JPMorgan’s new health business makes inaugural investment in start-up Vera Whole Health

A woman walks past JPMorgan Chase & Co’s international headquarters on Park Avenue in New York.

Andrew Burton | Reuters

JPMorgan Chase’s new healthcare unit has made its first investment, CNBC has learned exclusively.

The bank has agreed to invest $ 50 million in Vera Whole Health, a Seattle-based startup that is pioneering a new subscription model for employee health care.

In addition, through the bank’s Morgan Health unit – a new business unveiled in May following the collapse of a joint venture with Amazon and Berkshire Hathaway – JPMorgan will offer Vera’s services to its employees during the welfare enrollment season this fall, announced the company.

Vera was founded in 2008 and aims to improve results for workers and reduce costs for businesses by making primary care teams accountable for workers’ health. Companies pay a monthly flat rate per patient and family doctors are responsible for coordinating the entire care of their users. The so-called advanced care model requires Vera to operate clinics or to work with them that work fundamentally differently than the prevailing system, according to Vera CEO Ryan Schmid.

“In a traditional model, providers are paid according to the scope of the procedure; it is a very transactional system that, in my opinion, creates some perverse incentives,” Schmid said in a recent interview. “In our mentoring model, our teams receive a salary plus bonus, and this bonus is specifically linked to their results.”

In fact, JPMorgan will be one of the first major employers to partner with Vera, offering a real test of a paradigm shift that could address one of the thorniest problems facing the US: Despite spending trillions of dollars on medicine, Americans’ health has been down deteriorated in recent years.

While the use of Vera will be optional for JPMorgan employees, it provides a “higher level of care” that is likely to be received once the benefits are appreciated, said Dan Mendelson, CEO of Morgan Health.

A higher standard

The start-up’s approach involves a more holistic view of an employee’s health than just focusing on physical complaints; Greater patient engagement and an emphasis on mental wellbeing may be more likely to detect or, in some cases, prevent disease, he said.

“We want to know that our employees are screened for cancer,” said Mendelson. “We want to know that our employees make wellness visits so that if they have high cholesterol they are actually taking their medication.

Since it’s not an easy-to-implement model, only employees in select regions will have access to Vera this year, Mendelson said.

Vera operates primary care centers in ten states; It also works with Central Ohio Primary Care, the largest independent US primary care group owned by physicians. JPMorgan operates a technology center in Columbus with several thousand employees, making this region a likely candidate for the service.

The advanced care model is more common with Medicare providers, but has yet to gain prominence in employer-sponsored programs, Schmid said.

The partnership came about through a relationship between the private equity firm Clayton Dubilier & Rice and Morgan Health, the companies said. Clayton recently acquired a controlling interest in Vera, which valued the company at $ 400 million.

“This has never been done on this scale, which we are doing with Vera, working with JPMorgan and Central Ohio Primary Care, to develop a model that focuses on improving outcomes and reducing costs for the population under 65 “said Ravi Sachdev, a Clayton Dubilier partner and former JPMorgan healthcare banker.

“We couldn’t pioneer without someone like JPMorgan saying, ‘This is really important to us, we want to be part of the solution,'” Sachdev said.

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