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Today, 98point6 announced its $118mn Series E as they continue to scale their on-demand, text-first primary care platform that offers a unique combination of affordable, accessible, and quality care to cater to today’s consumer expectations. We at Activant are proud to have co-led the round with L Catterton and partner with new and existing investors, including Goldman Sachs.
At Activant, we are hyper-focused on identifying companies that bring next-generation technology to legacy industries that are ripe for digital disruption. We have partnered with Better, a technology company taking a full-stack approach to tackle the outdated and inefficient mortgage industry. We also recently invested in Truework, a platform that uses technology to dramatically improve the experience and outcomes for all parties involved in the identity verification process. The internet and technology have fundamentally changed the way that goods are made, moved, and sold, and has accelerated the evolution of entire industries — the healthcare space is no exception. As the U.S. healthcare system continues to shift towards value-based care, achieving the “Triple Aim” of healthcare (developed by the Institute for Healthcare Improvement in 2007) — that is, to improve the individual experience of care, improve the health outcomes of populations, and to reduce the per capita cost of care — has been a consistent goal for healthcare services organizations and novel business models. We believe that this achievement is inevitable through the adoption and utilization of cutting-edge technology. In the case of our investment with 98point6, we believe that the combination of AI technology and great physicians will solve a massive challenge of providing low cost and high-quality primary care to everyone.
Out of necessity, the U.S. healthcare delivery system is evolving at a pace more rapidly than ever before, driven by regulatory changes, the adoption of technology, and an aging U.S. population that accounts for a disproportionate and massive expenditure. The industry itself is characterized by chronic and complex issues that have been nearly impossible to solve — these issues serve as catalysts to bring lasting changes in how healthcare is delivered and consumed.
According to the CMS, US healthcare spending was $3.6 trillion or ~18% of GDP in 2018. As a direct measure to both curb expenses and improve health outcomes, the healthcare industry has been moving away from fee-for-service business models toward a system that promotes value-based care and transparency of both cost and quality. These steps are the right ones in our journey towards affordable healthcare, but without significant changes to the cost of care delivery, only represent marginal changes.
According to the AAMC, the US will experience a shortage of up to nearly 122,000 physicians by 2032 as demand growth for physicians continues to outpace supply. The problem is expected to continue to be more pronounced in rural areas. This issue has given rise over the past decade to new business models like the locum tenens industry, which requires physically moving physicians to work temporarily in another practice — unfortunately to only moderate success.
Similar to how headless commerce (API-based microservices) has dismantled traditional content management systems (CMS) for e-commerce businesses, healthcare has become more specialized and is pivoting away from hospital-centric models. Furthermore, increased expectations for customer service have left traditional care delivery experiences in the past and serve as a source of competitive differentiation. Just as we expect superior experience from premium subscription services like Spotify and Peloton, healthcare is increasingly becoming held to the same standard.
Meaningful improvement in AI technology has brought significant change to disparate areas of healthcare (assessing imaging scans for the presence of cancer or other diseases, for example). In the traditional care delivery setting, data is difficult to capture due to the in-person nature of visits. This challenge also applies to tech-enabled, “traditional” video telemedicine platforms. For healthcare solutions to attempt to improve outcomes based on data, it is paramount to collect structured data and “close the loop.” It would be difficult to bring step-change through the power of AI without those two conditions being met.
Given the trends and the challenges faced by healthcare services, we were compelled by 98point6’s technology-forward approach to tackling these issues head-on. 98point6 is the only solution that pairs AI/ML with the expertise of U.S. board-certified physicians to deliver on-demand care via private and secure in-app messaging that’s available 24/7. It covers the full spectrum of primary care from diagnosis and treatment to the ordering of prescriptions and labs.
98point6 is re-defining how healthcare is consumed with the use of technology. With its customer-centric model, industry-leading utilization rates (its commercial partners are, on average, experiencing 8x higher utilization than with their previous, traditional telemedicine solutions), and lower cost of care delivery, we believe 98point6 exceeds in all three areas of the Triple Aim. We expect the company to continue to experience rapid adoption and become the digital gateway to healthcare services.
We are incredibly excited to partner with Robbie Cape and the entire 98point6 team on their journey to achieve the company’s mission to provide accessible, affordable, and quality primary care to everyone on earth.