We got an exclusive look at the financials of Privia, an under-the-radar upstart taking on the primary care industry
- We're starting to get a better understanding of the financials of primary-care companies looking to go national.
- In January, clinic-operator One Medical made its public market debut, surging in its first day of trading.
- Business Insider just got a look at some of the financials for Privia Health, a primary-care company that manages 660 practice locations across the US.
- According to Privia, the company is expecting to make $1.3 billion in gross revenue this year. The company said it was "meaningfully" profitable in 2019.
- Visit Business Insider's homepage for more stories.
Investors are betting millions that primary-care companies can become businesses with a national reach.
Some, like One Medical, charge an annual fee to patients or employers and rely on building new offices and employing doctors directly. Others, like VillageMD, bring in existing primary care practices with existing patients, employing some doctors and partnering with others.
Adding evidence that investors are embracing the new models, One Medical went public in January, and it currently trades at a $2.8 billion valuation.
Then, there are companies like Privia Health. Privia's model differs from One Medical in a few key ways. For one, Privia works with existing practices, rather than building out its own new ones. The medical groups that staff the practices aren't owned by Privia.
Instead, Privia partners with them and provides one central way to get contracts with health plans. Privia is paid a management fee for the service that comes out of the revenue the practices bring in. Privia now works with 2,600 healthcare providers across 660 locations. In all, they care for about 2.6 million patients.
Based on that footprint, the company expects to make $200 million in net revenue this year, off $1.3 billion in gross revenue, in 2020. It says it was "meaningfully" profitable in 2019 as measured by Ebitda, a gauge of profits that excludes some expenses.
Arlington, Virginia-based Privia raised $400 million in 2014 in a Goldman Sachs-led round of funding that also involved other investment firems. The move brought Privia under the fold of Brighton Health Group, a holding company whose other investmentsfocus on health plans.
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Investors are betting big on national primary care models
When One Medical filed to go public with the US Securities and Exchange Commission in January, its filing gave a comprehensive look at the financials behind a primary care provider with national ambitions.
According to One Medical's filing, the firm had 397,000 members and operated in 77 locations as of September 30, 2019.
The company's net losses deepened as membership climbed, the filing shows. From 2017 to 2018, losses widened from $31.7 million to $44.4 million. For the first nine months of 2019, One Medical's net loss was $34.2 million, and it took in $199 million in revenue over the same period.
For the most part, primary care organizations tend to be privately held organizations, or a part of a larger public healthcare company, making it tricky to get a clear picture of where One Medical's financials sit among other primary care businesses.
For instance, Aledade, a a six-year-old startup that works with independent primary care practices so that they can get paid based on how well they care for patients rather than based on how many visits they have, told Business Insider the company plans to grow its revenue by 97% between 2019 and 2020 to an expected $150 million. It said it expects to be profitable this year.
Aledade and Privia aren't alone at trying to build new approaches to primary care.
Startups are working with doctors to change the way primary care is practiced
In the past few years, a crop of companies has been gaining steam with new approaches, many of which rely on building out new practices. And investors have taken an interest in the model, pouring hundreds of millions in funding into some of the companies.
Read more: Meet the 8 companies changing how doctors get paid and building the future of medicine.
Rather than getting paid for each visit or procedure that a patient needs, startups are looking to change the way primary care is practiced, in many cases working to get paid a large fixed sum each month to take care of all of a patient's health needs.
In many cases, that means seeing fewer patients a year - hundreds, rather than thousands - offering additional services, or making the process of getting an appointment more convenient. It's also meant that some models have focused in on certain populations, such as caring for seniors 65 and over who are enrolled in Medicare Advantage plans or patients that are enrolled in Medicaid as well as Medicare.
Health systems are also taking note. For instance, Utah-based Intermountain Healthcare and Pennsylvania-based Geisinger are taking similar approaches with some of their primary-care doctors. The federal government is planning to pay for care for some Medicare patients in a similar way too.
- Read more:
- A health system hidden in the heart of Pennsylvania thinks it's cracked the code on caring for seniors. And it could be the future of healthcare.
- Meet the 8 companies changing how doctors get paid and building the future of medicine.
- A new kind of doctor's office charges a monthly fee and doesn't take insurance - and it could be the future of medicine
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