Aledade Raises $30M To Fuel Growth

One year after launch, health care technology company extending physician networks across the country; will use funds to expand service offerings and engage private health plans

As the health care system continues its rapid transformation from fee-for-service reimbursement to value-based care, Aledade, Inc. announced recently that it has raised a $30M Series B funding round to support its mission: making it easy, profitable, and low-risk for independent primary care physicians to manage the new health care economy.

The funding round was led by ARCH Venture Partners, and includes an additional investment from Series A investor Venrock. Aledade will put the funding to work in support of physicians transitioning to outcome-based care across the country. Specifically, Aledade will establish new Accountable Care Organizations (ACOs) and expand existing ones; continue building prevention-focused applications and practice-centered software platforms for partner practices; initiate value-based arrangements with commercial health plans; and hire additional team members to help primary care practices deliver better care and better health for patients at lower cost.

Over the next three to five years, as much as half of the annual $3T spent on health care is scheduled to move into value-based payment arrangements like ACOs that reward positive outcomes for patients and high-quality health care.

“There is a revolution happening in health care, and we are finding that doctors across the country are ready to embrace this change, but need a partner to help them get there. Aledade is that partner,” said Dr. Farzad Mostashari, CEO and co-founder of Aledade, and former National Coordinator for Health Information Technology at the U.S. Department of Health and Human Services (HHS). “We’re helping independent physicians achieve better outcomes for their patients – and be compensated for it. The demand for our services has been overwhelming. This funding will help us reach more doctors, and continue to provide them an expanding array of services to better run their business and care for their patients.”

One year after the company’s launch, Aledade has expanded its national footprint from New York, Maryland, Delaware, and Arkansas to include West Virginia, Louisiana, Kansas, Mississippi, and Florida. The company is on course to triple the number of covered Medicare beneficiaries in Aledade ACOs from approximately 25,000 last year, to more than 75,000 in over 100 physician practices by the end of 2015.

“Aledade combines a world-class team at the forefront of the health care industry, with deep connections to primary care physicians, regulatory savvy, proprietary EHR and claims data analysis, and one of a kind technology products,” said Robert Nelsen, co-founder and Managing Director of ARCH Venture Partners. “The company is uniquely positioned to help lead the U.S. health care system, with primary care physicians at the center of their patients’ care.”

Kristina Burow, Managing Director at ARCH, added: “Aledade has successfully started to scale its unique ACO model, and is poised for explosive growth in its next stage of expansion. We are excited to support the company as it continues to expand across the country.”

Over the past year, physicians in Aledade ACOs have transformed their practices. Aledade ACO practices have increased preventive care visits by 400 percent and vaccination rates for patients by 250 percent. All Aledade ACO practices offer same or next day appointments for patients with urgent needs, and 95 percent of Aledade ACO practices provide 24 hour-a-day, 7-day-aweek patient access to an on-call physician. To manage all of this, all Aledade ACO practices have access to the company’s proprietary cloud-based technology and analytics platform.

Today’s funding announcement reflects an accelerating trend across the health care industry, away from a fee-for-service system and towards one focused on outcomes and value. In January, HHS Secretary Sylvia Mathews Burwell announced that Medicare will shift 50 percent of Medicare reimbursements towards alternative payment models like ACOs by 2018, echoing a goal set by a coalition of private-sector payers. Most recently in April, an overwhelming bipartisan majority in Congress voted to give doctors a 5 percent bonus for participating in alternative Medicare payment systems like ACOs.

“Aledade’s ACO allows doctors to focus on health, not finances,” said Plainville, Kansas-based Dr. Jennifer Brull, Medical Director of Aledade’s Kansas ACO.“Doctors often dispense medical advice – through email or over the phone – that doesn’t require patients to come for an office visit. While this saves the insurance company money, to date doctors haven’t been paid for it – even though it leads to healthier patients. Our ACO rewards doctors for keeping their patients healthy – which is what we want to do in the first place.”

About Aledade
Founded in 2014, Aledade is a new company with an old-fashioned goal: putting doctors back in control of health care. Aledade partners with independent, primary care physicians to provide everything the doctors need to create and run an Accountable Care Organization (ACO) – from business and practice transformation services to up-front capital and cutting-edge technology. The company is led by CEO and co-founder Dr. Farzad Mostashari, former National Coordinator for Health Information Technology at the U.S. Department of Health and Human Services. Aledade employs a team of health policy, regulatory, data and practice transformation experts to implement customized solutions and continuous, local on-the-ground support partners to help doctors in all types of communities across America preserve their autonomy, deliver better care to their patients, reduce overall costs, and keep independent physician practices flourishing. For more information, visit www.aledade.com.