Centivo, a health plan for self-funded employers, acquired virtual-first medical provider Eden Health to broaden its reach with employers and expand to all 50 states.
Through this acquisition, Centivo now serves more than 160 employers ranging from Fortune 100 companies to small businesses, executives said.
Prior to the acquisition, the company served 120 self-funded employers. Centivo reports a 90% growth rate in the past year. "On a combined basis, we will serve up to about 2 million eligible patients through both Centivo contracted clients as well as Eden's contracted clients and partners," Ashok Subramanian, founder and CEO of Centivo, said in an interview.
Eden Health, founded in 2015, is a concierge provider that offers healthcare services to employers and provides primary care, mental health care and care navigation services all through its mobile app.
The company's clinical services will be fully integrated into Centivo, enhancing the company’s virtual advanced primary care practice and broadening its clinical services to include mental health care, urgent care and workplace pop-up clinics, according to Centivo executives.
The acquisition will also integrate Eden Health’s technology, which interweaves its clinicians’ electronic medical record system with its proprietary member app.
Centivo declined to disclose financial details of the acquisition.
The company launched in 2019 with the bold goal of making healthcare "radically affordable" for working America, Subramanian said.
Centivo aims to align the incentives between providers and employers to ensure timely access to care, predictable costs and outcome-based reimbursement for providers. The model enables employers to offer benefits that include no deductibles, free adult and pediatric primary care and predictable co-payments.
"Our target for radical affordability is how do we build a plan that achieves the goal of 75% of people on that plan spending less than $100 out of pocket for all their healthcare needs in a year. Those are our moonshot targets. And, we managed to do that from day one," Subramanian said. "A core tenet of that is centering every member experience around what we call advanced primary care and that's increasingly being delivered through a range of different modalities with virtual being a key part of that."
The company says its approach drives better clinical and financial outcomes. The average annual employee out-of-pocket cost of $409 compared to the industry average of $1,650, according to the company's data. Employers see average savings of 21% to 30%.
Centivo's spending analysis also revealed utilization patterns that enabled healthier member outcomes, including higher primary care visits (+30%) and fewer emergency room visits (-15%) and inpatient admits (-13%).
In the past two years, Centivo has invested in its own native capability for advanced primary care services, he noted. "We also looked at the market to identify partners who could extend our capabilities geographically and extend our clinical capabilities from a product perspective and from a service perspective."
Centivo previously had a commercial partnership with Eden Health as a virtual care provider for its members.
"In the past several weeks we were in discussions with Eden about whether it would make sense to join forces and go to market together as opposed to two separate enterprises," he said.
"There is no better home for a primary care solution like Eden Health than a health plan like Centivo that shares our values, including the primacy of primary care in every patient experience," Matt McCambridge, CEO and co-founder of Eden Health, said in a statement.
McCambridge will support the transition and serve as a senior advisor to the combined organization.
Centivo banked $30 million in funding from Morgan Health, the healthcare arm of JPMorgan Chase, back in 2022 as part of an extended series B-1 financing round. Eden Health picked up $60 million in series C funding in 2021, backed by growth stage investor Insight Partners, Amigos Health, Aspect Ventures, Company Ventures, Flare Capital, Flexcap Ventures, Max Ventures and PJC.
Centivo's growth comes amid critical challenges with primary care access in the U.S.
"We are witnessing primary care access problems unlike anything we’ve experienced in our lifetimes. Our system is plagued by chronic shortages in primary care access due to decades of under-investment and misaligned incentives,” Subramanian said.
A well-integrated, primary care-centered health plan model can help shift primary care compensation away from fee-for-service and toward a value-based, prospective payment model that frees clinicians from fruitless administration, enhances patient access, and effectively aligns employer, employee and provider incentives, according to Centivo.
"We see some immediate, positive synergies. The first is the ability to move from having two separate clinical teams to one clinical team, and that clinical team will take advantage of all the tools and analytical capabilities and members/patient experience capabilities that Eden has helped develop over the last several years," Subramanian said.
That analytical approach helps to provide insights to identify gaps in care, improve care coordination and drive better outcomes for employers and their employees, he added.
With Eden Health under its wing, Centivo will focus on meeting unmet needs in the market. "An example of that will be a virtual urgent care product, in addition to the virtual primary care product that we have, and the mental health product that Eden has because we do believe there is there remains in the market this underlying need for a service that is less transactional than something like Teladoc. A service that is able to meet patients where they are for those who don't want to shift their primary care relationship to a virtual provider, and so want to have a community-based primary care relationship."
He added, "Those three things — technology, mental health and urgent care, when supplemented with the fact that we are already doing best-in-class primary care is really going to bring to the table a best-in-class virtual solution to the market."
Centivo is doubling down on its approach to advanced primary care as other big players have exited the market. Earlier this month, Walmart announced it was shuttering all 51 health centers along with its virtual care services. Walgreens also is scaling back the footprint of its primary care clinic chain VillageMD. The drugstore chain is in the process of shuttering 160 VillageMD locations. And, Optum plans to shut down its primary care telehealth business.
"That's the result of a broken business model," Subramanian said. "We're trying to overlay a variety of the solutions on top of what is otherwise the status quo. And that status quo is fragmented, uncoordinated, transactional, largely driven by fee-for-service reimbursement. It's not the system that we all want or need."
But, those pullbacks open up opportunities for companies like Centivo that have a different approach, he noted.
"It's an opportunity for a new kind of player to, from the ground up, bring together what patients value most, and what patients value most is number one, a trusted relationship. Being able to talk to the same clinical team all the time. Number two, the ability to have that type of trusted longitudinal relationship, easily accessible and convenient. Third, integrating that fully into a health plan experience. So, how my care is received and how my care is paid for are increasingly in one place," he said.
"Last is having all of that done at a price that I can actually afford. That's the biggest flaw that unfortunately none of these large actors, despite their deep pockets and name brands, have been able to address. We continue to face an uphill battle in this country because the average American has less than $400 in their pocket for any emergency, and an average health insurance deductible of $2,000. That arithmetic won't work. And it's going to take this type of creativity and this type of integrated solution to actually put a dent in that fundamental affordability problem."