Summary List Placement
Primary care, and healthcare more broadly, is largely one-size-fits-all in the US.
A growing group of entrepreneurs and investors are trying to dismantle it and rebuild a more equitable healthcare system in its wake.
One such startup is Folx, a consumer healthcare startup for LGBTQIA+ patients, although there are tens more startups hoping to build trust among other long-neglected and underserved communities of patients.
On Tuesday, Folx announced it raised $25 million in Series A funding from Bessemer Venture Partners, Polaris Partners, Define Ventures, and Red Antler.
Although Folx is launching with direct-mail hormone replacement therapy treatments for transgender patients, founder and CEO A.G. Breitenstein told Business Insider of her long-term goals to unseat traditional care avenues for the LGBTQIA+ community, which is often discriminated against in traditional primary care settings. In the coming years, Breitenstein sees Folx drastically expanding the conditions it is able to treat through telemedicine in addition to expanding into owned-and-operated in-person clinics across the country.
“Discrimination is newly legal,” Breitenstein said of the Trump administration’s retraction of protections for transgender patients. “It allowed providers to discriminate against our community. Care has always been unstable for them, but we can be there for them and that’s what we’re here for.”
Startups like Folx want to reimagine the US healthcare system based on overcoming patients’ negative experiences, and that means building new models that don’t rely on the current network of doctors and clinics.
“Our big takeaway is that other groups have underestimated the immense market size for advances in healthcare for distinct populations,” Bessemer Ventures Partners investor Morgan Cheatham told Business Insider. “We’re more bullish than ever that these niches aren’t so niche.”
That could contribute to a boon of highly specialized care startups, Cheatham said, in addition to those like his latest investment, Folx, that are already seeing growth among target populations. In fact, he said niche care could become the default for all primary care in the United States after the massive inequities were unearthed during the coronavirus pandemic.
Underserved patients need new healthcare solutions
Since 2014, highly targeted healthcare companies like Folx have collectively raised more than $1 billion, according to Pitchbook data.
The future of primary care could look like Cityblock Health, a $1 billion startup serving primarily low-income communities by addressing external factors like access to reliable transportation and clean drinking water as part of its holistic healthcare model. Its goal is to offset medical costs by addressing those factors, leading to better long-term health in the community.
Until recently, investors didn’t consider these external factors, now commonly referred to as the “social determinants of health,” as a key area of cost reduction and innovation, one investor told Business Insider. It took a pandemic, and the cracks in the system it illuminated, to prove the environmental aspects of many Americans’ health. Now, it is an area of top investment for VCs going into 2021.
The future could also look like Oak Street Health, a more traditional primary care clinic model for elderly patients on Medicare, or ChenMed, for seniors with complex chronic conditions that need to be actively monitored by doctors. Oak Street went public in August, giving an air of legitimacy to the growing eldercare space.
Startups like One Medical have a broad-strokes approach to primary care but tend to focus primarily on city-dwelling young professionals with a subscription-based payment model and perks like cucumber water in waiting rooms. Village MD is another primary care startup with a broad appeal that works with physicians to provide care and has in-person clinics in select Walgreens locations. Those companies’ successes, however, have helped paved the way for tech-enabled challengers to grow while serving other groups that aren’t able to afford or access care through their networks.
Of more interest to Cheatham and other VCs are the communities that don’t yet have tailormade healthcare solutions. He pointed to communities like recent immigrants, undocumented individuals, low-income communities, and even racial or ethnic-specific groups as developments he is hoping for in primary care.
“The One Medicals of the world focus on the upper end of that income spectrum, but there’s a lot of work to do on the other end,” Cheatham said, referring to the membership-based primary care model primarily targeted at healthy, working-age upper-middle-class patients.
Healthcare equity will have to come from outside
Getting patients to trust upstarts, a monumental task in healthcare broadly, still remains a challenge for the community-based care companies. Winning them over requires an entirely new perspective on medical care and clinic experience, Breitenstein said, even if that perspective comes from someone largely outside the existing system.
That approach involves lots of educational materials, Breitenstein said, so that patients know of and are able to adjust to complications from medications and make informed decisions about their own courses of treatment.
That “informed consent” model differs from traditional symptom-based care in that it is more proactive and takes more stock of a patient’s lifestyle and goals, Breitenstein said, all in an effort to win patients’ trust.
“The paradigm shift around informed consent model of care, where you come to us and tell us what your goals are so we can help educate and guide you through the healthcare system, it’s informative and empowering,” Cheatham said, adding that he sees the model moving into other aspects of healthcare in the future.
Breitenstein has big ambitions for Folx and believes the market opportunity is large enough to support its growth. Beyond adding new capabilities like STI testing and mental health visits, she sees Folx expanding into in-person clinics across the country that could eventually include surgery centers for gender confirmation surgeries. She also has an eye on family planning and fertility, an already booming market with several startups serving heterosexual couples.
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