Home Financial responsibility Aledade raises $123 million to advance Medicare Advantage partnerships and grow its subsidiary

Aledade raises $123 million to advance Medicare Advantage partnerships and grow its subsidiary

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The country’s current fee-based healthcare system prioritizes treating disease over preventing it, a reality which, according to Aledade CEO and co-founder Farzad Mostashari, “leads to unnecessary expense and unnecessary suffering. “. That’s why his company partners with independent practices, health centers and clinics to establish Accountable Care Organizations, which are networks of physicians and healthcare facilities that share clinical and financial responsibility for providing coordinated care. Metrics such as avoidable hospitalizations, avoidable emergency department visits, and post-acute care utilization demonstrate ACOs are more successful in reducing avoidable spend than providers who are not enrolled in an alternative payment model.

Monday, Aledade raised $123 million in a Series E funding round. The round, led by OMERS Growth Equity, brings the company’s total funding to more than $400 million since its inception in 2014. The Bethesda, Md.-based company partners with more than 1,000 independent primary care practices, including more than 140 federally licensed health centers, in 36 states and Washington, D.C.

Although other startups focused on innovative primary care, such as One Medical and Oak Street Health, have emerged over the past 15 years, Mostashari said Aledade’s model is uniquely scalable.

“A key differentiator for Aledade is that we partner with existing independent practices,” he said in an email forwarded by a rep. “We don’t buy practices, which requires a lot of capital, and we don’t create practices, which requires a lot of resources and time. This allows us to evolve faster.

Aledade partners with practices that are already well-known in their communities so the company can maintain trusting relationships between doctors and patients, according to Mostashari. He also said the startup’s platform is “uniquely scalable”, highlighting its ability to leverage data and technology, including remote and virtual care, to help practices improve health. of their patients and increase savings.

The company plans to put its new funding to work immediately, first by expanding its value-based model of care with health plans across the country. Specifically, Aledade is looking to expand its partnerships with Medicare Advantage plans, as this is an area of ​​great opportunity. Aledade works with a variety of payers, including Medicare, Medicaid, Medicare Advantage, and commercial insurance companies.

The company has approximately 800,000 patients enrolled in a traditional health insurance plan under global risk contracts. In those same practices, the company has approximately 200,000 Medicare Advantage patients. Knowing that Medicare Advantage is on the verge of reaching parity with traditional health insurance, In terms of future registrationthe 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. SCA announcement its first launch in January with Aledade’s acquisition of Iris Healthcare, a company providing comprehensive virtual advance care planning services. ACS is preparing to add more services with the contribution of firms from the Aledade network.

The startup makes its money by taking a percentage of the shared savings made by the ACOs it operates. Mostashari noted that the company has had positive EBITDA since 2020, positive cash flow and continued strong revenue growth – successes he attributed to the company’s focus on rapid scalability.

“In this tougher market, we didn’t need to raise, but the best time to raise is when you don’t need to,” he said.

Photo: Feodora Chiosea, Getty Images