K Health, the virtual healthcare provider that uses machine learning to lower the cost of care by providing the bulk of the company’s health assessments, is launching new tools for childcare on the heels of raising cash that values the company at $1.5 billion.
The $132 million round raised in December will help the company expand and help pay for upgrades including an integration with most electronic health records — an integration that’s expected by the second quarter.
Throughout 2020 K Health has leveraged its position operating at the intersection of machine learning and consumer healthcare to raised $222 million in a single year.
This appetite from investors shows how large the opportunity is in consumer healthcare as companies look to use technology to make care more affordable.
For K Health, that means a monthly subscription to its service of $9 for unlimited access to the service and physicians on the platform, as well as a $19 per-month virtual mental health offering and a $19 fee for a one-time urgent care consultation.
To patients and investors the pitch is that the data K Health has managed to acquire through partnerships with organizations like the Israel health maintenance organization Maccabi Healthcare Services, which gave up decades of anonymized data on patients and health outcomes to train K Health’s predictive algorithm, can assess patients and aid the in diagnoses for the company’s doctors.
In theory that means the company’s service essentially acts as a virtual primary care physician, holding a wealth of patient information that, when taken together, might be able to spot underlying medical conditions faster or provide a more holistic view into patient care.
For pharmaceutical companies that could mean insights into population health that could be potentially profitable avenues for drug discovery.
In practice, patients get what they pay for.
The company’s mental health offering uses medical doctors who are not licensed psychiatrists to perform their evaluations and assessments, according to one provider on the platform, which can lead to interactions with untrained physicians that can cause more harm than good.
While company chief executive Allon Bloch is likely correct in his assessment that most services can be performed remotely (Bloch puts the figure at 90%), they should be performed remotely by professionals who have the necessary training.
There are limits to how much heavy lifting an algorithm or a generalist should do when it comes to healthcare, and it appears that K Health wants to push those limits.
“Drug referrals, acute issues, prevention issues, most of those can be done remotely,” Bloch said. “There’s an opportunity to do much better and potentially cheaper.
K Health has already seen hundreds of thousands of patients either through its urgent care offering or its subscription service and generated tens of millions in revenue in 2020, according to Bloch. He declined to disclose how many patients used the urgent care service vs. the monthly subscription offering.
Telemedicine companies, like other companies providing services remotely, have thrived during the pandemic. Teladoc and Amwell, two of the early pioneers in virtual medicine have seen their share prices soar. Companies like Hims, that provide prescriptions for elective conditions that aren’t necessarily covered by health, special purpose acquisition companies at valuations of $1.6 billion.
Backing K Health are a group of investors led by GGV Capital and Valor Equity Partners. Kaiser Permanente’s pension fund and the investment offices of the owners of 3G Capital (the Brazilian investment firm that owns Burger King and Kraft Heinz), along with 14W, Max Ventures, Pico Partners, Marcy Venture Partners, Primary Venture Partners and BoxGroup, also participated in the round.
Organizations working with the company include Maccabi Healthcare; the Mayo Clinic, which is investigating virtual care models with the company; and Anthem, which has white labeled the K Health service and provides it to some of the insurer’s millions of members.