Funding Round to Bolster Aledade’s Medicare Advantage Business
Aledade, which partners with primary care practices on accountable care, 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 to expand offerings through its new health services subsidiary, Aledade Care Solutions.
The Bethesda, Maryland-based company said it was profitable at an operating level 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. Its 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, the company said, a 1 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.
“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, M.D., CEO and co-founder of Aledade, in a statement. “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.”
Aledade said it intends to deliver more direct services through Aledade Care Solutions, 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.
Returning investor OMERS Growth Equity led the round, which also included Fidelity Management & Research Company and other current investors.
