Healthcare startup Harbor Health said it has raised $130 million in a recent funding round, which was led by its existing investors General Catalyst, 8VC, and Alta Partners. Tech mogul Michael Dell's family office, DFO Management, also increased its monetary support.
Harbor Health, which was founded in 2022, is a ‘pay-vider,' providing primary and specialty care to its patients as well as its own insurance plans. A portion of the money raised in this round of funding will be used to expand that insurance coverage.
The remainder of the money will be used to improve specialty care coverage in areas like rheumatology, dermatology, cardiology, endocrinology, and mental health.
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"In serving more than 50,000 Central Texans, we see their needs go beyond primary care,” Harbor Health co-founder Clay Johnston said in a statement. "By integrating more specialty providers into our health teams, we’re surrounding each member with the expertise they need. Our insurance plans synergize with the care model so that everything is aligned to achieve the best health possible.”
Healthcare the Harbor way
Johnston came up with the idea for Harbor Health during his time as the dean of Dell Medical School at the University of Texas at Austin. Founded by Michael and Susan Dell, the school's mission is to promote values-based healthcare.
It wasn't hard to improve health outcomes and lower costs, Johnston told CNBC. What was difficult was convincing insurance providers to pay for that care. So, with the Dells' blessing, he quit his post at the medical school and founded Harbor Health with the goal of disrupting the system.
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"The reason we [own the clinics and the insurance policies] is so that we have full control of the dollars, so that we can take responsibility for people's health and use those dollars for whatever makes sense for people to have better health outcomes," Johnston told CNBC. "We can push technologies, and we don't have to be focused on visits."
Harbor Health's investors also see plenty of value in this alternative way of doing things.
"Offering coverage in combination with a condition-specific clinical model that optimizes quality and results is exactly what healthcare needs now for both employers and individuals,” Alta Partners Managing Director Pete Hudson said in Harbor Health’s statement.
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Harbor Health's use of AI
One important tool Harbor Health uses to lower costs and improve patient outcomes is AI. Johnston told CNBC that the company uses the technology to analyze patient data to help predict care costs and to determine whether or not an individual is at an increased risk of developing specific conditions. This allows them to provide increased care to patients before conditions worsen, saving both money and lives.
"We are committed to a new advanced clinical model and payment structure that rewards providers to reduce population health risks and lower overall costs,” Harbor Health co-founder Tony Miller said in the company's statement.
"People want personalized care and clear guidance on how to make lifestyle changes and informed decisions about treatment and costs," he continued. "Employers need better options to keep rising healthcare benefit costs under control. We know we can deliver the plans at a 10% to 20% savings while making the plans richer for the members.”
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