Privia Health, which seeks to help physician practices remain independent in lieu of massive consolidation occurring in healthcare, is significantly boosting those efforts with a $400 million national expansion.
Backed by an investor group led by an affiliate of Goldman Sachs, the Virginia-based physician practice management group said the expansion is a direct result of the mounting pressures facing independent and large physician groups as they chart their course through the reform-driven landscape. That has often meant merging with or being acquired by larger hospital systems, which for many means a lost sense of autonomy for the sake of stability.
With the $400 million expansion, Privia thinks it can offer the same type of stability and resources that a larger system can, noting that some level of affiliation is likely.
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“We think all physicians need to affiliate with a larger group to survive, but we think physicians should have the options to affiliate with one that is not the hospital,” spokeswoman Kate Slonaker told MedCity News in an email. “Privia’s goal is to provide an alternative to consolidation and enable physicians to remain in private practice, but with access to the same or increased level of capital they would get by affiliating with a health system.”
Privia said it helps seemingly disparate networks of physicians address population health with technology that would otherwise likely be out of reach. It works primarily with independent physicians and large physician groups in partnership with managed care organizations and self-insured health plans.
It also has established an ACO, Privia Quality Network, with nearly 300 providers and currently has more than 220 providers in its Privia Medical Group, all within the Washington D.C. region. It’s goal with the expansion is to have “thousands of physicians as partners over the next few years,” Slonaker said. Privia will prioritize its expansion in the Virginia, Maryland, DC, New York, Atlanta, Florida, Texas, and other “rapidly evolving” markets.
In doing so, Privia will align with companies that are in the portfolio of Brighton Health Group, a Connecticut-based holding company backed by a Goldman Sachs affiliate. Also joining in the funding is Pomplona Capital Management, Cardinal Partners and existing Privia investors Health Enterprise Partners and Morgan Noble Healthcare Partners, according to an announcement by Privia.
Privia is headed by founder and CEO Jeff Butler, who will join the board of Brighton Health.
The national expansion efforts seek to capitalize on the instability of independent physicians, who face three main challenges in the current landscape: the shift from a volume to value-based healthcare system, access to technology that enables that and revenue cycle management.
“As healthcare shifts from a volume to value-based system, doctors have difficulty getting into risk performance-based arrangements with commercial payers that reward for quality and cost savings,” Slonaker said. “This is because small and medium practices need technology, teams of people and work flows in order to measure cost savings and population health. That is very difficult to do alone without the infrastructure.”
The average practice, she said, leaks between 8 percent and 11 percent of collections through revenue cycle management, citing the American Medical Association.
Privia Health was started in 2007. Its subsidiary, Privia Medical Group, serves more than 400,000 patients. Privia said it uses a proprietary cloud-based technology platform, combined with patient engagement and physician-driven wellness, to assist its members.
