Yuvo Health Raises $7.3 Million to Support Federally Licensed Health Centers

There are only 1,400 FQHCs in the country, leaving 20 million people without access to care

The pandemic has revealed the gap between inequalities in the health system. For example, all people who rely on Federal Qualified Health Centers (FQHCs) and the number of people who cannot access care.

Jhere are approximately 4,000 medically underserved areas across the United States; these are specific designated districts where there are not enough primary care services to support the population. These patients are primarily served by FQHCs bbut there are only 1,400 in the whole country. As a result, there are 20 million people in the United States who have Medicaid or are uninsured and do not have access to an FQHC.

Yuvo Health is on a mission to support these institutions, specifically helping them transition to value-based care to help them stay competitive.

“The underlying problem that we are trying to solve is access to health care; in particular, access to primary care services for underinsured and uninsured people. The main motivation for us is that a many of our founders were in those communities; we were either uninsured or on Medicaid, and for many of us in those communities, our only point of access to primary care is FQHCS,” I said. said Cesar Herrera, CEO and co-founder of the company.

For an FQHC to obtain funding, he explained, they must reside in an MUA and provide services to Medicaid and the uninsured on the basis of what is called a sliding scale, which means that ‘they cannot refuse any patient because of their inability to pay. IIn most cases, the amount they earn is not enough to cover the underlying cost of providing care to their populations.

“These are incredible institutions that are dedicated solely to providing primary care services to those who cannot afford them, whether it’s Medicaid or uninsured, but there aren’t enough of them. And the sources of revenue for them are not sustainable to help them grow,” he said.

Yuvo Health, which launched in early 2021, acts as an aggregator to ensure FQHCs have sufficient capacity to grow and meet the unmet demand for primary care services for these populations by helping them transition towards value-based care.

On Tuesday, the New York-based company announced $7.3 million in seed funding led by AlleyCorp, with participation from AV8 Ventures, New York Ventures and Brooklyn Bridge Ventures, as well as angel investors including the Dr Melynda Barnes, Chief Medical Officer at Ro.

Value-based care occurs when caregivers are paid on the basis of quality in relation to service; the main benefit for FQHCs of switching to this type of care is the additional income that comes with it, Herrera told me.

In their current state, although many FQHCs do not have access to these value-based care revenues and he described three barriers to this, the first being that most FQHCs individually are too small to qualify for value-based care contracts. .

“All managed care companies will have a specific minimum number of awarded lives in order to qualify for a contract. It could be like 2,500 or 5,000 awarded lives, but many FQHCs, because they’re just smaller, don’t don’t have the number of lives alone to contract with a managed care entity,” he explained.

Yuvo solves this problem by establishing a global procurement vehicle where multiple FQHCs can leverage the contracts the company issues; Yuvo negotiates these contracts on behalf of these FQHCs so that they benefit from their collective scale in these negotiations.

The second hurdle is taking downside risk, as FQHCs are prohibited from doing so by regulation; since Yuvo is not an FQHC, it can assume the downside risk for them, allowing them to take advantage of these contracts.

Finally, there is the infrastructure necessary to supporting contracts; while there are many venture capital backed organizations raising tens of millions in venture capital in order to establish this infrastructure, FQHCs do not have access to this venture capital money to actually build this infrastructure . They are also too small, in most cases, for this infrastructure to make sense to them, so Yuvo provides it for them.

“We build that infrastructure and we can spread that cost across multiple FQHCs. That’s how we can then support those FQHCs and those really critical barriers that would otherwise prevent them from accessing value-based care,” Herrera said. .

In addition to providing them with this infrastructure, Yuvo Health also provides an educational platform for FQHCs; the company has set up a series of informational webinars that it will host throughout January for FQHCs. Its inaugural how-to guide is Value-Based Care for FQHCs: Finding Success and Sustainability in a Rapidly Evolving Financial Environment.

Yuvo Health will use the new funding to triple its 10-member team over the next year and expand geographically; right now it’s operating in upstate New York, which means New York and Long Island, as well as Westchester and Rockland counties. The plan is to expand to the rest of New York State, as well as Mid-Atlantic and Midwest markets.

It will also use the funding to develop its technology tools and platform, including its data interoperability platform, its population health metrics and solutions, and then some key areas around care coordination, particularly patient engagement and care transitions.

Along with the funding, it was also announced that Dr. Brenton Fargnoli, Managing Partner of AlleyCorp Healthcare Fund, has joined Yuvo Health’s Board of Directors.

“We’re really excited about Brenton. He has a lot of experience as an entrepreneur himself. The work he’s done at AlleyCorp has been incubating digital health technology companies specifically and there’s a lot of experience he brings to the table around the value of care based on other markets that is very transferable to the work we do,” said Herrera.

“He has a very strong focus and a very strong intent to serve the Medicaid space, which is primarily where our populations and communities are served. There’s a lot of very strong value added that will sustain us as we grow. “

This will contribute to Yuvo’s ultimate vision, which is to see more people on Medicaid have access to FQHCs. This will include not only supporting existing ones by giving them access to more sustainable incomes and increasing their capacity, but also helping to create more FQHCs in medically underserved areas that otherwise had none before.

“That number of 20 million patients is a really grim reminder, but also a very important number that we will stick with in everything we do, and we want to reduce that number as much as possible over the next 10 years,” said Herrera.