JPMorgan’s Morgan Health’s $50 million investment in Clayton, Dubilier & Rice-backed Vera Whole Health highlights how the healthcare sector is shifting from fee-for-service to valued-based care. Morgan Health is a JPMorgan Chase unit that focuses on improving the quality and costs of employee healthcare. Of course, whenever there’s a shift in a sector, that spells deal opportunities. For example, telemedicine will continue to attract private equity buyers.
But it is not just telemedicine. Morgan Health is armed and ready to make deals in coordinated care. “We are prepared to put the JPMC balance sheet to work starting with $250M,” Morgan Health CEO Dan Mendelson tells Mergers & Acquisitions. “Our first focus is coordinated care – proven models that improve outcomes and reduce costs for patients by deploying better primary care, while aligning financial incentives and moving away from a traditional and often inefficient fee-for-service approach. We believe that patients can benefit from a dedicated care team to coordinate all aspects of their healthcare.”
Vera looks to improve outcomes for workers and reduce costs for companies by making healthcare teams accountable for the health of employees. Businesses pay a flat monthly fee per patient, and providers are usually responsible for coordinating all the care. Vera operates primary care centers mostly in the West and Midwest.
“The U.S. healthcare industry is at an inflection point,” CD&R partner and Vera board director Ravi Sachdev tells us. “And we believe Vera will lead the way through innovation, strategic investments and other growth initiatives in addressing healthcare inequities, improving access to quality care, and achieving better whole-health patient outcomes while lowering costs.” CD&R invested in Vera in July.
The point is clear. The healthcare industry and the way providers get paid is changing. Are you provider or a dealmaker in this space noticing this change too? Tell me about it: [email protected].
– Demitri Diakantonis