plain insulting.

      Oh and BTW I rarely approve anything for publishing, which is why there are editors on the mast head.

  3. I agree with you Bobby- it’s easy to throw around jargon like “transformation”, or talk about the importance of “physician engagement” and quite a bit harder to walk towards a different model of delivering care, step by step. What helps tremendously is to have a business model that’s based on achieving outcomes.


  4. “Transformation” has largely become one of those cliches (like “interoperability,” “innovation,” “collaboration,” and “transparency”).

    Except where the “Lean” process QI movement is concerned. My reporting from the 2015 Lean Healthcare Transformation Summit.


    • Some people do get worked up on the Internet. He does sound a bit self-serving, but most people are.

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