Exclusive: Vytalize snags $53m to propel value-based senior care

Vytalize Health raked in $53 million in funding led by Enhanced Healthcare Partners, the company tells Axios exclusively.

Why it matters: The evolution towards value-based health care is slow but inevitable. Vytalize helps Medicare-focused primary care groups succeed under this model of reimbursement.

• Most value-based care startups in primary care focus on larger entities with existing infrastructure, but 40% of the senior population is managed by small independent practices with 10 or or fewer physicians, CEO Faris Ghawi tells Sarah.
• “That is a segment of the market that is difficult to integrate, and we have figured out a playbook [that works]," Ghawi says, noting Vytalize does also partner with some larger medical groups.

Details: The Enhanced-led Series B investment includes $47 million in equity and $6 million in debt, pushing Vytalize to just over $70 million in funding to date.

• MTS Securities was exclusive placement agent on the funding.
• Existing investors Kittyhawk Ventures, Kawn Ventures and North Coast Ventures participated in the round.

State of play: Investors have put their money behind many tech-enabled startups helping to reshape primary care, but it's not a winner-takes-all situation.

• "There are about 25 million traditional Medicare beneficiaries that are not part of value-based care programs," Ghawi says.
• It recently began partnering with Medicare Advantage plans, Ghawi adds, where another 25 million members are transitioning to at-risk programs.
• The market (which has seen its share of flashy IPOs and SPAC deals) consists of players like VillageMD, agilon health and Privia Health, but Vytalize is perhaps most akin to VC-backed Aledade in the way it helps practices take risk.

How it works: Vytalize's all-in-one tech solution helps its primary care partners build value-based programs for Medicare patients.

• Offerings include data analysis, chronic care management, behavioral health integration, remote patient monitoring, along with back-office technology to streamline workflow.
• Vytalize's clinical team supports practices with a virtual and in-home remote clinic.
• Through its MedPilot acquisition, it also inherited last-mile patient engagement capabilities.

Yes, and: Vytalize unlike some peers offers services a la carte — meaning it won’t duplicate existing services.

• Additionally, its “don’t break what’s working” model means it's not coming in to rip and replace a functioning EMR system, for example.
• While many startups require primary care partners to fully hand over core systems and functions, "we don't want to replace existing infrastructure," Ghawi says.
• Vytalize preserves practice independence with no charge to leave the program.

By the numbers: Vytalize is in 16 states today, partnering with 280 practices that manage care for 130,000 senior patients.

• The company has grown its patient base 150% year-over-year.

What's next: The capital infusion will fuel new and existing market expansion, support additional partnerships with MA and commercial plans, new hires and technology investment.

• Strategically, Ghawi says, "we're spending a lot of time today on the rest of the downstream network, integrating with hospitals, nursing homes, specialists, in-home care — outside of the walls of primary care. That's the next 15% to 20% of savings."

The bottom line: The demand for a health care payment model that improves patient care and lowers costs is here to stay. That should translate to continued investor enthusiasm and innovation around value-based care.