What You Should Know:
– Aledade, a Bethesda, MD-based provider of value-based primary care raises $123M in Series E funding to support investments in value-based care for more seniors covered by Medicare Advantage (MA) and innovation that improves patient care and increases medical cost savings, including expanded offerings through its new health services subsidiary, Aledade Care Solutions (ACS). Returning investor OMERS Growth Equity led the round, which also included Fidelity Management & Research Company and other current investors.
– By focusing on its mission and developing a model that succeeds only when practices succeed, Aledade has built a firm financial foundation with a proven unit model and a capital-efficient business that was EBITDA-positive for the second straight year in 2021, with revenue of more than $300 million.
Delivering Value-Based Primary Care
Founded in 2014 by former National Coordinator for Health IT, Farzad Mostashari, Aledade began building ACO networks for independent physicians through the Medicare Shared Savings Program, but now also partners with commercial payers across the country. Aledade now partners with more than 1,000 independent primary care practices, including more than 140 federally-qualified health centers, comprising more than 11,000 physicians in 36 states and the District of Columbia. Aledade’s nearly 150 value-based care contracts, including 98 Medicare contracts, collectively cover more than 1.7 million patients and $17 billion in total health care spending.
“When we started Aledade nearly a decade ago, we made a bet that if we empowered primary care doctors with the right insights, technology, and contracts that paid for value, we could improve patient outcomes, cut wasteful spending, and create a scalable business model for these practices and Aledade to thrive,” said Farzad Mostashari, MD, CEO and co-founder of Aledade. “With this financing, Aledade is extremely well-positioned in this market environment to accelerate our work to meet patients where they are, especially in Medicare Advantage, and seize new opportunities to expand wraparound patient care services. Difficult market conditions can create exceptional opportunities for strong businesses to get stronger and that is our plan.”
In Medicare Advantage contracts, specifically, Aledade increased the number of patients served by 85,000 in 2021, bringing the total to more than 200,000 patients covered by MA who receive care through an Aledade ACO. At this scale, a one percent increase in the savings rate attained by Aledade’s risk-bearing physician networks can generate an additional $100 million in revenue — revenue that goes back to practice partners and enables Aledade to invest aggressively in innovation that improves patient care and increases medical cost savings.
To date, Aledade’s model is projected to have created over $1 billion in total savings across the health care system.
