The country’s current fee-for-service healthcare system prioritizes treating disease over prevention, a reality that “results in wasted spending and unnecessary suffering,” said Aledade CEO and co-founder Farzad Mostashari. That’s why his company partners with independent clinics, health centers and clinics to build responsible care organizations, which are networks of physicians and medical institutions that share the clinical and financial responsibility for providing coordinated care.Indicators such as preventable hospitalizations, avoidable emergency department visits, and post-acute care utilization prove ACOs do a better job of reducing avoidable fees than providers that do not register alternative payment models.
monday, alaidade improve $123 million in Series E funding. The round was led by OMERS Growth Equity, which has raised more than $400 million in total since its inception in 2014. The Bethesda, Maryland-based company works with more than 1,000 independent primary care providers, including more than 140 federally-qualified medical centers, in 36 states and Washington, D.C.
While other startups focus on innovative primary care, such as a doctor and Oak Street Healthwhich has been around for the past 15 years, Mostashari says Aledade’s model is uniquely scalable.
“A key differentiator for Aledade is that we work with existing independent practices,” he said in an email forwarded by representatives. “We don’t buy practices that require a lot of money, we don’t build resource- and time-intensive practices. This allows us to scale faster.”
According to Mostashari, Aledade works with practices that are already well known in the community, so the company can maintain a relationship of trust between doctors and patients. He also said the startup’s platform is “uniquely scalable,” noting its ability to leverage data and technology, including remote and virtual care, to help practices improve patient health and increase savings.
The company plans to put its new funding to work immediately, starting with expanding its value-based care model through health plans nationwide. Specifically, given that this is an area of opportunity, Aledade is looking to expand partnerships with Medicare Advantage plans. Aledade works with a variety of payers, including Medicare, Medicaid, Medicare Advantage, and commercial insurance companies.
The company’s approximately 800,000 patients are enrolled in traditional health insurance plans under global risk contracts. In the same practice, the company has about 200,000 Medicare Advantage patients.Know that Medicare Advantage will be on par with traditional Medicare in Terms of Future Enrolmentthe startup is working to close that gap.
The company will also use the funds to expand its offerings through its new health services subsidiary, Aledade Care Solutions. ACS Announce It first launched in January when Aledade acquired Iris Healthcare, a company that provides virtual comprehensive advance care planning services. ACS is preparing to add more services based on practical input from the Aledade network.
The startup makes money by taking a percentage of the shared savings earned by the ACOs it operates. Mostashari noted that since 2020, the company has been EBITDA positive, cash flow positive, and revenue has continued to grow strongly — successes he attributes to the company’s prioritization of rapid scalability.
“In this tougher market, we don’t need to raise, but the best time to raise is when you don’t,” he said.
Image: Feodora Chiosea, Getty Images
