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The company bought Brand New Day, a Medicare insurance plan, earlier this month
2019 was a big year for healthcare M&A: with 1,774 deals announced, it was the second largest year ever, behind only the 1,908 deals completed in 2018. 2020 is still very young but the trend is already continuing, with one of the biggest healthtech companies already announcing an acquisition that will help it expand to a big new market.
Earlier this month, tech-centered healthcare insurance company Bright Health announced that it acquired Brand New Day, a California-based Medicare insurance plan. No financial terms of the deal were announced.
Founded in 1983, Brand New Day offers benefit programs for people who have Medicare only, Medicare and Medi-Cal. It also covers individuals who have ongoing medical conditions such as diabetes, cardiovasuscular disease, dementia, or mental illness, as well as those who live in long-term care facilities. It currently covers 40,000 members.
"Brand New Day offers health plans for Medicare eligible seniors and special needs populations in California, with a particular focus on supporting the needs of vulnerable populations with complex conditions through population health management," Simeon Schindelman, CEO of Bright Health Plan, explained to VatorNews.
"Through its collaboration with local communities, physicians and caregivers in California, Brand New Day has developed significant expertise in population health management, which has led to outstanding results for its members. We plan to leverage this expertise across geographies and product lines."
Part of what attracted Bright Health to Brand New Day, Schindelman said, was its commitment to "physician autonomy, strong patient-provider relationships, and supporting health care providers in delivering outstanding health care to vulnerable populations."
"Its significant local knowledge and experience in how to align the interests of patients and caregivers, providers, and the health plan will play a crucial role in our ongoing efforts to bring our innovative healthcare technology model to Americans across the country," he said.
"Brand New Day’s integrated approach aligns very well with our Health Plan Care Partner model. By combining our core strengths, we will be able to deliver even greater value to more kinds of people in more of the nation."
A major part of the acquisition, though, it that it will allow the Minnesota-based Bright Health to expand coverage into California for the first time, giving the company a foothold in the largest market in the United States.
"Like Bright Health, California is a national leader in health care innovation. Along with being the country’s largest health care market, this makes us confident we can bring affordable value-driven health plans to both consumers and health care providers."
Going forward, Brand New Day will continue to operate as part of Bright Health, keeping its 305 employees. The company's current leadership, including founders Jeff and Jay Davis, will join the Bright Health Plan leadership team and will continue to lead local market operations.
This acquisition comes a month after Bright Health raised a $635 million Series D round of funding led by NEA, bringing its total funding to over $1 billion.
Founded in 2015, Bright Health offers "Care Partner Health Plans," which can include individual, family and Medicare Advantage plans. The company says its plans are more affordable, and give patients a better experience, due to its business model of only working exclusively with one health system per market. That drives customers to those systems that are already providing better care at a lower cost.
By only working with one health system per market, Bright Health can also drive a greater amount of market share to that one system, rather than having patients go a variety of health systems within that geography.
This is Bright Health's second acquisition, after buying marketing agency Spyder Trap in 2017.
(Image source: bndhmo.com)
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