Investing in Waymark
“Equal means everybody gets the same. Equity means everybody gets what they need…These are issues of the 21st century that are now on our collective watch. And the question is, what are we going to do about it?”
– Bernard Tyson, former CEO and Chairman of Kaiser Permanente
Bernard Tyson was a close friend of our firm, in particular of my partner Ben Horowitz, and the ideals that he brought to his leadership role in healthcare continue to pulse through the fabric of the CFI bio/healthcare team. He fiercely valued community, a concept he called “total health”, and health equity: the idea that each patient deserves both the medical and non-medical resources that they need to achieve their own personal health. We believe Bernard would be proud of the community-based care platform that the team at Waymark is now building to serve Medicaid patients, and we are honored to be co-leading Waymark’s inaugural financing.
Why Medicaid? Can a big business even exist in this market?
Medicaid provides coverage for >80M lives in the U.S. (that’s nearly 1 in 4 Americans), and drives over $650B in total healthcare spend (that’s 1 in 6 dollars spent in the healthcare system, and more than half of total spending on long-term support services). Due to COVID, as well as state-level Medicaid expansion under the Affordable Care Act, the number of Medicaid enrollees is expected to continue to grow further in 2022. By contrast, Medicare Advantage (where there has been the greatest proliferation of value-based digital health entrants) and traditional Medicare currently provide coverage for 26M and 46M lives, respectively.
While Medicaid is administered by individual states, over two-thirds of Medicaid lives (and spend) are managed by Medicaid Managed Care Organizations (MCOs): private companies that administer and take on full-risk for Medicaid members. This is analogous in some ways to Medicare Advantage plans, but with several key differences: MCOs bid for their contracts through competitive public, state-level RFPs; MCOs serve patient populations with fundamentally different demographics and clinical needs, and although MCOs themselves do receive capitated (vs fee-for-service) payments, their ability to engage individual providers and practices in alternative payment models and value-based incentives has historically lagged behind the penetration of such models in Medicare Advantage (see Table 2 in this whitepaper).
Thus, we see a confluence of market themes: a growing Medicaid population (and rising expenditure), an urgent need to address health disparities amongst our most vulnerable patients, and eagerness on behalf of MCOs and Medicaid programs to invest in more outcomes-aligned care delivery models. Together, these create the unique opportunity for a new Medicaid-focused platform company to achieve both outsized public health impact and business scale.
So the question is, what are we going to do about it?
What if a new company could enable existing Medicaid primary care providers (PCPs) – an incredibly dedicated and tireless group – in delivering the kind of care that they so ardently wish our current healthcare system supported? Waymark is building the technology and infrastructure layer to do exactly this: empower and extend Medicaid-focused primary care practices all across the country.
There are a host of interventions and care models that have already been proven to be effective for Medicaid patients. These ideas have been tested rigorously, and trialed in real-world pilot studies; rolling them out to our patients would be practicing evidence-based medicine. So why aren’t they part of our standard clinical practice? Most of these interventions – connecting chronic disease patients with community health workers, or facilitating regular pharmacist-led telehealth visits – cannot be easily funded by fee-for-service reimbursement rails. They require our system to recognize, and pay for, health outcomes.
Waymark’s core thesis is that a set of carefully prioritized, community-anchored interventions will not only advance Medicaid patient health outcomes, but will also ultimately more than pay for themselves by saving our healthcare system (and patients) unnecessary and avoidable costs. At once both a software company and a clinical services company, Waymark will use data and software to guide and streamline the evidence-based activities of community health workers, pharmacists, and existing primary care team members. Rather than replacing or adding new primary care clinics, Waymark is committed to supporting the existing base of Medicaid PCPs – by extending the resources and technology that they have available, and by working hand-in-hand with them to improve the health of the communities in which they are already embedded.
A bold mission requires a bold team
Bernard Tyson famously said, “Don’t ask permission to help improve the lives of the people and communities you’ve pledged to serve. Instead, march through the doors of red tape, make bold moves, and usher in access.” Indeed, taking on a mission to sustainably improve the healthcare of 1 in 5 Americans – as a startup – is no small feat and will require a team to make bold moves.
I first met Rajaie Batniji several years ago on the internal medicine wards at Stanford Hospital. He was a clinical mentor to me and someone I deeply admired: both a physician and an early trailblazer in the digital health space, as co-founder of his prior company Collective Health back in 2013. He has built and grown startup teams, and has experienced both optimism and realism in the world of healthcare tech. When we learned that Rajaie was teaming up with co-founder Sanjay Basu, a Medicaid-facing PCP himself and a leading population health researcher, data scientist, and epidemiologist, the decision to back Waymark was easy. Since then, the team has grown like a special forces unit to include a carefully selected group of extraordinarily talented leaders, and I cannot wait to see their impact.
We’re thrilled to be partnering with the Waymark team, and joining the company’s board. If improving access to healthcare – particularly for those who need it most – is a mission that resonates with you, please reach out to any of us or consider joining the team!
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