Aledade’s accountable care organizations have saved nearly $830 million in unnecessary healthcare spending over the past seven years, new data from the company show.
Independent primary care practices that work with Aledade are expected to receive more than $120 million in direct savings payments across commercial insurers, Medicaid, Medicare Advantage and the Medicare Shared Savings Program (MSSP).
That’s double the amount of savings generated in 2019 despite the financial strain brought on by the COVID-19 pandemic.
Of that savings, $83 million will come from Medicare, an increase of nearly 50% from 2019. These payments will provide a much-needed inflow of revenue to keep practices’ doors open beyond the pandemic, according to the company.
These practices are expected to save Medicare more than $300 million in health care spending in 2020, while delivering care to over 410,000 Medicare beneficiaries.
“What these community docs have done during COVID-19 was nothing short of heroic. It’s not just our 800 primary care practices, it was all of them across the country, however, our practices had the tools to be able to continue to keep their practices running,” Farzad Mostashari, M.D., CEO and co-founder of Aledade, told Fierce Healthcare.
This past year put primary care physicians to the test, Mostashari said. The company’s “uniquely resilient business model” has given it the resources to be able to support practices during the COVID-19 outbreak, he said.
“Our projected savings are a direct reflection of our collective effort and mission as we continue to bring this tested model to more independent physicians across the country,” he said.
Aledade partners with physician practices, health centers and clinics to assist them in building ACOs and other value-based care programs. The start-up now partners with nearly 800 independent primary care practices, including more than 100 federally-qualified health centers, comprising more than 7,800 providers in 31 states.
The company’s technology helps practices identify and better manage their most at-risk patients. Patients of practices engaged with Aledade have fewer emergency department visits, inpatient stays and readmissions; in the most recent year with public results from the Medicare Shared Savings Program, Aledade practices reduced hospital stays by an average of 9%, avoiding more than 10,000 unnecessary hospitalizations.
“The way that these savings are created is by giving patients more. Not less,” Mostashari said. “That means more access to primary care and more attention to wellness and prevention rather than waiting for people to get sick and then patch them up.”
Aledade’s Medicare Shared Savings Program ACOs are projected to save between $197 and $587 per beneficiary, an amount equating to about 25% to 75% of their fee-for-service revenue. In addition to the MSSP program, primary care practices working with Aledade generated an estimated $74 million in total gross savings in commercial contracts, $35 million in Medicare Advantage, and more than $20 million in Medicaid.
Dr. Shawn Purifoy, an independent family physician practicing in his hometown of Malvern, Arkansas said participating in Aledade’s value-based model provided a shared savings payment just when his practice needed it most.
“But those savings don’t just represent financial security, they represent meaningful health improvements for my patients that we were able to achieve together with Aledade’s technology and practice support,” Purifoy said.
Aledade’s rapid growth during the pandemic
To support its partners during the crisis, Aledade procured large shipments of critical personal protective equipment (PPE) and provided expert guidance on the rapidly changing policy and regulatory landscape The company also worked with vendor UpDox to help more practices launch the capability to do virtual office visits.
Aledade’s practices went from nearly zero patient encounters being done via telehealth in 2019 to nearly 40% n 2020. As compared to the historical national average of approximately 19%, about three-quarters of patients in Aledade ACOs completed an annual wellness visit in 2020 as a result of patient outreach, ensuring they received necessary care in the midst of the global health crisis.
In the midst of the pandemic, the startup scored major funding rounds to fuel the growth of its national network of risk-taking primary care practices. OMERS Growth Equity led a $64 million Series C funding round in April which included strategic investors Echo Health Ventures and the California Medical Association, and returning investors Meritech Capital and GV (formerly Google Ventures).
Aledade also scored a $100 million Series D funding round in January backed by Meritech Capital, Tiger Global Management and IVP.
Many other tech-enabled primary care startups have gone public, including Oak Street Health and Privia Health.
Mostashari didn’t rull out the possibility of an IPO for Aledade but said the company is focused on taking on more financial risk and expanding its model.
“We are focused on the mission and if going public will help us achieve our mission more successfully, then that’s what we’ll do,” he said.
He also noted that Aledade’s approach is distinct from Oak Street Health and other primary care companies by working with existing primary care practices and focusing on patient populations beyond Medicare Advantage.