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Elder-focused primary care provider Greater Good Health raised a $20 million Series A to build its first clinics, CEO Sylvia Hastanan tells Erin exclusively.

Why it matters: Greater Good hopes its nurse practitioner-led model and value-based incentives can help address the dire shortage of primary care providers as the older population continues to grow.

Details: Flare Capital Partners led the round.

Previous backers LRVHealth, Health Velocity Capital, Martin Ventures, and Optum Ventures joined.

In addition to building clinics, the funds will be used to hone Greater Good's tech stack and build a playbook for future expansion.

Hastanan foresees the startup raising a Series B in 2025.

How it works: Based in El Segundo, California, Greater Good partners with health plans and provider groups to help them shift to value-based arrangements.

"We build programs that are integrated into their infrastructure," says Hastanan. "Our nurse practitioners lead those programs, see their patients, and our operators manage them."

Greater Good is putting the approach to work building three elder-focused primary care clinics in Montana as part of a value-based care partnership with Humana.

Be smart: Recent legislation in several states grants nurse practitioners (NPs) — projected to be the fastest-growing occupation within a decade — full authority to oversee primary care.

What they're saying: "We think [NPs] are capable of managing risk when trained and brought into the model properly and, besides primary care providers, they're some of the only providers who can do this independently," says Flare Capital partner and Greater Good investor Victor Lanio.

Flashback: Before starting Greater Good, Hastanan was an executive at large health care incumbents including GE Healthcare, DaVita and Optum.

"I noticed that nurse practitioners were being tapped to go into [patients'] homes, to do virtual visits, and to serve as a bridge between doctor's visits," says Hastanan.

"But they were turning over a lot and the retention strategies just weren't there."

State of play: Greater Good's approach is similar to those deployed by other senior primary care clinic operators, many of which have seen sharp market interest as the U.S. population grows older, faster. For example...

One Medical — now owned by Amazon — in 2021 bought value-based senior clinic operator Iora Health in a deal worth an estimated $2.1 billion.

CVS Health this year bought Oak Street Health, another senior-focused primary care business, for an estimated $10.6 billion.

Yes, but: Where those companies were focused on urban markets, Greater Good is homing in on rural areas.

"I think around the edges there's tons of opportunity and [it's] maybe more obvious for us to start there," says Hastanan, adding that the company is estimating a roughly three-year timeline to develop its model.

"It takes a long time to change behaviors. We want to grow slow to grow fast," Hastanan says.

1 big thing: Greater Good nets $20M for senior VBC

Illustration of a cane forming the center staff of a caduceus.

Dallas-based staffing company AMN Healthcare acquired staffing business MSDR for $300 million.

Why it's the BFD: Though labor shortages continue to burden the overall sector, the U.S. health care staffing industry is contracting, which is likely to buoy continued dealmaking, Aaron writes.

Details: The deal will be funded with a combination of cash on hand and borrowings on a revolving credit facility.

MSDR consists of Medical Search International (MSI) and DRW Healthcare Staffing (DRW), which focus on staffing in areas like psychiatry, anesthesia, radiology and surgery.

CEO of DRW, Chris Wang, will remain with the business as president of MSDR.

MSDR generated $104 million in revenue in 2022 and has year-to-date annualized 2023 revenue of around $155 million.

Wells Fargo Securities and Sheppard Mullin provided financial and legal advice to AMN, respectively. MSDR was represented by financial adviser Nolan & Associates and law firm Morgan Lewis.

Between the lines: Demand, particularly for travel nurses, has been lower than industry players expected, particularly as health care organizations increasingly look to make permanent hires, AMN CEO Cary Grace said during its Q2 earnings call.

Nurse staffing company ShiftMed CEO Todd Walrath told Axios he expects to see a shakeout as smaller players struggle to compete for market share.

2. The BFD: $300M staffing deal

Illustration of a cup of tea at a computer desk with a red cross for the teabag

Want more health tech deals? Check out the Axios Pro Deals Tracker beta.

• Signos, a Burlingame, Calif.-based metabolic health platform, raised $20m in Series B funding, led by Cheyenne Ventures and GV. www.signos.com

• Poppins, a French video game developer for children with neurodevelopmental disorders, raised €8m in unlabeled funding led by Eurazeo and joined by Verve Ventures, Allianz France, and HEC Ventures. https://axios.link/3S4v5V2

• Lovell Minnick Partners made a majority growth investment of an undisclosed amount in ACU-Serve, an Akron, Ohio-based revenue cycle management company for health care providers focused on post-acute, home-based care. https://www.acuservecorp.com/

• Stonepeak agreed to buy Akumin (Nasdaq: AKU), an outsourced provider of diagnostic imaging services, via a prepackaged Chapter 11 bankruptcy process. https://axios.link/4704SuZ

• Walgreens (Nasdaq: WBA) agreed to pay $192.5m to settle a class action lawsuit related to its failed 2015 effort to buy rival drugstore chain Rite Aid.  https://axios.link/3PYQbBs

• 1315 Capital, a Philadelphia-based private equity firm focused on health care services companies, raised over $500m combined for its third flagship fund and first "emerging growth buyout" fund. www.1315capital.com

3. Deals o' the day

• Paralympian Amy Dixon joined Eyecbetter, a La Quinta, Calif.-based virtual vision care company, as director of patient advocacy. https://axios.link/3s05jGP

• Kirk Thelander, formerly holding leadership roles at AloeMD, Greenbrook TMS NeuroHealth Centers, Freespira and Neuronetics, joined GrayMatters Health as chief commercial officer. https://axios.link/46AJfSe

• Neil Makhija, formerly in a leadership role at Notable, joined Ventra Health as its director of client success. https://ventrahealth.com/

• Lilly Wellenbach, formerly in a leadership role at Komodo Health, joined Particle Health as director of product strategy. https://www.particlehealth.com/

4. It's Personnel

🏥 Why U.S. health care isn't better at getting better — Forbes

📉 Weight-loss startup Calibrate is selling itself to a PE firm as patient complaints mount — Insider

🌎 The economic case for universal basic health care  — STAT

⚕️ A pandemic windfall turns into a hangover for a high-flying health care startup — The Information

5. Your daily dose

🎃 🍞 🍕 Aaron spent his Sunday making homemade pizza (again) and a chocolate chip pumpkin bread. 

✔️ Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece. Please ask your colleagues, friends, and family to sign up.

October 23, 2023

1 big thing: Greater Good nets $20M for senior VBC