Waymark Raised $45 Million To Build A Community Health Worker Brigade For Medicaid

Feb 26, 2022 6 min read
Waymark Raised $45 Million To Build A Community Health Worker Brigade For Medicaid

Originally published by Forbes on January 4, 2022

Almost any doctor treating low-income communities has come across a diabetic patient who bookends each month with an emergency room visit. At the beginning of the month, it’s a high blood sugar episode, and, at the end of the month, it’s a low blood sugar episode. “There's nothing biological about that,” explains Sanjay Basu, 41, a primary care doctor and cofounder of the healthtech startup Waymark. “It's because oftentimes people on Medicaid are food insecure.”

On the first of the month, the patient uses food stamps to stock up on groceries and ingests too many calories, making her blood sugar spike. But by the end of the month, she’s most likely going hungry and not getting enough calories. Both scenarios are wreaking havoc on the balance of insulin and glucose in her body. The solution is straightforward, Basu says, but it requires a level of coordination that is often lacking in the government-funded health insurance program for low-income Americans. The patient’s doctor needs to connect with local pharmacists who can provide insulin education to help her better manage the insulin swings and social workers who can help secure food towards the end of the month.

Filling that coordination gap is where Basu hopes his company, San Francisco, California-based Waymark, will come in. On Tuesday, it emerged from stealth with $45 million in Series A funding to embed trained community health workers and workflow management software in primary care practices across the country to try and move the needle on value-based care for Medicaid patients. Andreessen Horowitz and New Enterprise Associates co-led the round with participation from Lux Capital and angel investors. “Our fundamental goal is to catalyze change with Medicaid by making it really easy to implement and pay for care that's proven to work,” says Waymark cofounder and CEO Rajaie Batniji, 40, who previously cofounded health insurance unicorn Collective Health.

Batniji and Basu have spent nearly two decades studying healthcare costs and outcomes around the world as physicians, academics and entrepreneurs. The duo first met in the mid-2000s at Oxford University where Batniji was pursuing a doctorate in international relations and Basu had just completed a master’s in medical anthropology. After completing medical school, they crossed paths again at Stanford, where Basu was an assistant professor and Batniji was in residency. In 2013, Batniji cofounded Collective Health, which aimed to improve employer-sponsored healthcare. After serving as the director of research at the Harvard Medical School Center for Primary Care, Basu joined Collective Health in 2019. The company was valued at $1.5 billion following a $280 million funding round in May, according to Bloomberg.

After success in the employer market, Batniji and Basu, who both treat unhoused people at clinics in San Francisco, decided where they really wanted to focus their energy was on the other end of the spectrum working with more vulnerable populations on a much bigger scale. The name Waymark references a guide to someone traveling. “These objects are placed by people that have traveled that path before,” says Batniji. In the same vein, the hope is to hire community health workers who have had the same experiences as the patients the company is serving to guide them on the road to better health.

There are 83 million Americans in the Medicaid program, including around 40% of babies born in the U.S. each year. Federal and state governments spent more than $600 billion on the program in 2019. Around 70% of Medicaid is managed by private health insurers, who assume the risk of caring for a given group of patients. The idea here is that health insurers will be motivated to take care of patients’ problems before they spiral out of control and drive up costs. But the concept hasn’t matched up to reality yet – even though insurers are on the hook for managing the risk, the majority of Medicaid services are still billed in the old fee-for-service model.

“My thesis on the space, and value-based care overall, is the reason it's not working is we're not giving physicians exposure to it,” says Vineeta Agarwala a general partner at Andreessen Horowitz, who first met Batniji during her internal medicine residency at Stanford. It’s not enough to “give physicians a bunch of random carrots and say try to hit this quality metric,” yet continue to pay them in a fee-for-service model, says Agarwala. But it’s a bit of a catch-22 since neither the Medicaid managed care insurers nor the doctors have the technology or the resources to flip the switch and provide better quality care at a lower cost. “We very much view this as the right time to enter a huge market.”

“We've looked at every Medicaid opportunity over the course of the last five plus years, and this was the first time we pulled the trigger.”Mohamad Makhzoumi, NEA

Over the past few years, venture capital investors have thrown billions of dollars at Medicare Advantage startups, the private insurers that manage the government-funded health program for Americans age 65 and over, including Devoted Health, Bright Health and Clover Health. There are currently around 25 million people in Medicare Advantage plans. While the Medicaid managed care market is more than double that size, it hasn’t gotten as much play, even as Medicaid expansion under the Affordable Care Act has added millions more people to the program.

There’s two main issues holding investors back: margins and patient churn. Medicaid margins are lower and will likely be around half the average 6.4% seen in Medicare Advantage, says Batniji. Plus, with Medicare, everyone over 65 is in the program until they die, but with Medicaid, members move in and out of the program as their income or job status changes. This creates challenges for engaging patients and ensuring continued access to care. But that’s also why Batniji and Basu are adamant the solution needs to be purpose-built for this population.

“We've looked at every Medicaid opportunity over the course of the last five plus years, and this was the first time we pulled the trigger,” says Mohamad Makhzoumi, managing general partner at NEA. “Waymark is not looking to build clinics. They're not looking to displace provider relationships. They're really looking to use the infrastructure in place today to stitch together a better member experience and a better set of clinical outcomes.”

Key to this vision is training and hiring community health workers, a crucial yet largely uncompensated liaison connecting people to health services, especially in underserved neighborhoods. It’s an idea pioneered by the Black Panther Party and others in the late 1960s through free medical clinics offering vaccines, check-ups and sickle cell screenings in low-income communities that were sidelined by the traditional medical establishment. One of the major takeaways from the Covid-19 pandemic is that people are most likely to believe their friends and neighbors within their communities as trusted sources of health information. “What we want to do is take this informal and highly effective work and make it more accessible to others so that we can conduct the training and actually compensate people for their time and for the impact they're having on improving health,” says Batniji.

This means making community health workers salaried employees. When Waymark contracts with a Medicaid managed care organization, the company is betting this new workforce paired with software to better coordinate the patient’s overall journey and connect them with wraparound services will reduce costs. There are dozens of studies that have shown how certain interventions – peer support programs, texting to increase engagement, prenatal home visits, online specialty consultations, telepsychiatry visits – can help improve health outcomes among Medicaid patients, but there remains a major gap translating grant-funded research into practice due to time, money and an industry wide obsession with pilots.

But real change doesn’t come through pilots. That’s why Waymark is in the process of contracting with the hope of having tens of thousands of patients in each market to collect data and prove which interventions work and then replicate them throughout the country.

Improving the patient experience and bringing proven solutions at scale requires leadership that has worked at different levels of the healthcare system. In building out the executive team, Batniji and Basu have brought in people with high-level experience at other healthcare companies, including Michael Ceballos who previously oversaw new markets at CityBlock Health, Afia Asamoah, the former head of legal at Google Health, and Christina Fellows, a former vice president of Medicaid finance at UnitedHealthcare.

They all recognize the challenges of the road ahead but are driven to change the status quo. “I'd say that there are numerous chasms on the road from academic publication to implementing at scale, and so we have to approach this with great humility,” says Basu. “But one of the reasons that we're optimistic is because this is a really unique time when people are coming together around Medicaid, more than I've ever seen before.”

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