Bright Health grows tech service business with value-based provider
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Bright Health’s tech services arm has nabbed another provider group, cementing the Minneapolis, Minn.-based insurtech’s strategy of growth through acquisition.
NeueHealth announced on Wednesday it paid an undisclosed sum to acquire Miami, Fla.-based Centrum Medical, a value-based primary care practice. With the acquisition, NeueHealth now manages 78 clinics that serve 160,000 Medicare, Medicaid and commercial members in value-based relationships, and plans to expand its provider enablement business to Texas and North Carolina.
“NeueHealth is building and operating high-performing, local, integrated systems of care across the country,” NeuHealth CEO Sam Srivatava said in a statement. “The Centrum team, seasoned in successfully managing risk and providing culturally focused, value-based care, is a terrific addition to the NeueHealth family and will support our continued expansion across the country.”
Bright Health launched in 2017 as a startup health plan aimed at disrupting the health insurance exchanges, and was co-founded by former UnitedHealth Group CEO Bob Sheehy. The company’s current CEO, Mike Mikan, is also a veteran of Minnetonka, Minn.-based UnitedHealth Group, where he held a variety of executive roles from 1998 to 2012. Bright Health counted 623,000 total members according to an S-1 filed with the U.S. Securities and Exchange Commission in May.
The company unveiled its plans for its NeueHealth arm in its S-1, saying it launched the subsidiary in 2020 by acquiring a pair of provider groups based in Florida. Often compared to UnitedHealth Group’s Optum subsidiary, NeueHealth is designed to help primary care practices move towards value-based relationships.
The insurer’s investment in technology that helps providers manage patient risk hits on one of the hottest tech trends at the moment.
In April, Agilon Health saw its share prices soar 38% during its IPO, with investors valuing the Long Beach, Calif.-based physician enablement startup at $1.07 billion. In May, Privia Health generated nearly 51% more in cash than investors initially expected during its public debut, bringing the Arlington, Va.-based company’s valuation to $1.87 billion.
Last week, Brad Smith, who led the Center of Medicaid & Medicare Innovation, launched Main Street Health, which aims to use tech to transform rural providers from fee-for-service to value-based contracts. Smith also headed and eventually sold home care company Aspire Health to Anthem for $440 million.
By launching NeueHealth out as a separate provider enablement business, Bright Health could be looking to differentiate itself from a crop of health insurance startups that also recently went public. Clover Health, Oscar Health and Alignment Healthcare all went public in 2021.
Bright Health raised the most of all these companies during its IPO in late June, in a debut that slightly disappointed investors but still raised $924 million on a valuation of approximately $12 billion.