Digital health startup K Health, in collaboration with and with backing from Blackstone Growth and Anthem, is launching a new joint venture aimed at increasing access to healthcare while making it more affordable.
Called Hydrogen Health, the new company will use K Health’s artificial intelligence technology to create digital healthcare solutions to the employer and consumer markets. It hopes to deliver a suite of digital, virtual and in-person care options targeting the direct-to-consumer, direct-to-employer and direct-to-insurer markets, according to the announcement.
The financial terms of the deal were not disclosed, but the deal includes a put-and-call agreement between Anthem and Blackstone.
Allon Bloch, the CEO of K Health, will also lead Hydrogen Health.
«K Health has proven that we can give people access to really high-quality medicine remotely,» Bloch said in a statement. «This partnership with Anthem and Blackstone will help get K Health’s solutions into the hands of those who need them most, expanding upon our existing base of 4 million users and reducing costs in the healthcare system to make it work for all.»
WHY IT MATTERS
Accessibility to and affordability of healthcare are two problems that have long plagued the United States’ healthcare system.
A 2016 survey of patients from different countries’ experiences with healthcare services illustrates how the U.S. falls behind other countries in terms of healthcare.
«In comparison to adults in the other ten countries, adults in [the] United States are sicker and more economically disadvantaged,» the report says. «The resulting challenge to the US health system is compounded by higher health care costs, greater income disparities, and relatively low levels of spending on social services, compared to the other countries.»
Adding to the issue, the Centers for Medicare and Medicaid Services projects that national healthcare spending will increase by 5.5% each year until 2027, reaching nearly $6 trillion by then. It estimates that health spending will outpace Gross Domestic Product growth, making its share of GDP rise to 19.4% by 2027.
THE LARGER TREND
K Health and Anthem have worked together in the past on helping health consumers save money. In 2019, they teamed up to develop an app that allows Anthem members to chat with a doctor for “less than a copay.”
Additionally, as a part of the deal, Anthem members got access to K Health’s existing tool, which gives users insights into how doctors have diagnosed patients with similar symptoms.
Outside of these collaborations, K Health recently closed three funding rounds in less than a year. Last February, it raised $48 million in a Series C round to expand and refine its product. Then it closed a $42 million Series D round, which coincided with a Mayo Clinic collaboration that focused on improving its symptom-checker’s algorithms.
Earlier this year, K Health raised $132 million in its Series E round for its new K for Parents offering and to build out its app further.
ON THE RECORD
“Like our partners, we have a shared vision for how technology can fundamentally disrupt traditional care delivery models and bend the overall cost curve in healthcare,” Ram Jagannath, the global head of healthcare for Blackstone Growth and Blackstone Tactical Opportunities, said in a statement.
“We are thrilled to partner with Anthem, a leading health innovator, and K Health, a best-in-class digital health company, to help people in their healthcare journey.”