- J.P. Morgan's health-focused venture arm Morgan Health is investing $50 million in Vera Whole Health, representing its first investment in a coordinated care model, the business said Thursday.
- The investment bank launched Morgan Health two months ago following the high-profile dissolution of Haven, its previous venture to lower employer healthcare costs in tandem with Amazon and Berkshire Hathaway.
- Seattle-based Vera, which is also backed by private investment firm Clayton, Dubilier & Rice, offers a value-based primary care model with 26 clinics in 10 states. The infusion of cash will help it to scale, the companies said.
The investment comes amid rising competition in the primary care market, a traditionally underfunded sector of U.S. healthcare that's received renewed attention, especially from employers looking for strategies to reduce costs while improving preventative care. Startups offering primary care brought in the second-most funding of all digital health startups in the first quarter of 2021, according to Rock Health.
"Our goal with this first investment is to build a strong coordinated healthcare model — with outstanding primary care and new ways to help employees navigate a healthcare system that is often very disconnected," Dan Mendelson, CEO of Morgan Health, said in a statement.
Mendelson, who will join the Vera Board of Directors upon the close of the transaction, was previously founder and CEO of healthcare advisory firm Avalere Health.
Vera's value-based model revolves around whole-person care, including a team of primary care physicians and nurses backed by clinics, a technology platform and health coaching to encourage healthier behaviors.
Unlike many other startups, Vera operates entirely at-risk. Its customers pay a flat per-member, per-month fee for its services, and Vera retains any cost savings for managing their members' health that it achieves.
The startup recently completed a majority stake sale to CD&R for an undisclosed amount. Later, CD&R valued Vera at $400 million.
The new investment from Washington, D.C.-based Morgan Health brings Vera's total venture funding to roughly $100 million.
Vera currently operates primary care centers in Arizona, Washington, California, Oregon, Idaho, Alaska, Texas, Missouri, Kansas and Nevada, and recently established a partnership with Central Ohio Primary Care, the largest independent physician-owned primary care group in the U.S.
Vera will be available to J.P. Morgan employees in select regions this year, and the investment is Morgan Health's first step to begin scaling a coordinated care model for its own employees and those of other employers, executives said.
Coordinated care can also address health equity, which will be a part of Morgan Health's investment strategy, according to Peter Scher, vice chairman of J.P. Morgan Chase, which oversees Morgan Health.
Morgan Health launched in May with $250 million in capital to allocate, roughly four months after Haven shuttered its doors. Haven was unveiled three years ago to much fanfare, then quickly ran into a slew of challenges, including difficulty retaining talent, cementing a clear vision and staying a priority for its three massive parent companies.