BETHESDA, Md., June 6, 2022 (Newswire.com) - Today, Aledade announced it has closed a $123 million Series E funding round to support investments in value-based care for more seniors covered by Medicare Advantage (MA) and innovation that improves patient care and increases medical cost savings, including expanded offerings through its new health services subsidiary, Aledade Care Solutions (ACS). Returning investor OMERS Growth Equity led the round, which also included Fidelity Management & Research Company and other current investors.
"When we started Aledade nearly a decade ago, we made a bet that if we empowered primary care doctors with the right insights, technology, and contracts that paid for value, we could improve patient outcomes, cut wasteful spending, and create a scalable business model for these practices and Aledade to thrive," said Farzad Mostashari, MD, CEO and co-founder of Aledade. "With this financing, Aledade is extremely well-positioned in this market environment to accelerate our work to meet patients where they are, especially in Medicare Advantage, and seize new opportunities to expand wraparound patient care services. Difficult market conditions can create exceptional opportunities for strong businesses to get stronger and that is our plan."
By focusing on its mission and developing a model that succeeds only when practices succeed, Aledade has built a firm financial foundation with a proven unit model and a capital-efficient business that was EBITDA-positive for the second straight year in 2021, with revenue of more than $300 million. Aledade now partners with more than 1,000 independent primary care practices, including more than 140 federally-qualified health centers, comprising more than 11,000 physicians in 36 states and the District of Columbia. Aledade's nearly 150 value-based care contracts, including 98 Medicare contracts, collectively cover more than 1.7 million patients and $17 billion in total health care spending. In Medicare Advantage contracts, specifically, Aledade increased the number of patients served by 85,000 in 2021, bringing the total to more than 200,000 patients covered by MA who receive care through an Aledade ACO. At this scale, a one percent increase in the savings rate attained by Aledade's risk-bearing physician networks can generate an additional $100 million in revenue — revenue that goes back to practice partners and enables Aledade to invest aggressively in innovation that improves patient care and increases medical cost savings.
"Aledade is differentiated among primary care innovators because of its model, which is centered on physician independence, helping to consistently deliver improved clinical quality and outcomes - while also growing shared savings across the healthcare ecosystem. OMERS Growth Equity has invested in Aledade's series C, D and now E funding rounds, and we are excited to continue to partner through its next phase of growth. We share in Aledade's conviction that technology can and should transform the healthcare experience for patients, physicians, and payers," said Teresa Lee, Managing Director at OMERS Growth Equity.
Aledade's growth has been driven by the success of its tech-enabled, physician-led model, in which the company shares in the reward of both government and commercial value-based contracts with participating independent practices. Aledade practices have improved the quality of care and health outcomes while controlling costs in all types of public and private payer contracts. To date, Aledade's model is projected to have created over $1 billion in total savings across the health care system.
Aledade's business advantages, including its advanced data and analytics, broad network of nationwide primary care physicians, and value-based incentive model, uniquely position the company to build on its core platform, as evidenced by the successful pilot demonstration and subsequent acquisition of Iris Healthcare earlier this year. Aledade intends to deliver more direct services through ACS, empowering and extending the capabilities of primary care practices, improving patient health, and driving long-term financial returns. Additionally, Aledade will continue to invest in the expansion of its value-based care model with health plans across the country, including growing its strategic partnerships with MA plans to improve outcomes and quality for more seniors.
Founded in 2014, Aledade is the leading physician enablement company helping independent practices, health centers, and clinics deliver better care to their patients and thrive in value-based care. Through its proven, scalable model, which includes cutting-edge data analytics, user-friendly guided workflows, health care policy expertise, strong payer relationships, and integrated care solutions delivered through Aledade Care Solutions, Aledade empowers physicians to succeed financially by keeping people healthy. Together with more than 1,000 practices in 37 states, Aledade shares in the risk and reward across more than 140 value-based contracts representing more than 1.7 million patient lives under management. To learn more, visit www.aledade.com or follow on Twitter or Facebook.
Cautionary Note Regarding Forward-Looking Statements
We provide the foregoing cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied in this press release. Forward-looking statements are generally identified by the use of such terms as "may," "could," "expect," "intend," "believe," "plan" "estimate," forecast," "project." "anticipate," "to be," "to make" or other comparable terms. All forward-looking statements by us are subject to risks and uncertainties and are not guarantees of future performance. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These statements include the impact of the acquisition announced in this press release, as well as our expectations about future revenue and profitability.
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