Startup Wants To Help Safety Net Community Health Centers Expand Their Reach
In the United States, approximately 1,400 federally licensed health centers (FQHCs) provide care for Medicare, Medicaid, and uninsured patients in underserved communities – a one-stop safety net for health and well-being. -be who charges a sliding scale. It is therefore not surprising to learn that they lack the resources to help all those who need their services. In fact, about 20 million low-income people don’t have access to an FQHC, according to Cesar Herrera, CEO and co-founder of Yuvo Health.
“They are essential for low-income people, but there are not enough of them,” he says.
That’s why, about a year ago, Herrera and three co-founders launched their startup with a mission to give FQHCs access to additional revenue and the means to expand their reach.
This is all tied to the shift of policy makers and health plans towards value-based care and away from fee-for-service reimbursement systems. The approach aims to reduce the cost of care, in part by ensuring people get the services they need early on, so they don’t end up in the emergency room, either because they don’t have nowhere to go, either because their condition has worsened due to inadequate care or they have underlying mental health issues that should have been more effectively managed through primary care.
How do we make sure people get the care they need before they get worse? The answer is shared savings – that is, savings shared between the doctor and the health plan – and the redesign of the incentives for primary care doctors, because they are the first line of defense to ensure that patients receive the right care at the right time. So, in a value-based care system, primary care physicians earn more money to track the different services their patients need, ensure they receive appropriate care, and report all of this to health insurers. . Additionally, there are additional incentives attached to preventive services.
But for that to happen, a new set of operational requirements is needed. Simply put, primary care physicians need a way to access and report relevant patient information. “All new machinery needs to be built to support this model,” says Herrera.
What does this mean for FQHCs? To move to value-based care, they face several barriers. First, they need to build new infrastructure and many don’t have the resources to do that. Plus, many of them aren’t big enough to compete. And they face regulatory limitations. Specifically, they are prohibited from participating in certain potentially lucrative models where there is downside risk.
Addressing these barriers is Yuvo Health’s mission. To this end, it has a global contracting system allowing FQHCs to join globally, with Yuvo negotiating contracts on behalf of all participating health centers. So FQHCs that would have been too small to qualify for these contracts are now eligible because the company is negotiating for the collective.
Then there is the question of the cost of building the necessary reporting, data analysis and data aggregation infrastructure. The company’s managed services system has an administrative component that handles all reporting, as well as patient engagement and education, transition to care coordination, and risk adjustment . “These are all table-stakes functions needed to make a value-based healing engine work,” Herrera explains. Because it is centralized, the system can support multiple FQHCs.
Regarding downside risk, since Yuvo is not an FQHC, it is not governed by the same regulations. As a result, the company can assume the risk of loss on behalf of its customers. This, in turn, unlocks more lucrative value-based care arrangements for participating FQHCs that they might not otherwise be able to tap into.
Additionally, FQHCs do not pay the company, so there is no cost to them. Instead, Yuvo receives a percentage of the shared savings made in the back-end. If there are no savings, the company does not get paid. The result: FQHCs run little risk, while having access to additional income.
“Every new dollar that comes in the door doesn’t fill investors’ wallets,” Herera says. “It goes directly to serving the community, from hiring more doctors to increasing hours of operation.”
Inspired by personal experience
Herrera has spent her career in healthcare strategy and operations for Medicaid, Medicare and commercial companies. But he and his co-founders, who also have a background in managed care, came up with the idea for the startup from their own experiences as Medicaid or FQHC patients.
As a child growing up in southeast Michigan, for example, Herrara didn’t always have health insurance. But there was a FQHC. It wasn’t until years later that he realized how much the organization had done for his family and community. “It was an incredibly powerful realization that if I didn’t have access to this FQHC, I wouldn’t have had access to care unless I went to the emergency room,” he says.
When Covid hit, Herrera and his co-founders decided it was time to take the plunge and launch their startup. They formed the company with nothing more than an idea. Then, in April, they closed a round of about $1.3 million that allowed them to start building the system. They just closed their next round of $6 million. The initial market is in upstate New York, where they have signed contracts on behalf of their FQHC partners with various health plans. While Herrera says he can’t divulge details, the goal is to have contracts covering 25,000 Medicaid members by the end of this quarter.
After establishing a track record, Yuvo plans to move to the rest of New York, where there are different health plans to contend with, and then to other markets in Michigan, Ohio, Pennsylvania and New Jersey.