Former Obama admin tech official, Athena Health exec partner on health insurtech
(Bloomberg) -- A group of former Obama White House officials and executives from health-technology company Athenahealth Inc. will begin selling private health insurance to U.S. senior citizens, backed by $360 million in venture capital funding.
The company, called Devoted Health, will sell Medicare Advantage plans in Florida and wants to expand its offerings nationally. The insurance plans are a private-sector alternative to traditional Medicare, subsidized by the government.
The company was founded last year by Chairman Todd Park, former chief technology officer for the Obama administration, and Chief Executive Officer Ed Park, a former Athenahealth executive. The men are brothers. Head of technology DJ Patil previously served as the U.S.’s chief data scientist during the Obama administration, and Chief People Officer Leslie Brunner was Athenahealth’s senior vice president of people and processes.
Devoted raised a first round of funding last year worth $61.95 million from investors including Venrock and F-Prime Inc. Venture firm Andreessen Horowitz led a $300 million B round announced Tuesday. Bryan Roberts, a partner at Venrock, is on Devoted’s board, and Bob Kocher, another Venrock partner, is the company’s chief medical officer.
Devoted declined to comment on the company’s valuation after the latest round of fundraising. The company’s early funding, a $7.4 million seed round in the second quarter of 2017, came from the Park brothers and Venrock.
The company plans to offer seniors what it says is simpler and better-coordinated health-care using technology the founders have built from scratch. Devoted will offer a 24-hour call center, home-visits and automated care pings that alert a senior’s family doctor when something goes wrong. It has also built its own claims processing service.
The idea that better managed care can prevent emergencies, illnesses, and excess costs isn’t new. But Lisa Bielamowicz, president of health-care consulting firm Gist Healthcare LLC, said it’s an idea that continues to perform well in Medicare.
“These are folks who are well known to the industry,” said Bielamowicz. “You couldn’t assemble a smaller group of bigger names.”
The technological strength of the project is what attracted Andreessen Horowitz, with investments in Airbnb Inc., Facebook Inc., and Lyft Inc., according to Vijay Pande, who leads the firm’s investments in biology and computer-science companies. Pande will have a seat on Devoted’s board.
Devoted Health is Venrock’s first health-insurance bet.
“Today most insurance companies are reviled by both patients and physicians,” said Roberts, who has been with Venrock since 1997. “What happens in the world if the person who’s responsible for paying for and coordinating a lot of care is actually viewed as a trusted partner by both patients and the docs?”
Devoted will be one of thousands of privately run Medicare Advantage plans, which insure more than 20 million people in the U.S. The plans collect a fixed fee from the government for a person’s total care.
Patil said that doctors who partner with Devoted will share in the cost savings from keeping patients healthy. If their patients are having lots of problems, Devoted works with the doctor to address the issues. If that fails, underperforming doctors are removed from the network.
Patil said that parents of a handful of employees are already signing up.
“I’ll be honest, it’s awesomely terrifying,” Patil said.