The amount of money being invested in the home-based care space has many people excited about the future, particularly as smaller startup companies continue to grow.
VC firms have in recent years pumped over $2.5 billion into senior care and home-based care startups, according to Crunchbase data, with notable examples being MedArrive and Sprinter Health. That trend is likely to continue due to the country’s rapidly aging population and shifting care preferences.
“I think there’s a lot of just positive tailwinds at the macro level,” Nick Kirby, Sprinter Health’s vice president of partnerships, said last month at the Home Health Care News Capital+Strategy conference.
Backed by Andreessen Horowitz, General Catalyst and others, Sprinter Health is an on-demand mobile health startup that partners with home-based care agencies.
Bryant Hutson, vice president of business development with MedArrive, echoed Kirby’s sentiments.
“There’s just a ton of money pouring into the space,” Hutson said at the HHCN event. “There’s a lot more to experiment with.”
On its end, MedArrive coordinates in-person care for health systems, Accountable Care Organizations (ACOs) and physician group partners via emergency medical services professionals, nurses and community health workers, among others. The New York-based company, whose investors include Section 32 and 7wireVentures, also has an array of virtual capabilities.
As far as building a team, both Kirby and Hutson believe that now is a great time to be a part of a startup because of how flexible they’re able to be and how enticing it is to work for one.
One of the main reasons is because the industry is adapting while startups are growing.
“Over the past however many years, medicine has really been centered around the physician and the convenience of the physician,” Kirby explained. “Today, there’s a number of different reasons — including the placement of technology and the shift to value-based care — powering this transition to [the idea of] centering care around the patient’s convenience.”
The shift to value-based care is also effectively opening up new models for companies like Sprinter Health to get paid for doing things that are a little bit outside of the norm, he said.
And again, it helps that funding seems to be more accessible than ever.
“The amount of money that’s been poured into this space is greater than ever,” Kirby said. “We actually have the resources and access to capital to really execute on these ideas versus trying to tinker around with them in a garage.”
In February, Sprinter’s co-founder and CEO, Max Cohen, told HHCN the company is taking a slow-and-steady approach in spending the nearly $38 million it raised since the start of 2021.
Moving forward, Hutson said he hopes that newfound interest translates into improved quality of care for patients.
“I haven’t been in health care that long compared to a lot of the folks in the room, but in the 10 to 12 years I’ve been here, it’s been pretty easy to see and find ways to make money doing bad things in health care,” he said. “It’s actually really, really hard to make money doing the right thing for the patient.”
Additionally, having state governments understand that addressing underlying social needs will lower the costs of care helps startups like MedArrive.
“Health equity and social determinants of health, we’ve known those are huge drivers of the underperformance of clinical care,” Hutson said. “Particularly in the Medicaid space, you have state governments — even in red states — people are realizing the way to lower the cost of care around this is addressing these underlying social needs. That’s really exciting for us.”
Streamlining training, flexibility in staffing
One of the many benefits of working for a startup is having hiring flexibility and being a slightly more desirable place to work. To that point, both Hutson and Kirby feel that their startups aren’t strapped with the same staffing issues others are facing in the home-based care space.
Sprinter’s workforce is primarily made up of phlebotomists. Kirby said they are cross-trained with a medical assistant skill set so they can check vitals without the need of physician supervision.
“They can operate in the home independently, and when you think about the amount of time it takes to train and license someone in this class, it’s weeks,” he said. “Not years or months.”
Kirby also recognizes startups have the advantage of plucking employees away from legacy companies who would rather drive around and work on more innovative processes compared to “sitting in a patient service center all day doing nothing but drawing labs.”
MedArrive’s staffing strategy is different because of the types of care it handles in any given market. The company has contracts with large EMS and paramedic companies in the U.S. and about 50,000 providers in the field.
Like Sprinter Health, MedArrive likes to train, then get employees up to speed and in new markets in weeks, not months.
“We use paramedic staffing companies,” Hutson said. The ones you would traditionally use at job sites, construction sites, to staff a football game on a Sunday afternoon. Then finally once we have matured a market, we do hire outright. So the combination of those three labor models has given us a lot of flexibility.”
Expanding as a startup
Getting a startup off the ground is hard enough. Expanding is a whole other beast.
Kirby said the near-term goals for Sprinter Health is to expand outside of California and to use its national partners to help facilitate that growth.
“Balancing the supply/demand is really tricky,” he said. “We just have to make sure we have enough demand in any new geography to get us to break even, and then our national partnership contracts travel with us. We recognize that in order to tap into some of the larger opportunities, we need to be nationwide.”
For MedArrive, moving from a fee-for-service model to a “true shared-savings model” is one of the next steps for the startup.
“We know we’re delivering lots of value, and we’re excited to be rewarded for that and pour that reward into further expanding our programs,” Hutson said.
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