This startup has raised $45 million to create a brigade of community health workers for Medicaid
An almost every attending physician in low-income communities has encountered a diabetic patient that ends in an emergency room visit each month. At the beginning of the month, it is an episode of hyperglycemia and, at the end of the month, it is an episode of hypoglycemia. “There’s nothing biological about it,” says Sanjay Basu, 41, a GP and co-founder of health tech startup Waymark. “That’s because often people on Medicaid are food insecure.”
On the first of the month, the patient uses food stamps to stock up on groceries and ingests too many calories, causing her blood sugar levels to spike. But at the end of the month, she is most likely hungry and not consuming enough calories. Both scenarios wreak havoc on the balance of insulin and glucose in his body. The solution is simple, Basu says, but it requires a level of coordination that is often lacking in the government-funded health insurance program for low-income Americans. The patient’s physician should liaise with local pharmacists who can provide insulin education to help her better manage insulin swings and social workers who can help her with nutrition towards the end of the month.
It’s by filling this coordination void that Basu hopes her company, San Francisco, Calif.-based Waymark, will come into play. On Tuesday, she sneaked out with $45 million in Series A funding to integrate trained community health workers and workflow management software in primary care. practices across the country to try to move the needle on value-based care for Medicaid patients. Andreessen Horowitz and New Enterprise Associates co-led the round with participation from Lux Capital and angel investors. “Our fundamental goal is to catalyze change with Medicaid by making it really easy to implement and to pay for proven care,” says Waymark co-founder and CEO Rajaie Batniji, 40, who previously co-founded the unicorn health insurance Collective Health.
Batniji and Basu have spent nearly two decades studying global health care costs and outcomes as doctors, scholars and entrepreneurs. The duo first met in the mid-2000s at Oxford University where Batniji was pursuing a doctorate in international relations and Basu had just completed a master’s degree in medical anthropology. After finishing medical school, they crossed paths again at Stanford, where Basu was assistant professor and Batniji was in residence. In 2013, Batniji co-founded Collective Health, which aimed to improve employer-sponsored health care. After serving as director of research at the Harvard Medical School Center for Primary Care, Basu joined Collective Health in 2019. The company was valued at $1.5 billion following a $280 million funding round in may. according to Bloomberg.
After succeeding in the employer market, Batniji and Basu, who both treat homeless people in clinics in San Francisco, decided where they really wanted to focus their energy was on the other end of the spectrum working with more vulnerable populations on a much larger scale. The name Waymark refers to a guide for someone who travels. “These objects are placed by people who have walked this path before,” says Batniji. Along the same lines, the hope is to hire community health workers who have had the same experiences as the patients the company serves to guide them down the path to better health.
There are 83 million Americans in the Medicaid program, including about 40% babies born in the United States each year. The federal and state governments have spent more than 600 billion dollars on the program in 2019. Approximately 70% Medicaid is managed by private health insurers, who assume the risk of covering a given group of patients. The idea here is that health insurers will be motivated to address patient issues before they spiral out of control and drive up costs. But the concept has yet to match reality — even though insurers are responsible for managing risk, the majority of Medicaid services are still billed under the old fee-for-service model.
“My thesis on space, and value-based care in general, is the reason it doesn’t work is that we don’t expose physicians to it,” says Vineeta Agarwala, general partner at Andreessen. Horowitz, who first met Batniji during his internal medicine. residency at Stanford. It’s not enough to “give doctors a bunch of random carrots and tell them to try to hit that quality metric,” while still paying them on a fee-for-service model, says Agarwala. But that’s a bit of a catch-22 since neither Medicaid managed care insurers nor physicians have the technology or the resources to flip the switch and provide higher quality care at a lower cost. “We see this as the right time to enter a huge market.”
“We looked at every Medicaid opportunity over the past five plus years, and this was the first time we pulled the trigger.”
OIn recent years, venture capitalists have poured billions of dollars into Medicare Advantage startups, the private insurers that run the government-funded health program for Americans 65 and older, including Devoted Health, Bright Health and Clover Health. There are currently about 25 million people in Medicare Advantage plans. Although the Medicaid-managed care market is more than double that size, it hasn’t been as played out, even as the expansion of Medicaid under the Affordable Care Act has added millions more people to the program.
There are two main issues holding investors back: margins and patient turnover. Medicaid markups are lower and will likely be about half of the 6.4% average seen in Medicare Advantage, Batniji says. Also, with Medicare, anyone over age 65 is in the program until they die, but with Medicaid, members move in and out of the program as their income or employment status changes. This creates challenges to engage patients and ensure continued access to care. But it is also why Batniji and Basu are convinced that the solution must be specially designed for this population.
“We’ve looked at every Medicaid opportunity over the past five-plus years, and this was the first time we pulled the trigger,” said Mohamad Makhzoumi, managing partner at NEA. “Waymark is not looking to build clinics. They are not looking to shift supplier relationships. They are really looking to use the infrastructure in place today to put together a better member experience and a better set of clinical outcomes.
Key to this vision is the training and hiring of community health workers, a crucial but largely unpaid liaison linking people to health services, especially in underserved neighborhoods. It is an idea launched by the Black Panther Party and others in the late 1960s through free medical clinics offering vaccinations, checkups, and sickle cell screenings to low-income communities that were shunned by the mainstream medical establishment . One of the key lessons from the Covid-19 pandemic is that people are more likely to believe that their friends and neighbors within their communities are trusted sources of health information. “What we want to do is take this informal and very efficient work and make it more accessible to others so that we can organize the training and really compensate people for their time and for the impact they have on the world. improved health,” says Batniji. .
This means making community health workers salaried employees. When Waymark contracts with a Medicaid managed care organization, the company bets that this new workforce coupled with software to better coordinate the overall patient journey and connect them to comprehensive services will reduce costs. There are dozens of studies that have shown how certain interventions — peer support programs, texting to increase engagement, prenatal home visits, online specialist consultations, telepsychiatry visits — can help improve health outcomes. in Medicaid patients, but there remains a major gap in grant translation. funded research into the practice due to time, money and an industry-wide obsession with pilots.
But the real change does not come from the pilots. That’s why Waymark is contracting with the hope of having tens of thousands of patients in each market to collect data and prove which interventions work, then replicate them across the country.
Improving the patient experience and bringing proven solutions to scale requires leadership that has worked at different levels of the healthcare system. In building the leadership team, Batniji and Basu brought in people with senior-level experience at other healthcare companies, including Michael Ceballos who previously oversaw new markets at CityBlock Health, Afia Asamoah, l former chief legal officer of Google Health, and Christina Fellows, former vice president of Medicaid finance at UnitedHealthcare.
They recognize all the challenges along the way, but are determined to change the status quo. “I would say there are many chasms in the road between academic publication and large-scale implementation, and so we need to approach this with great humility,” Basu says. “But one of the reasons we’re optimistic is that this is a really unique time where people are rallying around Medicaid, more than I’ve ever seen before.”