How does Privia Health make money?
It derives most of its money from reimbursements for health services rendered by its providers
A number of forces have come together to make the public market more attractive to healthcare technology companies, including the pandemic and the rise of PSPCs. This has led to nearly doubling the number of companies entering the market so far in 2021 compared to 2020, and we still have a quarter of the year to go.
Yet, so far, many of them are not doing as well, trading at very low prices compared to where they started.
One of the exceptions to this is Privia Health, a physician-centric platform that aims to “reduce unnecessary costs, achieve better outcomes, and improve patient health and provider well-being.”
“Privia Health is a national, technology-driven physician empowerment company that works with medical groups, health plans and health systems to optimize physician practices, improve patient experience, and reward physicians for delivering high-value care in person and in virtual care environments, âthe company wrote in its S-1 filing with the SEC.
âWe directly address three of the most pressing issues facing physicians today: the transition to the value-based healthcare reimbursement model, the ever-increasing administrative demands to operate a successful medical practice, and the need to involve patients using modern, user-friendly technology. “
The company does this by organizing physicians and clinicians into a practice model that it says combines the benefits of a partnership in a large regional medical group with âlocal autonomyâ for physicians and clinicians.
“Our medical groups are designated as networked by all major health insurance plans in all of our markets, and all Privia providers are accredited with these health insurance plans.”
The company offers five main services:
- Technology and population health: these are tools designed to improve physician contribution and provider workflows. They include a tool for patients to find a provider online and receive appointment reminders; information integrated into its EHR so that providers can assess the health of patients and the performance of their practice; Risk adjustment factor and care gap reminders; and a patient education tool.
- Single NIF medical group: In each of its markets, the company is building a single NIF medical group focused on primary care that facilitates payers negotiation, clinical integration and financial incentive alignment. The Group enables providers in its medical groups to collaborate in service meetings organized by physicians to review analyzes, share best practices, create accountability and advance evidence-based medicine. Suppliers can also reduce their expenses by using ancillary services and taking advantage of discounts on bulk purchases.
- Organization of management services: Privia’s MSO helps reduce administrative work, increase efficiency and lower direct costs for suppliers through revenue cycle management, performance management, analysis and reporting, clinical informatics, IT support and marketing.
- Responsible care organization: Privia’s physician-led responsible care organization aims to reduce costs, involve patients, reduce utilization, and improve patient coordination and quality metrics. It facilitates this through a cloud-based technology platform that identifies quality gaps, sends out patient satisfaction surveys, automates patient awareness and education, and generates reports and alerts to improve patient satisfaction. coordination of care.
- Network for buyers and payers: Privia’s networks allow providers to connect with new patient populations, create personalized contracts and integrate into their community. The tools include contracting for services that use physician data and feedback so that providers can expand their client base and influence how care is delivered.
In 2020, Privia generated a total turnover of 817 million dollars, which it breaks down into three mmain categories: fee-for-service income (FFS), value-based care income (VBC) and âother incomeâ.
The revenues of the FFS come from patients, as well as from administrative services. FFS patient care revenues are derived from reimbursements for FFS medical services provided by Privia providers, including payments from contracts with the US federal government and large and small payers, as well as patient payments in the form of co-payers. payment, coinsurance or deductibles. FFS administrative services revenues come from the provision of administration and management services to medical groups that are not owned or consolidated by Privia.
In 2020, 79.2% of Privia’s revenues came from FFS-patient, while 7.1% came from FFS administrative services.
VBC revenue is generated when Privia providers are reimbursed through traditional FFS Medicare, MSSP, Medicare Advantage, commercial payers, and other direct payers and existing and emerging employer programs. Revenues are mainly collected in the form of management of care fees per member per month to cover the costs of services typically not reimbursed under traditional FFS payment models, including population management, care coordination , advanced technology and analysis. It also comes from the shared savings made on the basis of improved quality and lower costs of patient care assigned to the company in the VBC agreements.
In 2020, 11.4% of revenue came from value-based care.
Finally, other income comes from the services offered by Privia, including virtual tours, virtual scribes and coding, clinical trials, behavioral health management and partnerships with self-insured employers to provide direct primary care. to their employees. This flow represented 2.3% of revenues in 2020, compared to just 0.4% in the previous two years.
Privia now has more than 3 million patients on its platform and more than 2,700 providers with more than 700 places of practice. The company went public in April, raising $ 778.4 million when it went public. It is now trading at $ 26.91, 17% above its IPO price, with a market cap of $ 2.8 billion.
(Image Source: priviahealth.com)