Arlington-based Privia Health raised a staggering $400 million from a group of investors anchored by Goldman Sachs, the company announced last week, a pot of money that it will use to expand its network of physicians beyond the Washington region.
Privia Health got its start in 2007 creating software that connects doctors with patients and the circle of caregivers who help keep them healthy, such as dieticians, home-care nurses and pharmacists.
Through secure electronic messages and phone calls, Privia Health’s technology could help doctors keep closer tabs on patients, particularly those with chronic conditions or who may otherwise need regular attention, so that they avoid expensive hospital stays.
“We live in a world where you are in a relationship with a physician. You are hearing from that physician on a weekly or monthly basis with information that’s relevant to your care,” chief executive Jeff Butler said.
Many patients may not live in that world just yet, but that’s certainly where a number of health-care professionals see the industry headed.
The passage of the Affordable Care Act and changes to the way doctors are reimbursed for their medical services — primarily the shift toward payments for keeping patients healthy as opposed to just treating them when sick — made some doctors consider leaving their private practice to become part of a larger hospital system, Butler said.
The rationale, Butler said, is that large hospital systems have the financial resources to absorb increased health-care costs and invest in the technology needed to more closely monitor patients.
“We think that shouldn’t be the only option for a physician going forward,” Butler said.
That’s how Privia Medical Group came to be. The network of physicians — 220 and counting across Maryland, Virginia and the District — effectively acts as one large medical practice with each doctor owning a piece of the business.
Butler said the arrangement allows doctors to use Privia Health’s technology and form relationships with health-care plans as a collective, while still maintaining control over how they run their practice day to day.
“We feel like we strike the right balance between practice autonomy and the advantage of being part of a medical group,” he said.
Now, the company has $400 million to fund an expansion into Texas, Florida, Georgia and New York, as well as other parts of Maryland, Virginia and the District. Butler said the funds will also be used to acquire complementary businesses.
The money was put into a holding company called Brighton Health Group, which now wholly owns Privia Health as a subsidiary.