Improving healthcare, growing strong
The bold idea
Farzad Mostashari, M.D., knew small, independent primary care physicians (PCPs) were in the best position to succeed in the new value-based care policies taking shape in Washington, D.C. As head of the Office of the National Coordinator for Health Information Technology with the U.S. Department of Health and Human Services (HHS), Dr. Mostashari directed the development of an IT infrastructure designed to reduce costs and improve patient outcomes.
In 2014, Dr. Mostashari left Washington and launched Aledade with seed funding from Venrock. Aledade's mission is to help PCPs organize into accountable care organizations (ACOs)1 to provide them with the benefit of data analytics, technology, regulatory expertise, strong payer relationships and local, hands-on guidance to reduce healthcare costs — all while sharing the savings.
The partnership
The Silicon Valley Bank team met Dr. Mostashari through Dr. Bob Kocher, a partner at Venrock and friend of the bank. Dr. Kocher served in the Obama administration as special assistant to the president for healthcare and economic policy during Dr. Mostashari's time with HHS.
Although Aledade's future seemed promising at the time given its strong leadership and financial backing, there were a number of unknowns:
- An unproven, uncharted territory based on new policies
- Cost savings would be calculated only once a year
- No guarantee of targeted cost savings for participants
SVB understands the complexities of our business and industry. They developed customized financing solutions for us, so we can keep our focus on helping physicians across the country deliver better care for their patients. We are thrilled with the results.”
The solution
SVB understood the promise of the Aledade business model and started its banking relationship with the company in 2014 with a small $2 million growth capital term loan, which was made alongside a $4.5 million seed round led by Venrock. As Aledade demonstrated its ability to execute on its plan, SVB expanded its solutions to include more debt and access to letters of credit. SVB's creative approach to lending against unbilled receivables provided Aledade with the credit it needed to help finance its continued growth.
The impact
In 2022, Aledade announced that its 1,100+ independent primary care practices, which care for 1.7 million patients across 37 states, had created over $800 million in total savings to the healthcare system during the Past seven years. Aledade is helping support a more cost-effective, high-value healthcare system.
