Aledade, a company that uses data analytics to help independent physicians move towards value-based care, raised $123 million in Series E funding.
The company said this funding round will allow it to target Medicare Advantage patients and expand its Aledade Care Services subsidiary.
Aledade is valued at $3.1 billion and employs nearly 1,000 people, according to a company spokesperson. It has seen significant growth in its Medicare Advantage patient base, increasing it by more than 70% between 2021 and 2022. Further growth is expected this year.
The company operates in 36 states and in the District of Columbia with more than 1,000 independent primary care practices participating in its value-based care arrangement models.
Co-founder and CEO Farzad Mostashari said growing provider partnerships while expanding the number of Medicaid Advantage patients are pivotal to the company’s overall growth.
“If you have a long-term perspective and you have long-term investors this is not a time to retrench,” Mostashari said. “This is a time to lean in, and that’s the fortunate position we find ourselves in.”
He said many in the industry “were focusing on growth at all costs and burning hundreds of millions of dollars a year, we weren’t.”
In January, Aledade acquired Iris Healthcare, which offers advance care planning software solutions, to bolster the Aledade Care Services subsidiary. It also named Dr. Mandy Cohen, former secretary of the North Carolina Department of Health and Human Services, as the CEO of the health services arm.
The investment comes at a time when the overall number of independent physicians is shrinking. According to data from the American Medical Association, the number of private practice physicians dipped below 50% for the first time since it began analysis in 2012.
“If the goal is to move to a system where we’re rewarding physicians for outcomes, then in fact the natural partner is independent primary care,” Mostashari said. “We don’t buy practices. We don’t build practices. We partner with existing practices.”
OMERS Growth Equity led Aledade’s round, which also included Fidelity Management & Research Company and other returning investors.