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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Morgan Health wants employers to lead the push for preventive and holistic care, with tech as an enabler, managing director Cheryl Pegus told Erin on Tuesday at a meeting on the sidelines of the J.P. Morgan Healthcare Conference.

Why it matters: Pegus said the cornerstones of Morgan Health's "whole health" vision are investments in behavioral health and women's health — two sectors commanding significant investor attention. 

What she's saying: Pegus, previously Walmart's executive vice president for health and wellness, said she joined Morgan "not just for more investing, but to create pillars that improve health care."

"Whole health is what we're interested in," Pegus said. "Fewer point solutions and a more holistic approach. Personalization matters."

Morgan's existing contracts are tied to outcome improvements, like reductions in emergency room visits and addressing specific health equity gaps, she added.

"Fee for service isn't working," Pegus said. "COVID proved that. We've got to incentivize value-based care" not only to improve patient outcomes but also "to get clinicians excited about going back to work."

The big picture: When it comes to Morgan Health's approach to the tech component of health tech, Pegus stressed that she views "tech as an enabler, not as a me too" — meaning she aims to invest in tech when it helps enhance specific approaches.

Zoom in: Pegus said behavioral health is riddled with low-acuity point solutions, noting that Morgan seeks to invest in companies aiming to address the higher-severity end of the spectrum using both robust telehealth and a team-based approach.

And when it comes to women's health, Morgan is especially interested in providers focused on menopause, given that women in that phase of life are at significantly higher risk for diseases including diabetes, she noted. 

Menopause is highly correlated with metabolic disease, decline in cardiovascular health and osteoporosis, Evernow CEO Alicia Jackson told Erin at HLTH last year.

Reality check: The U.S. health care system has been slow in its shift toward value-based care and its emphasis on long-term outcomes, with half of Americans getting their health insurance through their employer and many changing employers every few years.

Still, Pegus sees employers as having a key role to play in the sector, noting that businesses can offer robust health insurance as a means of retaining talent.

"If you're an employer, you're committed to improving health locally and nationally," Pegus said. "Every employer should be ensuring preventive care is done."

"We as employers must come to the table with these asks," Pegus added.

1 big thing: Morgan Health pushes holistic care

Bag of money with health care cross on it 

Maternity care provider Oula has raised $19.1 million in Series A funds for its hybrid model uniting midwives and obstetricians, CEO Adrianne Nickerson tells Erin exclusively.

Why it's the BFD: Pregnant people in the U.S. die at more than three times the rate of most other high-income countries, and the death rate of pregnant Black people is nearly three times higher than that of white people.

Yes, and: A 2020 study published in The Lancet Global Health suggested that scaling up midwife services — one of Oula's core goals — could help fill gaps in health care access and reduce maternal mortality.

"Midwifery should be part of any pregnancy model," says Leslie Schrock, a serial women's health investor and author. "It’s what families want and deserve. They take more time in appointments, and they’re trained to focus on the whole person."

"Walking into an appointment with them feels like half therapy, half medical treatment," Schrock adds.

Deal details: 8VC led the round, which brings Oula's total funding to $22.3 million. 

Insiders including Chelsea Clinton's Metrodora, the Female Founders Fund, Collaborative Fund and Alumni Ventures participated in the round.

Although Nickerson declined to disclose the company's current valuation, she tells Axios it is 8x higher than its post-seed raise figure, which PitchBook estimated at $8.2 million.

The fresh funds will go toward expanding Oula's postpartum care offerings and adding sonography to its list of services. The company will likely raise its Series B sometime this year.

State of play: New York City-based Oula joins a flock of new and freshly funded companies focused on women's health and reproductive care including:

Virtual maternal and family health unicorn Maven Clinic in November collected $90 million in Series E funds.

Future Family, a startup combining fertility financing and care support, in April raised $25 million in Series B capital at a valuation of $80 million. 

Hybrid women's health care provider Tia in 2021 raised $100 million in Series B funding.

How it works: Oula, which operates two clinics in New York City, offers a combination of in-person and virtual maternal care.

It accepts most major insurance plans, including Aetna, Cigna and Blue Cross Blue Shield (commercial and Medicaid). Oula patients' median age is 34.

Services include prenatal visits, virtual classes and visits, delivery at Mount Sinai West medical center, and virtual and in-person postpartum check-ins.

The other side: Oula does not currently offer two services Schrock says are extremely helpful for pregnant people and families: home visits and pelvic floor therapy.

The company refers patients to its network of providers for the latter.

The backstory: Nickerson started Oula after co-founding and leading Robin Care, a health tech company focused on cancer care, and she says the overlaps are striking.

"You might not think of oncology and pregnancy as similar, but both are all-consuming — they take over your life, and the challenges go beyond just the clinical," she says.

One fun thing: Oula is pronounced "oo-la," like "doula," to emphasize the importance of focusing on pregnant peoples' experiences during pregnancy and childbirth.

What they're saying: Nickerson says Oula's model aims to be affordable and inclusive by accepting insurance, offering culturally competent care and "centering women and their voices."

"I started family planning in my 30s," Nickerson adds, "and I was floored that we take women’s voices away from care and have a really paternalistic system.

"We are focused on creating something accessible. We didn’t want to be a 1% model."

2. The BFD: Oula raises $19M Series A  

Illustration of a baby onesie printed with the image of a $100 bill.

Digitail, a veterinary practice management SaaS, has raised $11m in Series A funding. Atomico led and was joined by Gradient, byFounders and Partech. https://axios.link/3Xo4pxN 

Pinnacle Clinical Research, a San Antonio-based portfolio company of LongueVue Capital, has acquired South Texas Research Institute, a clinical research site known for its work on nonalcoholic steatohepatitis (NASH). https://axios.link/3ZniQ74

3. Deals o' the day

Zocdoc has named former Circulo Health senior UX designer Eva Kang senior product designer.

Accolade has named former Amazon Care BD manager Krista Andrews senior director of customer success.

4. It's Personnel

🤝 Situational awareness: Mark Cuban's Cost Plus Drugs has announced a partnership with PBM RxPreferred Benefits, giving employers that use RxPreferred access to Cost Plus Drugs medications through their plan. 

☔ Erin is approaching the end of a rainy but energizing JPM week, which included meeting fellow Trekkies at a cocktail event last night. 

❤️ Thanks for reading, and extra thanks to newsletter editor George Moriarty and copy editor Brad Bonhall. Please ask your friends and colleagues to sign up.

January 12, 2023

1 big thing: Morgan Health pushes holistic care