Accolade, a digital health company with a personalized health benefits platform, announced it has signed a definitive agreement to acquire PlushCare, a provider of virtual primary care and mental health treatment.
Under the terms of the agreement, the purchase price of up to $450 million will consist of $40 million in cash, $340 million in Accolade common stock, and up to an additional $70 million of value payable upon the achievement of defined revenue milestones following the closing, according to officials in an April 23 announcement.
Together, the two companies say they intend “to provide more seamless consumer access to care for acute, chronic, and preventive health needs with highly rated physicians, whether delivered through a virtual setting with PlushCare, or through Accolade’s advocacy and navigation solutions that support in-person consultation.”
The addition of a primary care team will extend Accolade’s ability to improve clinical health outcomes for its members and deliver additional cost savings for employers, they stated.
PlushCare’s primary care network includes access for consumers to primary care and internist doctors, and mental health experts via the smart phone. The team of physicians—trained at the top 50 medical schools in the United States and with an average of 15 years' experience, according to officials—consults with patients by video call, orders and arranges prescription pickup, orders lab work and fulfills all the regular duties of an in-person physician.
Company executives believe that by combining this business with Accolade’s core navigation and advocacy services, and expert medical opinion specialists, augmented by Accolade’s data set that provides a longitudinal view of every patient, “will elevate PlushCare’s business to a new level of patient engagement for their existing consumers and Accolade’s commercial customer base.”
“Healthcare is personal, and the connection between physician and patient is the single most important factor in improving outcomes. PlushCare has successfully built a market-changing, direct-to-consumer model with virtual capabilities that extend Accolade’s member engagement deeper into the healthcare experience,” Rajeev Singh, CEO, Accolade, said in a statement. “By expanding our clinical team of physician medical directors, nurses, specialists, and benefits experts to include primary care doctors and mental health experts, we are responding to customers who are asking Accolade to expand our capacity to serve their employees at every step of their care journey. Equally important, we extend our capacity to deliver measurable value for employers seeking coordinated, longitudinal care at scale for their workforce.”
Singh added that up until now, Accolade’s clinical interventions have been designed to provide personalized guidance to members to support their healthcare decision-making as they access care. But now, with the addition of PlushCare, “we will begin delivering care directly to our members, an essential step to achieving the vision of driving consistent and comprehensive improved health outcomes, while further reducing healthcare cost trend line. Virtual primary care is not a replacement for traditional brick-and-mortar care. We believe that a collaborative approach to primary care is needed with a singular focus on doing what’s best for the member and delivering an exceptional and seamless experience regardless of where members choose or need to get there. This is the future of healthcare.”
Accolade went public last year, at which point the company raised $220 million at a valuation of $1.2 billion. Steve Barnes, the company’s chief financial officer, commented that the addition of PlushCare will expand Accolade’s “addressable market nearly five-fold to more than $200 billion and create new opportunities for long term revenue growth. We plan to invest in integration between our companies to maximize the value of our combined offerings, extend PlushCare’s offerings into Accolade’s traditional enterprise customer base, and continue to grow PlushCare’s core consumer membership,” he noted.
