The question of the day: does 25 people leaving a several 100-person company REALLY count as a “mass exodus”? In this episode, Jess and I find out! Hey – it’s the startup world, things explode all the time. Some new deals: Aledade raises $123 million; Tripp raises $11 million; Socially Determined raises $22.7 million; Digital Diagnostics raises $46.3 million.
Aledade is the “build an ACO out of small independent primary care practices” company. It was founded by former ONC Director Farzad Mostashari and has been growing fast and profitably in the last few years, having raised just shy of $300m. Farzad recently both tweeted out the latest and put up a slide deck about their financial and business progress. Aledade also announced a major star signing in Mandy Cohen, previously Secretary of HHS in North Carolina, who is becoming CEO of a new division called Aledade Care Solutions. I had a wide ranging conversation with both of them about what Aledade has done and what it is going to do, as well as the general state of play in primary care and risk taking–Matthew Holt
TRANSCRIPT (lightly edited for clarity)
Okay, it’s Matthew Holt with THCB Spotlight. I’m really thrilled to have Farzard Mostashari and Mandy Cohen with me. So, both of these two doctors have spent a lot of their time in public, much of their career in public service, Farzad for many years was in New York City, and then later was at ONC. Mandy was at CMS, and more recently, was Secretary for Health in North Carolina. In fact, towards the end of the Obama administration, Farzad was doing venture capitalism in a bar and got given a check and founded Aledade. And the news just recently, was that Mandy, who has just finished her term in North Carolina, is now going to join Aledade and start a new division there. So, I thought we would chat about how Aledade’s doing, what it’s doing, and what it’s going to do in the future and hopefully, yeah.
Today on Health in 2 Point 00, we’ve made it to Inauguration Day! On Episode 179, we have over $300 million in deals and a SPAC IPO. Jess asks for my take on Hims & Hers going public, primary care chatbot company K Health raising $132 million, digital pathology company Paige raising $100 million, and ACO management company Aledade getting another $100 million. —Matthew Holt
Today on Health in 2 Point 00, Jess and I talk about HCA now that the real numbers have come out. On Episode 118, Jess asks me about Aledade raising $64 million. Founded by former ONC director Farzad Mostashari, they set up ACOs for independent physician practices and have been doing a lot around COVID-19. Medopad has rebranded as Huma and acquired Biobeats and Tarilian Laser Technologies (TLT); they’ve been doing remote monitoring and have been around for a while. Novartis acquires Amblyotech, a lazy eye digital therapeutic. Finally Yes Health gets $6 million – yet another “we’ll put you on a diet and have coaches bully you” platform. —Matthew Holt
Epic founder and CEO Judy Faulkner announces plans to give away 99% of her estimated $2.3 billion wealth to charity. Faulkner joins 136 other individuals and families in the Giving Pledge, which was launched by Warren Buffett and Bill and Melinda Gates to encourage billionaires to give the majority of their wealth to philanthropic causes.
What’s not to like about that? Good to know that if Epic wins the $11 billion bid for the VA’s EHR system, some of the government’s money will eventually trickle back down to charity.
Are EHRs creating disparity in care?
A study from Weill Cornell Medical College looks at “systematic differences” between physicians who participated in the Meaningful Use program and those who did not, noting that the differences “could lead to disparities in care.”
The researchers suggest that providers participating in the MU program may provide higher quality care to their patients as physicians using paper records “have less reliable documentation and weaker communication” between providers and won’t benefit from EHR-enabled quality improvements.
I suspect that physicians relying on paper records would balk at the suggestion that the care they provide is inferior to their more digitally-equipped peers. However, it’s hard not believe that the overall care process would be enhanced if all providers could electronically share critical patient information.
News Flash: Government is wasteful in its spending
We launched Aledade on June 18th, and by the end of July we had recruited 80 primary care physicians in 4 states to join us in creating the very first Aledade ACOs. We have been work together ever since- but haven’t been able to talk about our wonderful practices until the official notification from CMS that came today.
We are thrilled to announce that beginning January 1, our two newAledade ACOs will be taking accountability for the care of over 20,000 attributed Medicare patients, and stewardship of nearly a quarter of a billion dollars of health care expenditures each year. We’re building a new delivery system on the foundation of trust between patients and the physicians who have been caring for them in their communities for decades, and enabled and accelerated with cutting-edge technology and analytics.
One ACO will operate in the state of Delaware, in close collaboration with our physician partners and our field team, Quality Insights of Delaware. Our second ACO, the Primary Care ACO, will take the same model spanning three states — New York, Maryland, and Arkansas, where we are also working with local partners like the Arkansas Foundation for Medical Care. Our hand-picked ACOs physician partners are some of the most capable and inspiring primary care physicians in the country. They are leaders in their local, state and national physician associations; they are pioneers of Meaningful Use and Patient Centered Medical Homes; they are much-decorated top doctors in quality; but most of all, they are the pillars of their communities.Continue reading…
Later this month – perhaps as early as this week – the Center for Medicare and Medicaid Services (CMS) is poised to release a proposed rule to update to the Medicare Shared Savings Program (MSSP). MSSP is the national program which allows providers to create ACOs, and it is the program under which Aledade ACOs operate. This will be the first update to the program in three years, and we expect there will be a great deal to unwrap once the rule is public (we also acknowledge that we are among the few who await publications of CMS rules with the anticipation of children on Christmas morning). I’m sure we’ll spend the day of the release tweeting our initial reactions — be sure to follow @Farzad_MD, @Travis_Broome, and @Aledade_ACO for those updates.
The new rule will contain a lot to unpack; but we believe that the decisions that CMS makes in 4 key areas will play a large role in whether participation in the program continues to be robust and whether the program succeeds in being the flag-bearer for new payment models.
Last week, Dr. Bob Kocher and I took to the pages of the New York Times to detail a health care success story in Southern Texas. In a region once featured for its extreme health care costs and poor health outcomes, a group of physicians motivated by new incentives in the Affordable Care Act has started to change the equation. The Rio Grande Valley ACO Health Providers achieved eye-popping savings in their first year – coming in $20 million below its Medicare baseline and receiving reimbursements totaling over $11 million while also achieving better health outcomes for its patient population.
The savings number made for an impressive headline.
But as is often the case, other information had to be left on the cutting room floor. We dive a little deeper into the RGV ACO below:
The Central Role of Information Technology
Dr. Jose Pena, Chief Medical Director of the Rio Grande Valley ACO, emphasizes that one of the first and most difficult tasks for the newly-formed organization was developing an IT infrastructure that would serve their needs. “Using what was there wasn’t really an option,” says Dr. Pena, “so we built our own infrastructure.”
Forgoing a single EHR solution, the Rio Grande Valley now operates on a mix of cloud and office-based systems. The ACO developed software to identify metrics from various EHR systems, migrate that information to the cloud, and view real-time performance of providers. “IT accounted for 40% of our costs,” says Dr. Pena, “but the importance of proper reporting – to our leadership team, and to CMS – was at the top of our list.” The ACO identifies its customized IT system as foundational to its success.
On June 18, we launched Aledade – a company built on our belief that independent primary care physicians are best positioned to lead the next revolution in health care delivery – boosting quality of care and bringing down costs. Over the past six weeks, we traveled across the country meeting doctors, discussing the future of independent primary care practice, and recruiting physician partners for our first wave of Accountable Care Organizations.
Meeting these doctors, from areas and backgrounds as diverse as the populations they serve has been a constant reminder of the reasons we founded this company. One physician, having spent decades serving the same community from the same office, lamented that in the past, he felt more involved – and more informed – about all aspects of his patients’ care. Today, he told us, fragmentation in care delivery had given him less insight into his patients’ health, and less influence in coordinating their treatment.
When we started Aledade, these were the type of doctors we wanted to empower.
Today, I am elated to announce that we have formally submitted applications to the Center for Medicare & Medicaid Services to form ACOs serving physicians in Delaware, Maryland, New York, and Arkansas for 2015. We expect this first wave of Aledade ACOs to serve tens of thousands of Medicare patients beginning January 2015.
The choice of four dissimilar states was intentional. We intend to establish a model that can be replicated across the country, and the diversity in our practices matches the diversity of our country. Each state has strengths to build on. Delaware- ‘the First State’ has been a leader in electronic health record implementation. Maryland and New York’s health reforms set the stage for alignment and collaboration with acute-care facilities. Arkansas’ tradition of independent primary care practice is strong. We’ll also be serving very different patient populations in each state – from practices that serve urban neighborhoods to those that treat folks in small towns and rural communities.
Today, I’m launching a new company, called Aledade.
Aledade partners with independent primary care physicians to make it easy and inexpensive for them to form and join Accountable Care Organizations (ACO) in which doctors are paid to deliver the best care, not the most care.
This is good for patients who will find that their trusted primary care doctors are more available and better informed than ever before. It’s good for doctors who want to practice the best medicine possible, the way they always wanted to. It’s good for businesses and health plans looking for healthcare partners that deliver the highest possible value and outcomes. And it’s good for the country as higher quality, lower cost care will help lessen the strain on our budget and our economy.
The world of start-ups may not be the usual path for those leaving a senior federal post, but it’s the right decision.
For me, Health IT was never the “ends,” but a “means” to better health and better care, and I continue to believe that better data and technology is the key to a successful transformation of health care. And it is why the attempts to do so now can succeed, where they have failed before.
Empowering doctors on the frontlines of medicine with cutting edge technology that helps them understand and improve the health of all their patients- that is the mission of our new company, and one that has animated my entire career. Continue reading…