Exclusive: CareHarmony raises $15M for VBC coordination
Virtual care coordination startup CareHarmony collected $15 million in Series A funds as it seeks to help hospitals embrace value-based care, CEO Gokul Mohan tells Axios exclusively.
Why it matters: Data-driven and outcomes-oriented companies like CareHarmony are benefiting from the shift to value-based care (VBC), which prioritizes quality and thus depends on rich data.
Deal details: Maverick Ventures led the fundraise and Nashville Capital Network participated, bringing CareHarmony's total financing to just over $17 million.
- Alongside the funding, Maverick managing director Prateesh Maheshwari joined CareHarmony's board.
- Pitchbook values the company at roughly $71 million, but Mohan declined to confirm the figure.
How it works: Nashville, Tenn.-based CareHarmony uses machine learning to collect and analyze patient data to provide a wide array of care coordination services, instead of focusing on the 1-2% of patients with the most complex health issues.
- CareHarmony partners with health systems using risk-based contracts and uses a per-patient-per-month payment model.
- It tracks preventive health quality measures, total cost of care, care gap closures and basic clinical indicators associated with conditions such as congestive heart failure and diabetes.
What's next: Several would-be acquisition targets have reached out to CareHarmony, but the company is heads down and focused on scaling, according to Mohan.
- The company will use the funds from its Series A to hire more talent and hone its technology.
- Regarding a potential Series B, Mohan says CareHarmony plans to reevaluate market conditions in roughly 12-18 months.
- "Just because market dynamics change doesn’t mean patients don’t still need care," Mohan says.
By the numbers: CareHarmony has served more than 40 hospitals and health systems and 3,000 providers across 25 states.
State of play: Health systems saw fee-for-service revenues drop during the pandemic, turning the molasses-like slog towards value-based arrangements into a steady drip.
- "It’s a boulder we’re still pushing uphill, but we’re closer to the top than we were a decade ago," says Mohan. "The hill isn't as steep as it was before, but we’re not headed down yet."
Context: Several patient care coordination companies have executed successful roll-ups in recent years and attracted significant funding. For example:
- San Francisco-based Memora Health, which in February raised $40 million in a round led by Transformation Capital.
- Boston-based PatientPing, which Bamboo Health (formerly known as Appriss Health) acquired last year for $500 million.
- San Mateo-based Notable, which last fall raised $127 million in Series B funding with an undisclosed amount of support from Microsoft CEO Satya Nadella.
What they're saying: Mohan says while many legacy health care companies offer basic care coordination services to a minority of patients with chronic conditions, CareHarmony collects detailed data on all patients to identify those in need of social or clinical support, such as transportation assistance or an insulin support program.
- "Making sure we get the right intervention to a patient at the right time is critical," says Mohan, adding that roughly a quarter of all interventions it provides are tied to social factors.