There are about 1,400 Federally Qualified Health Centers (FQHCs) in the U.S. providing care to Medicare, Medicaid and uninsured patients in underserved communities—a one-stop-shop safety net for health and wellness that charges a sliding scale. So it might not come as a surprise to learn they lack the resources to help everyone who needs their services. In fact, about 20 million or so low-income people don’t have access to a FQHC, according to Cesar Herrera, CEO and co-founder of Yuvo Health.
“They’re critical for low-income people, but there aren’t enough of them,” he says.
That’s why, about a year ago, Herrera and three co-founders launched their startup with a mission of giving FQHCs access to additional revenues and the wherewithal to expand their reach.
It all relates to the move by policy makers and health plans to value-based care and away from fee for service reimbursement systems. The approach aims to bring down the cost of care, in part, by ensuring people get the services they need early on, so they don’t wind up in the ER, either because they have nowhere else to go, their conditions have worsened due to inadequate care or they have underlying mental health issues that should have been managed more effectively by primary care.
How to make sure people get the care they need before their conditions worsen? The answer is shared savings—that is, savings shared between doctor and health plan—and revamping the incentives for primary care doctors, since they’re the first line of defense making sure patients get the right care at the right time. Thus, under a value-based care system, primary care doctors earn more money for keeping track of the various services their patients need, making sure they receive appropriate care and reporting all that to health insurers. Plus there are added incentives attached to preventive services.
But making that happen requires a new set of operating requirements. That is, primary care doctors need a way to get access to and report relevant patient information. “A whole new machinery needs to be built to support that model,” says Herrera.
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What does this mean for FQHCs? To move into value-based care, they face several barriers. First, they need to build a new infrastructure and many don’t have the resources to do so. Plus, many of them aren’t large enough to compete. And they face regulatory limitations. Specifically, they’re prohibited from taking part in certain potentially lucrative models where there’s a downside risk.
Addressing those barriers is Yuvo Health’s mission. To that end, it has a global contracting system enabling FQHCs to join in aggregate, with Yuvo negotiating contracts on behalf of all participating health centers. So FQHCs that would have been too small to qualify for those contracts are now eligible, because the company negotiates for the collective.
Then there’s the matter of how costly it is to build the necessary reporting, data analytics and data aggregation infrastructure. The company’s managed services system has an administrative component that takes care of all reporting, as well as patient engagement and outreach, transition to care coordination and risk adjustment. “They’re all table stakes functions needed to operate a value-based care engine,” says Herrera. Because it’s centralized, the system can support multiple FQHCs.
As for downside risk, since Yuvo isn’t an FQHC, it isn’t governed by the same regulations. As a result, the company can take on the downside risk on behalf of its customers. That, in turn, unlocks more lucrative value-based care arrangements for participating FQHCs they otherwise wouldn’t be able to tap.
Also, the FQHCs don’t pay the company, so there’s no cost to them. Instead, Yuvo receives a percentage of the shared savings achieved in the back-end. If there are no savings, then the company doesn’t get paid. The upshot: FQHCs face little risk, while gaining access to additional revenue.
“Every new dollar that comes in the door is not padding investor wallets,” says Herera. “It goes directly into serving the community—everything from hiring more doctors to increasing hours of operation.”
Inspired by Personal Experience
Herrera spent his career in health care strategy and operations for Medicaid, Medicare and commercial companies. But he and his and his co-founders, who also have a background in managed care, got the idea for the startup from their own experiences as Medicaid or FQHC patients.
As a child growing up in southeastern Michigan, for example, Herrara didn’t always have health insurance. But there was a FQHC. It wasn’t until many years later that he realized how much the organization had done for his family and his community. “It was an incredibly powerful realization that, if I had not access to this FQHC, I would not have had access to care, unless I went to the ER,” he says.
When Covid hit, Herrera and his co-founders decided it was time to take the plunge and launch their startup. They formed the company with not much more than an idea. Then in April, they closed on a round of about $1.3 million that allowed them to start building out the system. They just closed on their next round of $6 million. The initial market is in downstate New York, where they’ve signed contracts on behalf of their FQHC partners with various health plans. While Herrera says he can’t disclose specifics, the goal is to have contracts covering 25,000 Medicaid members by the end of this quarter .
After establishing a track record, Yuvo plans to move to the rest of New York, where there are different health plans to contend with, and then to other markets in Michigan, Ohio, Pennsylvania and New Jersey.