Pearl Health raises $75M to help PCPs transition to value-based care

The round includes $55 million in equity and a $20 million line of credit

There are a number of trends putting additional burdens on primary care physicians, including the rapidly aging population: by 2060, nearly one in four Americans will be 65 years and older, the number of 85-plus will triple, and the country will add a half million centenarians.

At the same time, PCPs are under-compensated compared to other verticals, and they're overburdened: according to research conducted by the University of Chicago, there are literally not enough hours in the day for them to see an average number of patients. Meanwhile, chronic conditions are rising in prevalence and severity and healthcare spending in the US grew 2.7% in 2021, reaching $4.3 trillion or $12,914 per person.

Michael Kopko, co-founder and CEO of Pearl Health, a company focused on physician enablement and risk bearing in value-based care, believes that all of this is putting the US at an inflection point for healthcare sustainability and access. 

"Primary care has long been under-appreciated and under-resourced in our current healthcare system — and we have an opportunity to contribute to a primary care renaissance through new value-based payment models and innovative practice enablement technology," he said.

"We are looking to make this shift toward proactive panel management as easy as possible, distilling data from across the healthcare system to what is most important for providers."

Pearl's mission is enables providers to take advantage of new payment models that transition away from fee-for-service and provide compensation for keeping patients healthy, while also allowing them to proactively manage Medicare patient panels.

Now the company will be able to make that vision a reality thanks to a $75 million  oversubscribed Series B funding round led by Andreessen Horowitz's Growth Fund and Viking Global Investors. AlleyCorp, SV Angel's Growth Fund, and other investors also participated. The round, which consists of $55 million in equity capital, and an anticipated $20 million in a line of credit, brings Pearl's total funding raised to more than $100 million.

Through the Pearl Platform, providers and clinical staff can more easily identify the patients most likely to need attention across a patient panel. They can also explore detailed patient-level information with data across providers and facilities, such as hospital admissions, new diagnoses, and new medications.

"We believe the best way to empower providers to manage healthcare risk is to ensure they have unparalleled visibility into their patients’ healthcare utilization and needs," said Kopko.

For example, the Pearl Platform gives providers and clinical staff admit, discharge, and transfer alerts, so they have the information they need to effectively coordinate care following acute or post-acute events and prevent costly, avoidable hospital readmissions. The company also provides turnkey reporting, giving primary care organizations visibility into the most important determinants of success in value-based models so they can identify where they could deliver better care at a lower cost. That saves them hours that otherwise would have been spent in spreadsheets, checklists, or reports on quality measures.

In one practice that uses Pearl, a high-risk patient had not been seen by their primary care practice since early 2021, and the practice had no information about care through other providers or facilities in the intervening time. Since too much time had elapsed since the patient’s last visit, their urgency score increased in the Pearl Platform, which signaled to the practice that the patient should be considered for proactive outreach. The practice made contact with the patient’s caregiver and was able to schedule an office visit and labs within less than two weeks.

In another case, a disabled patient had not been seen by their primary care practice since 2020, and the practice had no information about care given through other providers or facilities. The Pearl Platform indicated that the patient’s urgency score had increased and, after reviewing the patient’s situation, the practice contacted the patient. The practice determined that the patient did not have reliable access to transportation and scheduled a virtual primary care visit, which happened less than a week later.

"Our approach differs from other value-based care and physician enablement companies in some critical ways. One, our partnership model aligns Pearl’s compensation with providers’ success. We succeed when providers succeed, and providers succeed when they are providing more proactive, holistic patient care," Kopko explained.

"In contrast to the flurry of acquisitions of physician practices by health systems, PE groups, and other physician enablement companies, at Pearl Health, we aren’t seeking to acquire practices. Instead, we give them greater access to economics that are more in line with the value they create for the healthcare industry and enable them to take advantage of that opportunity."

Finally, he said, the enablement Pearl provides is not simply sending them more staffing resources; instead, the company takes a technology-first approach, enabling them with data and insights that help them to transform the way they provide care.

The name Pearl Health derives from Clinical Pearls, or “small bits of free standing, clinically relevant information based on experience or observation.”

"We like this a lot as we’ve always wanted to build a technology that is simple and easy to consume but brings deep insight as a result of awesome analytics combined with rich real world experience," Kopko said.

Over the past year, more than 800 primary care providers across the country have partnered with Pearl; as such, it saw 10x year-over-year growth and expanded from 10 to 29 states. Early adopters of the Pearl Platform in 2022 took more than 3,000 actions through the platform, logged actions for 60% of their Medicare patients, including a large number focused on coordinating preventive care and post-acute care. 

Pearl Health plans to use the new funding to expand its network of enabled providers who can cooperate in risk-based arrangements, while also making long-term investments in its technology and services, including improvements to the algorithm that surfaces insights within the Pearl Platform, new sources of data to continue to provide a more nuanced understanding of individual patient care journeys, and pilot partnerships that will help facilitate more holistic care coordination.

It will also be expanding its team, hiring across  engineering, product, sales, marketing, customer success, and finance.

"At Pearl, we believe that our team — and above all, our culture — will be the ultimate reason for our success or failure. As we enter the next phase of growth, we’re very mindful of building the right team and culture to meet the moment," said Kopko.