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Exclusive: Tuesday Health nets $60M for end-of-life care

May 21, 2024
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Illustration: Gabriella Turrisi/Axios

End-of-life care company Tuesday Health raised $60 million, led by Welsh Carson-owned Valtruis, CEO Jim Wieland tells Axios exclusively.

Why it matters: Hospice remains a blind spot for Medicare Advantage as the only Medicare service that over half of enrollees can't currently access.

Zoom in: Blue Venture Fund, Mass General Brigham Ventures and CareSource participated in the unlabeled round.

  • Funds will fuel hiring and help the company open in its first market this July in Ohio.
  • Wieland, who says the capital puts Tuesday "well into next year," does not foresee raising again "anytime soon."

The big picture: "American health care, from medical education all the way through to the payment system, generally does not encourage doctors to listen to dying patients' needs or priorities," former Axios reporter Bob Herman wrote.

How it works: Formed by Valtruis, Chicago-based Tuesday works with Medicare and Medicare Advantage, accountable care organizations (ACOs) and subspecialty providers such as nephrology and oncology groups.

  • The company then identifies plan members likely to die in the next 18–24 months who face serious obstacles to daily living — often people who frequently visit the emergency room, for example.
  • Tuesday offers these patients and their families palliative care services such as hospice referrals, virtual nursing support and prescription management.
  • The company employs a virtual nursing team of advanced practice providers monitored by a registered nurse.

Flashback: Private equity firm Welsh, Carson, Anderson & Stowe (WCAS) created Valtruis with $300 million in 2021 to power a series of value-based health care entities like Tuesday, which it founded in 2023.

Inside the room: Tuesday's strategic partnerships with Ohio-based CareSource and Ohio's Hospice, a not-for-profit organization that covers a large portion of the state, led the company to launch its first program in the Buckeye State, per Tuesday Health head of clinical delivery Mihir Kamdar.

By the numbers: Hospice care is an estimated $34.5 billion market expected to reach $64.7 billion by 2030, per Grand View Research.

  • Private equity has poured dollars into hospices, with 30% to 50% of all home health and hospice transactions in 2021 involving PE firms, according to M&A advisory firm The Braff Group.
  • That figure is on the rise, per a 2021 analysis that found that the number of hospice agencies owned by PE groups rose from 106 (of 3,162) in 2011 to 409 (of 5,615). About three-quarters of PE-acquired hospices were nonprofits.

Between the lines: A 2022 report from watchdog group Private Equity Stakeholder Project suggested that for-profit hospice agencies have been tied to lower standards of care, fewer patient visits, higher rates of hospitalization and poorer worker compensation than their nonprofit counterparts.

What they're saying: "There's really no benefit to pre-hospice care right now, which is why you have sort of this cliff experience for patients and families," says Valtruis managing partner Anna Haghgooie.

  • "It's also a cliff for providers who don't get to work with patients and families to create the right structure around engagement and delivery as an on-ramp to hospice," Haghgooie adds.
  • "Our goal is to create a reimbursement model that allows for high-quality care," she says.

State of play: The palliative and end-of-life care sector is dominated by a few legacy players such as Elevance and Walgreens, but startups have been dipping toes into the space.

  • Elevance (formerly known as Anthem) in 2022 acquired the nation's largest non-hospice community-based palliative care provider, Aspire Health.
  • CareCentrix, purchased in 2022 by Walgreens, in 2020 acquired palliative care company Turn-Key Health.
  • Hospice care startup Guaranteed in 2022 raised a $6.5 million seed.
  • Betterleave, an employer-facing bereavement support startup, last fall closed a $2.4 million seed.

What's next: "In the event that hospice gets carved into Medicare Advantage, we want to be ready," says Wieland.

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