Episode 6 of Healthcare Beans podcast

Cityblock Health is a unicorn startup serving high quality healthcare to low-income communities.

Episode takeaways:

(1) There are several high profile companies supporting the nation's transition to value-based healthcare. Cityblock Health is at the forefront. Here's a short list: Oak Street Health, Iora Health, Lumeris, and UniteUs.

(2) Managing healthcare spending for complex, low-income patients is not an easy task - many smart, dedicated people have tried and failed.

(3) Addressing the social determinants of health may be the determining factor for long-term success - not just for Cityblock Health, but for the entire sector.

~ James

Transcript

Hello and welcome to Healthcare Beans, I’m your host James Haven. In this episode, I’m going to focus on a rather interesting startup in value-based healthcare. On Healthcare Beans, I often talk and write about the many federal and state programs which address some really big challenges in healthcare (mostly around lowering healthcare spending or expanding access to good healthcare) and to be fair, the results of these government programs are kind of mixed.

Many of these programs fall under some sort of accountable care model and these models try to connect physician (or hospital) payment to patient health outcomes; to put it simply, this means good doctors are rewarded for delivering good care, and bad doctors are financially penalized.

But again, the results of these programs are mixed; many of them have not actually reduced the cost of healthcare (at least not in any significant way), and only a few programs show some promise in doing that in the near future.

Outside of government programs, there are many interesting and valuable developments in the private sector, and in the end, it wouldn’t be surprising if healthcare companies make some real lasting changes in terms of lowering the cost of healthcare and improving our health outcomes.

And the companies I’m currently thinking about use different types of data along with specialized care teams in order to manage (or drive down) healthcare spending. These companies (that I think are worth keeping an eye on) are Oak Street Health, Iora Health, Lumeris, Unite Us, and Cityblock Health. And I include these company names with links in the show notes, if you’re interested in learning more about them.

So with that, I’d like to dive more deeply into Cityblock Health. Cityblock is headquartered in Brooklyn NY, and operates across NYC, Connecticut, Chicago and Washington DC. The company specializes in delivering quality healthcare to low-income patients. Now, when you hear “low-income” a few key points come to mind.

Low-income patients often have more health problems than people with average incomes, and this is a well-known pattern coming out of numerous studies in Medicare and Medicaid. And because low-income patients have more health problems, they’re much more expensive to care for; they’re more likely to end up in the emergency room, and more likely to be hospitalized.

And perhaps most importantly, low-income patients have social service needs that are often unmet. And that could be a lack of transportation, or unstable housing, not having enough nutritious food, being socially isolated... so not having nearby friends or family – and studies have shown these types of social problems play a huge role in poor health outcomes.

Going back to Cityblock Health, the company just completed Series C fundraising and is currently valued at over $1 billion, so perhaps there’s an IPO in the near future. And early reporting suggests the company’s healthcare delivery model can reduce unnecessary health spending among complex patients. All in all, I’d love to invest in Cityblock Health if given the chance (it’s a very exciting company), but at the same time, it’s really important to understand just how difficult it is to truly reduce healthcare spending (emergenc...