Solera Health Raises $42M to Help Integrate Social Determinants into Healthcare

Solera Health CEO Brenda Schmidt said the company’s differentiator is in payment system, which allows health plans to pay social services providers through same pathway that other healthcare providers are reimbursed. The funding will help broaden the company’s initial focus on chronic disease management to a wider array of services meant to combat barriers to care like food insecurity, economic insecurity, transportation, fitness and social isolation.

By Kevin Truong | May 16, 2019 | This article originally appeared in MedCity News

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Solera Health Raises $42M to Help Integrate Social Determinants into Healthcare

Phoenix, Arizona-based Solera Health, which is looking to build out a network of evidence-based digital health and social services providers, has raised a $42 million Series C financing round from Blue Cross Blue Shield plans around the country as it expands it offerings to address social determinants of health.

The funding will help broaden the company’s initial focus on chronic disease management to a wider array of services meant to combat barriers to care like food insecurity, economic insecurity, transportation, fitness and social isolation.

With the new round, Solera Health’s total funding haul has reached $72 million.

The new fundraise was led by the venture capital arm of Health Care Service Corporation and includes participation from Blue plans in New Jersey, Alabama, Kansas City, South Carolina and California. All told, Solera’s new health plan investors cover approximately 30 million lives.

HCSC and the rest of the strategic investors are all current clients of Solera and part of the new partnership is focused on deepening the relationship between the startup and the health plans by finding new avenues of collaboration. The new funding builds on a previous partnership with the Blue Cross Blue Shield Instituteto help identify and connect specific health plan members that would most benefit from those social or digital services.

“We proved to them the power of our business model in chronic disease management health and as our clients expand into social determinants we can provide the same consumer engagement and member retention and support of value based care,” said Solera Health CEO Brenda Schmidt.

Solera launched in 2016 to simplify the process of identifying and working with hyper-fragmented programs in diabetes prevention space. That eventually led to a range of lifestyle modification programs like hypertension, smoking cessation and weight management.

The expansion into social determinants of health is part of a bigger wave among healthcare stakeholders looking to tackle issues that often have a greater impact on patient health than actions in the clinic.

A number of companies have sprung up meant to connect providers and patients to social services that exist outside of the clinical walls. Earlier this month, Kaiser Permanente announced the creation of Thrive Local, a social health network meant to connect healthcare and social services providers.

The network was developed in partnership with New York-based Unite Us, which offers software that allows providers to refer out to social services, track outcomes and collaborate on care with community partners.

Where Schmidt said Solera’s approach differs is in its payment innovation, which allows health plans to pay social services providers using the same pathway that other healthcare providers are reimbursed.

“It seems like there’s this rush among health plans to prove that they’re addressing social determinants of health but they may be making buying decisions that longer term may not impact the quality of care,” Schmidt said.

“For those social services that are driving an improvement of clinical outcomes, they should be paid out like any other healthcare provider.”

In Solera’s system, a local service providing transport to a dialysis appointment could be paid out of medical claims and a community organization addressing food insecurity could be given a portion of the healthcare savings driven by its services.

Traditionally, these local organizations have outside of the traditional healthcare business model, instead relying on variable funding mechanisms like grants to keep the lights on.

Solera’s approach to using healthcare cost savings and medical claims is intended to provide these organizations and social health providers a sustainable financing by making them a part of the larger healthcare system. The company helps to build out infrastructure and expertise for social health providers so they can meet the security, technological and regulatory rigor necessary to work within the medical claims process.

Through this process, the cost for these social health services get shifted to health plans’ medical spend category, incentivizing greater investment in solutions that can overcome barriers to care.

Schmidt said Solera’s model will help to keep these local community-based providers viable as larger venture-backed vendors enter the social determinants space.

“We’ve seen in our results that these community-based organizations have significantly better outcomes in reaching those underserved populations that are difficult to help,” Schmidt said. 

For the health plans, Solera also provides a valuable service in documenting the results of providers, helping to determine the apps or community-based solutions that are not driving value and pruning them from the network.

The new capital will allow the company to hire more staff to manage new clients and build out its network into new areas of focus. One particular point of investment will be in company’s data science capabilities to allow for better predictive matching between patients and the services or organizations that would be most relevant for them in driving better health outcomes.

Schmidt said the company expects to grow to around 200 employees by the end of the year.


Image credit: Phoenix Business Journal

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