San Francisco-based Evolent Health just raised $100 million in its second round of funding, an unprecedented sum for such an early-stage health care startup.
Evolent is a particularly attractive prospect for investors, as the Affordable Care Act (ACA) comes into effect. The health exchanges open for enrollment tomorrow. Evolent has aligned its messaging with the goals of the ACA, claiming to provide software and services to help doctors move from fee-for-service-based care to outcomes-based care.
Evolent’s team believes that doctors shouldn’t get paid for prescribing drugs or charging for expensive tests. Instead, they should be incentivized to help their patients stay healthy.
“We had the idea two years ago, and we’re really starting to see it take hold at organizations all over the country,” said Evolent health chief executive Frank Williams.
Williams also serves as vice chairman at The Advisory Board, a consulting firm that works with hospitals to help them optimize care, hire the highest-quality staff, and shift to value-based care models. The Advisory Board invested in Evolent Health as well as the UPMC Health Plan (a health insurance provider in Western Pennsylvania) and private equity firm TPG Growth.
Evolent’s team provides advisory services as well as information technology to hospitals and other care providers. Its technology, known as “Identifi,” is built for population health management. What this means is that Identifi gathers data from inside and outside an organization. Relevant data includes patient information from electronic medical records and publicly available demographic data. The system crunches and analyzes this information, identifies the patients at high risk, and suggests targeted treatment options.
Doctors can also use the technology to track patients and ensure they are taking their medication on time. Indentifi will recommend followup appointments when required.
Hospitals and insurers are increasingly looking for better ways to track at-risk patients remotely and to avoid the huge expense of an emergency room visit. As we previously reported, Partners HealthCare in Boston is now asking its patients to track their blood pressure, heart rate, and other key metrics from home. All this data is made available to physicians, who are alerted if patients are skipping medication or exhibiting signs of an infection or illness.
Williams wouldn’t reveal annual revenues but claims the company is growing 300 percent year over year and is already making “tens of millions” annually. Williams believes that Evolent has an opportunity to be a leader in a market that he estimates is worth about $30 billion.
“We see a seminal change in health care,” said Williams. “The old world of charging fee for service — it won’t last much longer. We need to change the way we care for patients.”
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