Carbon Health offers virtual care via an app.In-person Care at 80 Clinics in 12 States of the USA, $350MSource says that the company is valued at $3.3B by Katie Jennings/Forbes
MMost hospital managers will tell you that it is impossible to operate a business with Medicare rates. Private insurance must make up for the difference. Seniors’ government-sponsored health insurance pays less than what it actually costs. Eren Bali does not believe in cost shifting. Eren Bali, a serial entrepreneur and entrepreneur from rural Turkey, believes that the problem is not the rate but the outdated technology used to manage them. Bali, 37 years old, is the cofounder and CEO of Carbon Health.
He says that part of the problem is in the technology infrastructure. Doctors are often locked in an administrative struggle with unreliable medical records software, which eats into hours after seeing patients. While most hospitals don’t want to throw out all their tech after spending tens to millions on ineffective technology, Bali chose to do so.
Caesar Djavaherian (47), a physician who worked as an emergency doctor in Iran during the revolution. They teamed up to develop a system that was intuitively simple to use and not require hours of training. This is combined with machine-based learning that surfaces most likely diagnoses and in-app messaging for second opinions. The system also integrates with electronic prescribing, labs and provides detailed analytics at every stage of patient-doctor interaction. The company is based in San Francisco, California and has served more than 1,000,000 patients. It charges Medicare rates. Carbon refused to reveal revenue figures, but said that the company’s first quarter 2021 revenue exceeded all revenue from last year.
Although the reimbursement arrangement may seem unusual, investors love it. Bali’s track record is also a benefit in the attraction of investment. He is cofounder and chairman Udemy online learning platform, valued at $3.3billion last year. Carbon Health, which is aiming to become the nation’s largest primary care provider, announced Wednesday that it had secured $350million from Blackstone’s Horizon platform. Along with Brookfield Technology Partners and Dragoneer Investment Group, Atreides and Homebrew participated. According to someone familiar with the matter, the funding round valued the company’s six-year old at almost $3.3 billion.
Eric Jones, Dragoneer’s partner says that Carbon starts with the principle of least cost wins. There are many public primary care providers, such as One Medical (which is membership-based) and Oak Street Health (which focuses on Medicare patients), but Carbon Health does not limit the number of patients that it can serve or require subscriptions. Jones says that Carbon is an attractive mass market opportunity. It can be a clinic, virtual or pop-up in any part of the U.S. It’s that special, I believe.
When it comes to patient relations, the hybrid model is crucial. Bali says that venture capitalists are generally opposed to anything that has any brick-and-mortar connection. Bali says, “I passionately believed that there was no great healthcare without physical locations.” This made fundraising more difficult, however, the post-Covid landscape is changing. With no stores to generate organic traffic, the cost to acquire customers via digital ads on Google and Facebook has become increasingly high. He says that telemedicine has the downside: customer acquisition costs can be much higher than those we spend on clinics. Bali says that 95% of Carbon’s patients in the Bay Area are walk-ins and word-of mouth referrals. Only 5% of all new clients are from paid channels. Carbon employs more than 1,600 people who work in clinics that provide care.
Tech is a passion for doctors just like everyone else. Bad technology is what we loathe.
BCarbon was first created by Ali in 2014. It all started when his mother suffered an undiagnosed stroke, paralyzing different areas of her body. In the end, he took two months off Udemy in order to take his mother back to Turkey to see a never-ending stream of specialists while they sought a diagnosis. He recalls that he was going to different doctors with thousands upon pages of documentation, including all of the laboratory records and DVDs. I realized that not all tools doctors needed were designed with their viewpoint in mind. They don’t design our perspectives either, even though we are patients.”
Bali started his career as a software engineer and used his knowledge to help students get more education. Soon, it became apparent that his next task was to achieve the same in healthcare. He was elected chairman of Udemy in 2014 after he had been removed as CEO. The next several years were spent working on Udemy’s next-generation healthcare software. He considers it a mix of clinician workflow, revenue cycle management, and patient-facing platform.
Caesar Djavaherian was an emergency medicine physician and the owner of several urgent care centers in Bay Area called Direct Urgent Care. He met him in 2017. A doctor introduced them to each other while they were applying for work at the two places. He recognized that both had similar missions in improving healthcare technology and had already met Caesar Djavaherian.
After spending years studying medical informatics, Djavaherian decided to leave academic medicine and start his own clinics. He was frustrated at the slow pace of adopting technology. MacGyvered an innovative system to his clinics, combining software from several startups. Bali offered one platform.
Djavaherian says that technologists often claim doctors don’t like technology. His response is that every doctor I know uses Google and is active on Facebook, Instagram, or both. Doctors just love technology as anyone else. Bad technology is what we dislike.” He began a pilot program for Carbon, and it was operational in three months. Carbon acquired his urgent care company in 2018, forming the company we know today.
Djavaherian explained that Carbon employs machine learning for patient intake, but isn’t concerned about Artificial Intelligence taking over his job. Djavaherian says that technology is used to reduce risk and improve clinical outcomes. Djavaherian gives an example of a 3-year old who is vomiting and comes to the clinic. Most of the time it is just a viral infection. Rarely, however, the issue may be the first sign that you have type 1 diabetes. Software will suggest that the provider conduct a glucose test.
Djavaherian says that the Carbon platform’s main benefit is its ease-of use. Djavaherian’s doctors used to spend around two hours per night filling out medical records charts. He says that providers now spend an average time of 15 minutes charting each shift after switching to Carbon. The maximum time they take is around 30 minutes. If that isn’t enough to solve the problem of burnout. “I don’t know how to help the burnout problem.”
Carbon opened 7 new clinics in 2019, and now has 80 across 12 states. There are an average of two clinics each week. Carbon administered over 1.4 million COVID-19 test results and 1.5 million vaccines during the Covid-19 epidemic, which accelerated growth.
Bali says, “Our goal is to become an independent public company as soon as possible.” Rumours circulated that Udemy could be listed sometime in the year. Bali seems to have the markets in his favor. Bali says that while other companies providing public primary care have focused on older Americans and patients with higher incomes, “we’ve seen a lot more interest in our company, which is neither high risk nor high end, but can be easily accessible for the whole population.”
Bali states that one of the key milestones in proving readiness is achieving a margin between 25 and 35% EBITDA across all Carbon’s clinics. He said that while it has been possible in some older clinics that this is not the case for all, that must be repeated across newer ones opening every day. He’s focusing on bringing the model to the rest of America, and he hopes that it will be within 10 minutes for the majority of Americans. He chose to call the company Carbon Health. Bali says that carbon is the most common element found in organic life and it serves as a metaphor for his healthcare network. He says Amazon does the exact same thing. It charges as low as possible, while still being profitable. Then you can use this as a way of building a solid customer relationship.
Publiated at Thu 22 July 2021, 02:38.47 +0000