Federally Qualified Health Centers (FQHC) are public health centers that are focused on helping at-risk and underserved populations. These community health centers are governed by federal laws for Medicare and Medicaid and thus qualify for federal reimbursement and other benefits. There are over 1400 official FQHCs in the United States and another 14,000+ affiliated look-alikes that serve over 30M patients per annum. Yuvo Health brings technology to manage the administrative and managed care functions of these FQHCs. There’s been a growing trend towards value-based care and with the platform, community health centers are able to embrace this new model by handling contracting with payors to deliver preventative, rather than reactive care. This ultimately leads to better patient outcomes, increased quality in care, and optimized spending.
AlleyWatch caught up with Yuvo Health CEO and Cofounder Cesar Herrera to learn more about how the founding team’s experience with the healthcare system led to the founding of the business, the importance of its value-based care solution for community health centers, the company’s strategic plans, latest round of funding, and much, much more…
Who were your investors and how much did you raise?
We announced a $7.3M seed round of funding. It was led by early-stage venture fund AlleyCorp, with participation from institutional investors including AV8 Ventures, New York Ventures, Laconia Capital, and Brooklyn Bridge Ventures, as well as angel investors such as Dr. Melynda Barnes, Ro’s Chief Medical Officer.
Tell us about the product or service that Yuvo Health offers.
Yuvo helps Federally Qualified Health Centers (FQHCs) make the most of value-based care by accessing value-based contracts and handing off administrative functions. As a result, these FQHCs can better serve the growing needs of our country’s most vulnerable communities for high-quality care.
What inspired the start of Yuvo Health?
Yuvo started from a shared belief between our four founders in the power of quality care for underserved communities. We understand that representation matters — that each of us and each of our communities deserve medical representation. Members of our 100% BIPOC founding team have been FQHC patients or Medicaid beneficiaries; we’ve seen first-hand how medical representation can change lives for the better. We wanted to better serve the health centers providing care. So, in January 2021, we founded Yuvo to help health centers scale the quality care they provide. Every day since, we’ve worked to support health centers’ growth, financial sustainability, and independence.
How is Yuvo Health different?
Other venture-backed, healthcare-provider organizations are intent on creating new infrastructures that, in many ways, introduce more complexity and confusion to the current ecosystem. Alternatively, Yuvo Health is focused on strengthening and scaling the existing infrastructure of providers. We recognize the critical role that FQHCs, in particular, have played in their communities for decades; rather than competing with them, we build administrative and tech-enabled infrastructure to ensure their growth and success. And, our incentives are aligned with those of the FQHCs, as well. Since our revenue is tied directly to shared savings, Yuvo Health only gets paid if we achieve the right shared savings goals for our FQHC partners.
What market does Yuvo Health target and how big is it?
Yuvo Health is targeting the more than 1,400 FQHCs across the U.S. as they transition to value-based care. FQHCs currently serve 30 million (and growing) individuals and represent nearly $30B in total revenue.
What’s your business model?
Yuvo Health revenue is currently in the initial stages of its value-based care journey with FQHCs: via collection of a percentage of shared savings achieved by its collective of FQHC partners. As we further demonstrate the efficacy of our value-based care model, we expect to eventually take on full-risk on behalf of our FQHC partners. We would then collect a per-member-per-month (PMPM) capitation up front from our managed-care partners to care for our FQHCs’ attributed members.
What are your post-COVID office plans?
Yuvo Health can be best described as a hybrid model. Given the local nature of our work and that of our partners, we will always have local teams in place to interact with our partners in the markets we operate. But, we will also create flexible work environments for our leadership and field staff, enabling them to work remotely whenever they’re not at partner sites. If COVID has taught us anything, it’s that employees need and want workplace flexibility — and that work can be done just as or even more efficiently remotely, without the hassle or added cost of a commute.
What was the funding process like?
Regarding the pre-seed funding round, I was very intentional about building relationships for the future, recognizing that not every investor would be ready to invest in us that early. As such, I made sure to maintain those relationships throughout the year and kept our seed investors updated on milestones and excited about our progress. That way, when we were ready to raise our seed round, it wasn’t a surprise for potential investors. We were able to leverage these existing relationships to quickly expand our network of potential investors. Given the ongoing pandemic, we could hold meetings via Zoom instead of spending time and money traveling for in-person meetings. This made the process much more efficient.
What are the biggest challenges that you faced while raising capital?
Although we’re now seeing momentum and investment in this space, Medicaid innovation is still relatively nascent. It’s not necessarily a challenge, but we did recognize that we’d need to provide much more education for our investors. And, given that we wanted investors with experience in this space (i.e. investors that are more than just a check), we knew that there would be a smaller pool of investors with meaningful experience in the space in which we operate.
Although we’re now seeing momentum and investment in this space, Medicaid innovation is still relatively nascent. It’s not necessarily a challenge, but we did recognize that we’d need to provide much more education for our investors. And, given that we wanted investors with experience in this space (i.e. investors that are more than just a check), we knew that there would be a smaller pool of investors with meaningful experience in the space in which we operate.
What factors about your business led your investors to write the check?
- Our focus on supporting existing infrastructure, rather than blowing it up.
- Our seasoned leadership, which gave investors confidence that we could actually operationalize and scale our concept.
- Yuvo’s business model is a practical solution that’s been proven in other markets and can easily translate into the FQHC space.
- Yuvo’s business model aligns with the national policy momentum toward value-based care (VBC).
- Our mission: We were intentional in whom we targeted as potential investors. Thankfully, we found investors who deeply aligned with our mission of scaling services for traditionally underserved communities.
What are the milestones you plan to achieve in the next six months?
- Establish at least three major value-based contracts with major managed-care entities across the Downstate New York region.
- Recruit FQHCs to represent at least 25,000 Medicaid lives in the Downstate New York market.
- Grow into a team of 20 staff people (from ~10, currently).
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Be optimistic! There is a ton of opportunity for founders based in New York, and there are many investors eager to fund and support innovation, both in and around the city.
Where do you see the company going now over the near term?
Our near-term plan is two-fold: We plan to prove out the initial stages of efficacy and scalability in our model, and to establish traction in several target markets outside of New York. Ultimately, we will expand our model to support FQHCs across multiple markets and, eventually, across the country.
What’s your favorite outdoor dining restaurant in NYC?
Riverpark by the East River. It is in the most random area — not even in a finite neighborhood, really — but the food is great, the views of the East River are beautiful, and, as a parent with three young kids, there is a ton of space to run around. In the summertime, we love the food trucks on Governors Island!
