Arlington-based Evolent adds $100M in venture capital as it looks to revolutionize health care industry


Frank Williams, chief executive of Evolent Health, front, with other company executives. The Arlington-based company has 350 employees. (Lexey Swall/For The Washington Post)
October 6, 2013

Arlington-based Evolent Health got off the ground more than two years ago as the battle over health care reform raged on Capitol Hill and beyond. As the shutdown of the federal government last week illustrates, that debate is far from settled.

But to chief executive Frank Williams and Evolent’s other co-founders, it was clear then that the way hospitals deliver and get paid for care was changing, regardless of the political wrangling.

“Even if you did not have the Affordable Care Act, if you think about the overall financial pressure that’s created by the immense cost increases we’ve had on the health care side, I think you have employers or people who pay for health care saying, ‘We need more value for our dollar,’” Williams said.

That’s the primary premise of the software Evolent sells to major health systems. It pulls the organization’s financial and medical information into one platform, allowing them to more easily track a patient’s care from the emergency room to follow-up appointments to the bill.

In just two years, the company has grown to 350 employees at its headquarters and San Francisco satellite office. The firm announced last week it added $100 million in venture capital to its reserves, building on the $24.5 million it had already collected from investors.

The company spun out from the Advisory Board, a consultancy for hospitals. The Advisory Board as well as the University of Pittsburgh Medical Center, one of the inspirations for its software, are among its chief financial backers.

“We all agreed this is really going to require dedicated investment,” Williams said. “You’re going to need to have unique talent and scale, so we decided it would need to be done as a separate organization from the Advisory Board.”

Evolent counts health systems in 15 markets across the United States as clients. In the Baltimore-Washington region, MedStar Health has used the firm’s technology to build its Medicare Advantage Plan in the District, as well as its own health plan for the system’s 36,000 associates and dependents.

“MedStar has significantly increased our investment in information technology software programs over the last three to five years to support our care management approaches, including state of the art electronic health records across our organization, both inside our hospitals and across our physician practices,” Ken Samet, MedStar Health’s president and chief executive, said in an e-mail.

“I believe all health care organizations have a responsibility to be part of the solution for how care will be provided to our communities in the future,” Samet said.

Steven Overly covers the business of technology, biotechnology and venture capital in the Washington region for The Washington Post and its weekly Capital Business publication. In that capacity, he has written about start-up struggles, investment trends and major drug discoveries.
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