Axios Pro: Health Tech Deals

March 08, 2022

Axios Pro Exclusive Content

Hello, Health Tech readers. It's Tuesday.

👭 Situational awareness: It's International Women's Day, folks. ICYMI, check out Erin's live conversations with Everly Health's Julia Cheek and CRV's Kristin Baker Spohn.

  • Plus, Sarah catches up with Homeward's CEO at ViVE.

🏠 1 big thing: Homeward dispatch from ViVE

Illustration of a tractor plowing a field in the shape of a heart monitor that is petering out

Illustration: Sarah Grillo/Axios

“We’re in a crisis of access and it’s not getting better,” says Jennifer Schneider, the CEO of Homeward, which emerged from stealth yesterday with an initial $20 million investment from General Catalyst.

Why it matters: Schneider, who helped steer Livongo through its IPO and $18.5 billion merger with Teladoc, has focused her new venture on rearchitecting care delivery for rural communities.

  • Investors have written large checks to fuel the shift to value-based care, but activity has centered around urban markets.
  • Meanwhile, patients in rural markets are facing poor and costly health outcomes.
  • Rural health care markets have a 23% higher mortality rate compared with urban markets, with half the number of primary care doctors and one-eighth the number of specialists, Schneider tells Sarah at ViVE.

What she’s saying: Value-based care is the only model that will succeed in rural communities, according to Schneider.

  • A lack of providers and a reliance on broadband for telehealth are among factors that have held back progress historically.
  • And, while primary care has been front and center of emerging value-based care models and investment, taking responsibility for the total cost of care is crucial, considering specialty care accounts for 88% of costs, she added.
  • “The fee-for-service model can’t stay alive in rural (markets). There are not enough specialists.”

How it works: Homeward plans an in-network, value-based care platform that will partner with PC and specialty providers and Medicare Advantage plans.

  • The hybrid model encompasses virtual, in-home remote patient monitoring, in-person care via mobile care units, and referrals to local facilities.
  • Homeward will rely on cellular connectivity to reach the most remote individuals. “A lot of digital health tools have relied on broadband; that’s no longer necessary.”
  • Schneider expects Homeward to go live by end of summer.

Yes, and: Hyper-personalization is key to achieving scale.

  • “So many [startups] build a solution without deeply understanding the pain points that they are trying to solve,” she said. “Rural is not everyone standing around with a pitchfork and tractor.”

Context: Schneider partnered with General Catalyst to assemble the Homeward team.

  • Hires include former Livongo executives Amar Kendale, Bimal Shah, and Brian Vandenberg, as well as Aaron Friedkin from Blue Cross Blue Shield of Michigan.
  • Homeward marks the debut investment from General Catalyst's new $800 million Creation fund.

Of note: Homeward isn't the only startup led by a former Livongo leader.

  • Glen Tullman, founder and former CEO of Livongo, is now steering Transcarent, a consumer-directed digital health company valued at $1.62 billion earlier this year.
  • General Catalyst, an early investor in Livongo, also backs Transcarent.
  • Elsewhere, Russell Street Venture's Brad Smith launched rural health care navigator Main Street Health, with backing from Oak HC/FT last summer.

The bottom line: Investor and entrepreneurial eyes are zeroing in on health equity, particularly rural health care, which is one of the most broken parts of the system.

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