Heal makes first acquisition to expand its doctor house calls into NYC

The company bought Doctors on Call, will now be available to 75 million patients in the U.S.

As what we think of as "healthcare" expands beyond just the four walls of a doctor's office, thanks in part to wearables and other digital therapeutics that are giving patients more control over their health, there have been a number of services designed to make it easier for patients to connect with a doctor.

While most of those companies primarily offer telemedicine services, Heal has taken that idea in a somewhat different direction; rather than trying to just recreate the doctor/patient experience over the phone or video, it allows patients to schedule house calls with their doctor, allowing them to have face to face time with their doctor in the comfort of their own home. 

Now Heal is set to expand in a major way as it announced its first acquisition on Monday, purchasing New York City-based medical house call service Doctors on Call. The acquisition price was $15 million, Nick Desai, co-founder and CEO of Heal, revealed to me. 

A "tectonic shift" in Medicare rules

By acquiring Doctors on Call, which averaged 42,000 house calls to seniors in New York City in 2018, Heal will get an opening into its biggest market yet, right on the heels of a major change in Medicare rules that now allow non-home bound patients to receive doctor house calls. 

"We’ve been doing house calls for five years, but up until December 31, 2018, which is not that long ago, Medicare had a rule restricting doctor house calls among Medicare patients to only medically home bound patients. For a company like Heal, to market and say, ‘Hey, you can use it but your husband can’t,’ or, ‘You can use it but your friend can’t’ into the senior population was very tough to do," Desai explained.

That's why Heal, along with a number of other companies, worked with Medicare over the last two years "to show them that house calls can lower the cost of care, improve the quality, improve access, keep people out of the ER, all the things that Heal achieves for patients."

Medicare finally changed that rule, meaning that starting on January 1 of this year house calls could now be delivered to all of America’s approximately 50 million Medicare patients, something which Desai called "a tectonic shift in our ability to grow in the Medicare space."

"Obviously Medicare patients are older and generally sicker and that’s where you want to grow a business like this," he said. 

Doctors on Call, which was founded in 1968, has been delivering doctor and nurse house calls to home bound Medicare patients for the last forty years; by acquiring the company, Heal is going to be able to get a running start into the Medicare population that it, so far, had to mostly ignore thanks to that rule. 

"As this rule change happened, and we wanted to go to New York, we thought it would be ideal to acquire this practice as a jump start into the Medicare population, to have patients who could really benefit clinically from the Heal Hub, to have a presence in the New York market and to jump start our approach to Medicare population," said Desai.

"It obviously gives us a jump in revenues, a base in New York, a lot of experience in the Medicare sector, particularly in sicker Medicare patients, and we can now take that practice, give those patients who need it the Heal Hub and install our technologies."

Heal's largest market yet

Expanding to New York City was also played no small part in the decision to buy Doctors on Call. Heal is currently available in major regions throughout California, as well as Atlanta, Washington DC and Northern Virginia. New York City is will not only be the company's largest single city yet, but it will make Heal services available to more than 75 million Americans.

"I love Los Angeles and I’ve lived here my entire life, and I live by the ocean and you can’t beat LA for the weather and a lot of other things, but New York has a neighborhood feeling and is the epicenter of American media and has both a lot of older retirees and a lot of busy professionals, so it’s an ideal market to bring Heal to. We feel like by being in San Francisco and LA and D.C. and Atlanta and then adding New York, we’re in the major centers of media and commerce and healthcare and healthcare innovation. There are great hospitals and med schools there, like Columbia and Sloan Kettering and there are a lot of people who need better healthcare," said Desai.

"People think about New York and they think about high wealth people, sort of like when people think about LA but the reality is that what makes that city go is millions of hardworking people, union people and teachers and firefighters and regular, everyday people. Those people getting access to better care is something that’s very meaningful to us. Outside of LA, it’s a city I go to most often, it’s an energetic and vibrant place, so it’s a watershed moment in our company."

In addition to the benefits of the acquisition for Heal, including the patient-base and market, there are also benefits to Doctors on Call as well, namely access to Heal's technology, which Doctors on Call had been so far lacking. Heal not only delivers house calls to patients but also provides them with the Heal Hub, a remote, chronic vital sign monitoring technology, which report stats like a patient's blood pressure or blood sugar to the doctor in real-time. In May, Heal also launched its first telemedicine service which is now being used by hundreds of patients.

The doctors and nurse practitioners who work for Doctors on Call are all going to work for Heal; in all, the acquisition will net Heal roughly 30 new providers, all of whom will now be able to use technology to automate what they had been previously been doing by hand. 

"They’ll be doctors and nurse practitioners seeing patients with Heal, old and new patients, but they’ll be enabled with state of the art technology and tools and the ability to give their patients the Health Hub. They will have the same ability to deliver quality house calls, coupled with the technological innovations that have enabled them to prior health records, to monitor their patient, to be in touch with their patients by phone," said Desai.

"Right now, in that practice, for example, the providers have to go home or to the office or back to the Doctors on Call office to chart and code the visits. We’re giving them our tablet-based system so they can do it in the car between patients like our providers do. There’s a real opportunity to improve on the great quality they’ve delivered and enable them with state of the art tool to take care to the 21st century, which is where we want them to be, and the kind of care we want all patients to get."

A fast growing company

The combination of all three aspects of Heal's service, the house calls, the Hub and the telemedicine service, is already having an affect on patients, especially elderly and sicker patients with multiple chronic diseases.

In 2019, the company expects to perform more than 100,000 house calls, averaging an estimated $53,700,000 per year in overall healthcare cost savings. The company has reduced unnecessary Emergency Room and Urgent Care visits by up to 71 percent, while reducing hospitalization by 28 percent.

"What we’re seeing is that the ability for us to come into the home, see the home health environment, see the social determinants of health, understand the food insecurities and the medications and the fall risks and all of these things; when we see those things together with the context of the regular clinical care, and then doctor can have a Heal Hub installed so we get their real time vital signs, blood pressure, blood sugar, heart rate, whatever the case may be, and then we can contact them via telemedicine in context of all that data," said Desai.

"It’s really delivering some exciting results in that patients are getting more and more proactive quality care, that feels more high touch, and doctors are able to do with a combination of house calls and telemedicine. With a cost effect method we’re really able to deliver better care, and the patients really love it."

Founded in 2014, Heal tripled its revenue run rate over the last 12 month; in part thanks to the acquisition of Doctors on Call and the expansion into New York City, it expects to triple it again over the next 12 months.