Last month, primary care services and technology provider UpStream Healthcare announced it had raised $140M in its latest funding round. The company says the money will enable it to scale nationwide. This will mean helping more primary care practices in the US move into value-based care (VBC), and increasing income from reimbursement contracts for senior Medicare and Medicare Advantage patients. 

However, if it is to successfully scale the business, UpStream will need to address several customer pain points.   

The Signify View 

We have written regularly in recent Insights about how VBC is steadily transforming primary healthcare models in the US. With neither the technology nor resources of large health networks, independent practices find it harder to transition to VBC. In response, an ecosystem of technology and service providers, including UpStream, has emerged to support this transition.   

Solid Foundations 

UpStream was established in 2018, and occupies a solid position in US primary care management. Its technology platform (powered by Innovaccer) helps around 2,900 physicians co-ordinate care for approximately 175,000 senior patients on Medicare plans. The company claims it has helped its customers (mainly small, independent practices) reduce in-patient and post-acute spend by 20%. This aligns well with VBC principles. 

Tech Pain Point 

With a $140M war chest, UpStream can now work towards its scaling up goals. Success will hinge on it addressing several customer pain points that currently stand in the way of them achieving true VBC. 

The first challenge for any primary care practice when operating under a VBC-based contract is understanding its population. It needs a longitudinal view of all its patients’ healthcare interactions. Not just those provided by the practice in question, but interactions with hospitals, specialists, community service providers, out of network providers etc. However, for most the IT required to do this is not in place. While large health systems have the resource, budgets and technical knowledge to put in place IT that aggregates data from these multiple sources, independent practices and smaller networks face a huge challenge.

A recurring complaint from primary care practice decision makers is the lack of interoperability between the platforms they need to aggregate data across to obtain this longitudinal view, and the heavy lifting required to do this integration and data aggregation. Each practice has its own EHR, but this only provides a narrow view of each patient’s full health history. When the providers’ need is to pull information to obtain a longitudinal view, manual processes must typically be followed. Buyer demand is for solutions that provide an automated route to obtain this combined view using IT. This includes not just clinical data from EHRs, but also payer data, data on the patient’s healthcare journey, or information from regional HIEs. Such visibility and understanding of the population lies at the heart of VBC. Without it, a practice cannot prioritise patients or develop a clear workflow strategy to care for them.

Independent practices also lack the resources, expertise or time to buy, implement and manage technology to alleviate these pain points. However, there is an appetite among some to invest in technology and care management solutions if they can envisage a return on their investment in the form of increased revenue from reimbursements under VBC contracts. PCPs prefer upside financial risk where they will not be penalised for not reducing healthcare costs/meeting targets. UpStream offers monthly Guaranteed Advanced Payments for Quality (GAP-Q), completely opposite to the traditional VBC contract where physicians wait for reconciliation with a payer. 

Instead of practices having to procure and implement the PHM technology needed themselves, UpStream does this for them and provides a service to support the data integration process. Further, it can then also provide the expertise, care management services and IT that allows for risk stratification and care co-ordination processes to be followed. This is essential for providers looking to maximise revenues under VBC contracts such as Medicare Advantage.

Age Old Problem 

Another challenge facing some independent practices relates specifically to senior care, which is UpStream’s focus area. Decision makers describe the difficulty practices face engaging with this population segment, whether in scheduling appointments or encouraging them to visit a primary care physician. Many seniors, for example, prefer to consult a specialist rather than primary care physician. Furthermore, social determinants of health (e g food security, housing, transport and mental health) play a bigger role in this segment. These factors all make it harder for practices to operate under VBC contracts when supporting this patient cohort, purely from a “patient activation” perspective. 

Formidable Partnership 

UpStream is well placed to address the technology pain points described above. The company’s platform is powered by Innovaccer, which has a good track record of data integration and a renowned PHM solution. Innovaccer already has integrations with hundreds of EHRs, meaning it can quickly integrate new customer EHRs into its platform. Unlike IDNs, which tend to prefer to buy their PHM solutions from their EHR vendor. The platform also has the potential to use artificial intelligence (AI) to run risk segmentation, though this depends on robust and comprehensive data which offers a full, longitudinal view.

Addressing patient engagement problems will be more challenging. UpStream will need to invest a sizeable chunk of the $140M to build teams to engage with patients to set up appointments, make sure they attend annual wellness visits, and follow care plans. This labour-intensive approach introduces potential problems with staff burnout and staff retention. 

While these are unwelcome (and costly) by-products of providing senior care, this is a potentially rich seam of business if UpStream can adequately resource its customers. This is where the real rewards of Medicare and Medicare Advantage reimbursement lie, and cracking this code will put the company in a very strong competitive position.

Competitive Ecosystem 

UpStream is one of a growing number of so-called practice management company/managed service organisations which have emerged to meet growing demand for care management technology and services. There are some big hitters here: Signify Health (whose model has similarities to UpStream’s) was bought by retail pharmacy chain CVS last year for $8B. VillageMD bought urgent care provider Summit Health for $9B, also last year. CareCentrix, Agilon, Privia and Tebra also vie with UpStream in this market. All have a common goal: to help healthcare systems, payers and independent practices make more money from VBC.  

Big tech and the large retail pharmacy chains are also starting to bulldoze their way into primary care. Amazon lost out to CVS in its bid to buy Signify Health last year, but the logistics giant has unfinished business in this market. Other retail pharmacy chains like Walgreens are also making inroads. It is estimated that this year retail primary care clinics will account for double the share of the US primary care market than they did in 2022.

UpStream and its rivals will watch these developments with interest, but with few real concerns in the short- and medium-term. 

Cottages to Consolidation 

In the long run, the ‘cottage industry’ nature of the market will give way to greater consolidation. Independent practices will be squeezed out, and some will be bought by the larger companies.

That may well be the fate that eventually befalls UpStream, whose target customer base of independent practices is slowly shrinking as they are swallowed up by IDNs. For now, however, the potential for new customers in primary care technology/services outweighs the losses of a declining total available market. 

With $140M ready to deploy, and an excellent ally in Innovaccer, UpStream is set to scale. If it can help its customers better engage with patients and deliver true VBC, the company has excellent medium-term prospects. In truth, current funding may be insufficient for UpStream to scale nationally, but expanding to 20 states over the next 12 months will still be a success. And from there, future investor interest should be forthcoming.