An investor presentation lays out how a key healthcare partner for Amazon is thinking about the future of its business

• Crossover Health just raised $168 million in a round led by Deerfield Management Company. 
• The buzzy startup works with companies like Amazon to set up clinics and telehealth for employees.
• “Virtual-first” primary care like Crossover’s is emerging as a popular tool to cut healthcare costs.
• See more stories on Insider’s business page.

Crossover Health, a healthcare startup, just raised $168 million in a round led by Deerfield Management Company. 

The latest raise is another sign that hands-on primary care is heating up as a way to boost employees’ health over the long-term and save employers money. Crossover offers exams, women’s health, chronic illness management, and much more through a combination of online appointments and the clinics it builds for employer clients.

With now 400,000 people under its purview, Crossover is heading for $165 million in revenue in 2021, according to a presentation that Shreeve gave at the annual J.P. Morgan Healthcare Conference in January, seen by Insider.

Roughly 26% of those are Amazon’s employees, according that presentation, as the two companies starting in 2020 rolled out Crossover’s clinics and services to five metropolitan areas around the US. 

Here’s the presentation that Shreeve gave at the conference, which details Crossover’s revenue growth, business model, and vision for disrupting healthcare. It has been edited for brevity.

Crossover was founded in 2010 in California.

It got started by two surfers, Dr. Scott Shreeve, an emergency medicine physician, and Nate Murray, who worked at health plans. Shreeve is the CEO, and Murray is the chief business officer.

Crossover says it can reduce employers' healthcare costs by 15%. The idea is that you can save money on surgeries, urgent care visits, and chronic conditions if you invest in a population's health on the front-end.

Crossover offers two kinds of multi-year contracts to employers. One means they pay for a set of services for a given employee population in bulk. That typically covers the cost of building the on-site clinics and the healthcare they provide. The other kind is where employers pay Crossover based on the number of their employees who are using it each month. That typically covers near-site clinics or virtual care, according to the company.

Crossover's clients include the likes of McKesson and Apple. Over time, Crossover can cover more and more of an employers' population, allowing the company to expand its revenue and members with existing customers.

Employers insure about half of Americans and spend more than $880 billion on healthcare each year, and they're eager to lower costs.

Crossover offers a single delivery ecosystem that works together to manage a person's overall health, including medical professionals and the technology to connect them with each other and to members.

Crossover built its own electronic health record, which houses patient data in such a way that care teams can monitor more than 40 clinical conditions for each member, Shreeve said during the presentation.

Like other companies that provide virtual care, Crossover was used a lot more by employees once the coronavirus pandemic started.

In moving from getting paid per visit to based on how well a patient is cared for, Crossover takes on some financial risk. It works with employers to create a budget for the year depending on their cost expectations. Sometimes it has to pay for the difference when the budget is too low based on what kinds of services folks are using, and how often.

Crossover can largely meet employees where they're at, whether that's an Amazon warehouse or at home.

Crossover's homemade tech shows has messaging features, patient history, and scheduling. It also has a dashboard for users that can route them to the right care.

Crossover essentially employs four "layers" of care: virtual or in-person triage, so deciding what patients need, primary care, which can include health coaching and fitness, health monitoring for conditions, and navigation, wherein Crossover routes people to designated specialists.

Crossover is licensed in all 50 US states. Its clinics with Amazon are in Texas, Arizona, Kentucky, California, and Michigan.

A bump in primary care spend leads to an overall decrease in healthcare cost, Crossover said. That's in large part because Crossover can help manage people's chronic conditions, which are a big part of overall spend in healthcare.

Crossover is on track to earn $165 million in 2021 due to more work with existing clients and the new relationship with Amazon, Crossover's Chief Financial Officer Mark Nelson said during the presentation. The company has been growing annually by 25% in recent years, he said.

Crossover shared some ideas for future growth, like mergers and acquisitions. Shreeve didn't elaborate on potential consolidation with other companies.

"We're now expanding to the payers and we're bringing this unique and comprehensive primary health model that allows you to create a coordinated, organized, connected system of health across the country," Shreeve said.

Source: Read Full Article