Health tech startup Stellar Health raised $10 million in an oversubscribed Series A funding to help health care providers improve their value-based care goals.
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The New York City-based company’s funding was led by Point72 Ventures, with participation from existing investor Primary Venture Partners. Stellar Health raised $4.9 million about a year ago in a seed round led by Primary Venture. The total raise since the company’s inception in 2018 is $15 million, Stellar Health CEO Michael Meng told Crunchbase News.
Value-based care, typically used with Medicare patients, emphasizes keeping people healthy while rewarding primary care providers for providing and coordinating the necessary care for positive health outcomes.
Stellar Health’s point-of-care workflow platform helps PCPs earn additional revenue and improve performance against value-based care goals.
One of the problems the company identified is that no one thinks about the doctors and staff who coordinate all of the daily patient workflow, such as historical claims, pharmacy requests, lab work, testing and billing, Meng said.
“If you talk to doctors, they will tell you that all of those extra ‘chores’ take up time, and they are not paid for those activities until 18 to 24 months later,” he said. “We translate those activities into bite-sized, granular actions and pay them a granular payment every time they do something, so the compensation is immediate.”
Stellar Health partners with payors to create a technology-driven incentive pool that rewards PCPs in real-time upon the completion of specific value-based clinical actions, such as recording the results of a test or scheduling for preventive screenings.
Meanwhile, the company plans to use the new round of funding to expand and accelerate product development and engineering, as well as support operations including the expansion of services to new markets, Meng said.
Every six months, the company gains about four new contracts, and by the end of 2020, he expects to have 100,000 patient lives managed through the platform.
“A lot of it is to deliver on the existing contracts and focus on performance metrics,” he said.
Stellar Health has developed a robust payor and provider network across 11 states in the U.S., and one of the goals for 2020 is to double its team to 40 employees, Meng said. The company is looking to hire across multiple departments including engineering, product, operations and business development.
Illustration: Li-Anne Dias