With all of the politics surrounding healthcare it is refreshing when a company comes along looking to truly revolutionize the world of health care. Virtual Health, the health management platform that is priming us for ‘value based care’ is looking to be the bridge we need for a new way of dealing with healthcare. The company is building tool after tool to integrate and optimize their system to be affordable and remain at as high quality of care as possible.
With a recent award in innovation from Healthcare Informatics, Virtual Health CEO Adam Sabloff talks with AlleyWatch about their latest round of funding and where they plan to go from here.
Who were your investors and how much did you raise?
Virtual Health completed a Series A round led by growth equity fund Edison Partners for an undisclosed amount.
Tell us about Virtual Health.
Virtual Health is the first true population health management platform purpose-built for the transition to value-based care. Virtual Health offers an end-to-end ecosystem with a vast range of functionalities, including interdisciplinary clinical workflows, electronic health record aggregation, behavioral health management, broad spectrum telehealth, care team collaboration, real-time and predictive analytics, quality metrics, patient engagement and customizable reporting. Virtual Health empowers health plans, managed care organizations, self-insurers, government agencies and accountable care organizations to provide proactive care for patients offering better quality of life and enhanced outcomes while maximizing efficiency, improving transparency and lowering costs.
What inspired you to start Virtual Health?
Passionate about healthcare delivery, Virtual Health CEO Adam Sabloff conceptualized the first true population health management platform after serving as CMO of Midtown Equities, a $7 billion Real Estate, Media, and Aviation conglomerate, where he also oversaw its technology subsidiary, Midtown Technologies. While spearheading the development of the first ever “The Ritz-Carlton Residences” in the Inner Harbor of Baltimore he recognized that seniors and the chronically ill residing in the firm’s numerous developments across the country deserved better, proactive patient-centric healthcare and a holistic care approach, envisioning the home as an extension of the healthcare continuum with the patient at the center. After losing his mother to a late-stage diagnosis, Sabloff launched Virtual Health to pursue this belief, and offer a better healthcare delivery solution for all.
How is it different?
Many other vendors in the healthcare space have simply rebranded ineffective legacy systems or brought to market slice-of-pie solutions which need to be kluged together, creating the same inefficiencies and data silos which have plagued the health care industry for decades. Virtual Health is seamless, comprehensive, cost-effective, customizable, interoperable and purpose built for value-based programs.
What market you are targeting and how big is it?
The population health management market is posed to reach $31.63 billion by 2020, growing at a CAGR of 23.2 percent, according to Markets and Markets.
What’s your business model?
Virtual Health offers customizable, cost-effective technology solutions to a wide variety of clients in the health care industry, including health plans, managed care organizations, government agencies, self-insurers and accountable care organizations. The company charges a licensing fee using a Per Member Per Month calculation which aligns with the reimbursement structure of value based care. The single monthly fee includes development, hosting and data warehousing, system administration and compliance, system administration and compliance, and general service needs – covering updates, patches, technical and customer support.
Virtual Health then assigns a team of accomplished and seasoned account executives and project managers to work hand-in-hand with the client, providing ongoing customization as needed. The team works closely with each respective client to tailor its baseline software product to specifically address each company’s unique set of needs, requirements and pain points for a fully integrated data management platform.
Virtual Health does not charge “time and materials,” and offers full cost transparency and unparalleled customer service; a hallmark of company culture based on Adam Sabloff’s luxury brand background.
How does ‘value-based’ care differ from current models?
In the traditional fee-for-service model of reimbursing providers for health care, physicians and organizations are paid per patient seen, tests administered, procedures performed, etc. With value-based care, payers and providers bear the financial risk of poor outcomes, and payers are required to provide proactive care for their populations with a capped per member per month fee. Payers and providers are held financially accountable for improving the health of their patient populations, preventing expensive hospital admissions and providing proactive care in an evidence-based, cost-effective way. The end result is more efficient, targeted care with an emphasis on preventing costly conditions and incidents before they occur.
What was the funding process like?
While typically a very intensive and lengthy process, Edison Partners worked with us as true partners, looking to find solutions instead of problems. The team was supportive and provided guidance throughout the process that refined our model and made us a stronger company. Although there was extensive due diligence performed by both Edison and third party consultants, it did not feel like an ongoing inquisition. Instead, we worked together to find a clear path forward that was a win-win for Edison Partners and Virtual Health.
What are the biggest challenges that you faced while raising capital?
The hardest component of raising capital is the need to prove your model before being viewed as an attractive investment. Investors don’t invest in concepts, they invest in people and results. It is on the founders and management team to navigate the early, difficult challenges of building a strong business model, implementing your vision and securing customers. There are thousands of pitfalls along the way, and success as an entrepreneur is the ability to successfully overcome those challenges. The most difficult part of navigating that path for Virtual Health was the magnitude and ambition of our mission. We are disruptors in an industry that strongly resists change and we are pioneers in an entirely new frontier in health care. It took a long time to convince the industry that we are the future.
What factors about your business led your investors to write the check?
Our investors recognized that our approach to value-based care is entirely unique from the competition. Virtual Health’s unique offerings and functionalities are a carefully thought out and architected symphony of parts, seamlessly working together to provide groundbreaking results. Virtual Health is the perfect example of the final product far surpassing the sum of its parts. We provide a seamless experience across multiple disciplines and functionalities including unparalleled data integration, interdisciplinary clinical workflows, behavioral health management, broad spectrum telehealth, care team collaboration, real-time and predictive analytics, quality metrics, patient engagement, customizable reporting and a modular architecture for a high level of flexibility and scalability. Additionally, Edison Partners sees our rapid customer adoption (600% year over year growth) and deployment by some of the biggest health plans in the country as testament to the value Virtual Health brings to the healthcare industry. Edison Partners invested because they are confident our unique business model and service offerings will continue to position Virtual Health as the market leader.
What are the milestones you plan to achieve in the next six months?
Virtual Health is in talks with numerous payers and at-risk managed care organizations. We expect to more than double our client base within the next six months. Since commercial launch in 2014, Virtual Health has gone from being leveraged in managing 1,500 to nearly 1.5 million patient lives across Medicaid, Medicare and commercial populations. We have extensive plans for continued evolution and innovation and will be bringing new and exciting approaches to health care in the near future.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Share big, ground-breaking ideas right out of the gate and show that you’re willing to stick with investors for the long haul, even if funders aren’t ready to embrace them yet. When I started Virtual Health, many of the people I met with had a hard time grasping the vast changes I envisioned for the health care industry, including health care insiders—I wanted to change the world and at the time it was a radical shift. However, as the company grew and the market evolved, I stayed in close contact with the connections I made early on, building relationships and trusting that when we were ready, the truly loyal would be there. We stayed in contact with Edison Partners for three years before we mutually agreed it was time to work together.
Since the Affordable Care Act has passed, virtually everyone in the industry is being held to higher standards. Now, rather than being an outlier, Virtual Health is being seen as a sought-after pioneer in the ever-evolving space of health care. The company has stuck to its mission of helping health care organizations transition successfully to value-based care models with an unparalleled customizable solution ready to solve the numerous challenges they face. As a result, there has been an explosion of inbound inquiries now that the industry has a better understanding of the company’s vision and the fact that Virtual Health’s technology is way ahead of the curve.
Where do you see the company going now over the near term?
Virtual Health is now in discussions with the largest health insurance companies in America and abroad, and already has a number as current clients. As more and more risk-bearing organizations within the health care ecosystem realize the need for new approaches and efficient and cost-effective solutions, Virtual Health has experienced exponential growth as the premier product for this emerging market.
In the near term, Virtual Health envisions a higher level of interest from clients looking to further leverage Virtual Health’s patient-facing tools, bringing the patient and care givers deeper into the management of their own care. Patient engagement is an integral part of the health care management process and as payers get a better handle on how education tools, wearables, data and life style changes can drive down health care costs and improve value-based care, Virtual Health anticipates more requests to adopt and further customize these patient-facing functionalities.
What’s your favorite restaurant in the city?
While professionally my passion is to innovate new ways of approaching old problems, I am a traditionalist when it comes food. I can never go wrong with stalwarts like Peter Lugers and Sparks.
