About $4 trillion is spent annually on the healthcare industry in the U.S., and will likely top $6 trillion by 2028. A large chunk of this money is for care in traditional brick and mortar facilities, said DispatchHealth CEO Dr. Mark Prather.
That’s why the company offers a different model, he said in an interview. Denver, Colorado-based DispatchHealth works with payers, providers, health systems, employers and others to deliver in-home, high acuity care, which reduces emergency room visits, hospital stays and readmissions. After announcing last week that it secured more than $330M — through both equity and debt financing — the company will be working to expand its services.
“We’re trying to fix the significant cost burden imposed by the brick and mortar acute care system,” Prather said. “We think we can deliver an alternative at a significantly lower price.”
The $330 million includes a $259 million Series E equity round, which was led by Optum Ventures. Other investors include Adams Street Partners, Blue Shield of California and Humana. Additionally, K2 HealthVentures, Silicon Valley Bank and SVB Capital gave DispatchHealth debt financing of $75 million with up to an additional $75 million for growth initiatives. In total, DispatchHealth has raised more than $700 million.
Optum Ventures chose to invest in the company because of its work in advancing health outcomes through in-home care, said Laura Veroneau, managing partner of the firm.
“DispatchHealth is transforming the healthcare industry by improving access to outcomes-driven, high-quality, in-home care and delivering on the enhanced experience patients deserve,” Veroneau said in a news release.
Currently providing care in 34 states, the home-care company will use the funding to expand in its existing markets, Prather said. However, it will also look for opportunities to move into new markets, he added.
Additionally, the company is investing in its technology platform and looking for new services to add to its portfolio, Prather stated.
When it comes to DispatchHealth’s exit strategy, Prather said the company is exploring all its options, whether that’s going public, staying private or pursuing an acquisition.
“We’re ambivalent,” he said. “We think we have all three of those opportunities and we’ll sort of look at what’s right for us.”
Ultimately, the company aims to reduce costs and improve outcomes through its in-home care model, Prather said.
“I think when you go into the home, you have the opportunity to see that patient in context. When you make your care plan for that patient, it is very personalized,” he said. “The converse of that is if I saw you in one of my ERs, you’re nervous and you don’t tell me very much. That room doesn’t tell me very much and I end up giving you a generic care plan.”
Credit: Dispatch Health