Heal’s VC round proves house calls are making a comeback in cities. Can they expand into a cohesive nationwide network?
California-based medical care startup Heal announced today the close of their Series A round, prescribing $26.9 million in new funding.
Leading the round was seed investor Tull Investment Group. New comers included Breyer Capital, Qualcomm Incorporated’s Executive Chairman Paul Jacobs, and Skydance Media CEO David Ellison. Previous investors HashtagOne and Slow Ventures also took part in the round.
The on-demand house call app previously raised $5 million in 2015 through angel investors and several other VC entities.
With their main area of operations is on the West Coast, the company hopes to expand further nationally, and has now raised a total of $40 million. Speaking on the growth potential for this industry and their ability to raise significant levels of funds early on, Heal’s CEO, Nick Desai, emphasized in a statement, “the enormous need for a convenient and personalized healthcare solution.”
Heal was founded by Desai and Dr. Renee Dua in 2014. The company’s app promises a 1-hour service ceiling guarantee, any day of the week, between 8AM and 8PM. This is broadly similar to the on-call after-hours services some practices provide, or urgent care centers, but the obvious difference is that it is available year-round and does not require leaving the house.
The 1-hour guarantee and in-home convenience is meant to balance out the fact that the $99 fixed fee costs about as much as the co-payment for an emergency room visit in the US. The figure drops significantly if patients have health instance. Heal has relationships with Blue Shield of California, Anthem Blue Cross of California, Cigna Healthcare, Aetna, and United Healthcare, which constitute some of the biggest insurance networks in the US. (For this reason, 80% of Heal’s patients pay through insurance.)
Savings through convenience
I pay for my medical insurance out of pocket right now, coming out to about $300 per month. My co-payments for visiting generalists, specialists, and emergency rooms under this plan are $30, $50, and $100 – respectively. And my in-patient hospital co-pay is $500.
My insurance provider is already working with Heal in California, so in the future I could reasonably except them to cover the $99 fee for doctor visits in my own state, so the house call would only cost me $30 to start. After that, where the savings would really kick in are on emergency visits, and to a lesser extent, specialists.
In the US, many medical offices close their doors between 3PM and 6PM on weekdays. And though there are 24-hour care clinics, many “weekend medicine” and urgent care options do not also have extended hours. So, your only recourse may be to go to a hospital or tough it out.
Obviously, in a real emergency such as a broken leg, appendicitis or food poisoning, I would be going to a hospital anyway. And I would be going to one if there was a problem outside of Heal’s 12-hour shifts, or in the rare event they could find anyone to come over in enough time. But, if I think I am getting bronchitis after two days of coughing and it is now 4PM on a Sunday, I would either need to wait until Monday to see anyone or go to the hospital, where I would likely have to wait for several hours before getting treated.
For specialists, the benefit is the trip it could save to a hospital over a recurring problem that strikes on a weekend, like an ulcer or slipped disc. Specialists are also notoriously often difficult to get appointments with on the same day. One hurdle for specialists making house calls, though, is that they might not be able to carry all the necessary equipment with them.
For generalists, the main perks are less waiting time for an appointment and – this is especially true with children – not having to share a waiting room air with other sick people. With busy parents, one less car ride might well be worth $99, especially if they have other, healthy children who they would need to bring along to the doctor’s office. Note, though, that multiple sick children (or adults) means multiple appointments and fees per person so take that into account.
Resurgence of house calls
House calls became rare in the US following WWII, and by 2000 the number of doctors who made them was negligible. Growing up in the 1980s and 1990s, I only ever received a single house call from a practitioner, and pharmacies that delivered prescriptions to your door were the exception. In 2013, only about 13% of family care physicians made house calls according to the American Academy of Family Physicians (AAFP), though with the costs of elder care rising these visits – and visits to retirement homes and hospices – may help reduce healthcare expenses. According to Heal, 60% of Americans would want a house call option again. (Not unlike the option their Baby Boomer parents and grandparents often had.)
Heal and other services like it provide both urgent care and general care options like drawing blood, prescription writing, and basic physical exams. For $19, Heal will also go and pick up medicines for patients, and the rates are flat for these services: no extra “holiday charges” apply on such days.
Those living in remote areas also benefit from having at-home visiting options. Most of these services, though, are run by a combination of state agencies and NGOs. The Royal Flying Doctor Service of Australia is one, an “air ambulance” serving remote communities in the Outback, alongside hospital trains in several countries, including India, South Africa, Russia, and China. Heal and its competitor services, like Pager, Maven, and Doctor on Demand, fill a gap between these efforts and an accommodating neighborhood practitioner.
These services can be life-savers for the elderly and handicapped, who may rely on in-home care via a visiting nursing service, but nonetheless have to trek to their doctors’ offices for checkups and other care. They can also be crucial for lower-income patients whose transportation and insurance options are more limited.
And house calls can, as one commenter noted under the AAFP report, help with, “Evaluating [the patient’s] environment for hazards” such as unsanitary living conditions, confronting “a family member in denial about a serious condition,” or signs of abuse. These stressors and risks may not be readily apparent outside of the home, after all.
And as a US News & World Report story on house calls shows, they also now cater to a range of globe-trotting patients, including airline employees, hotel workers, and tourists. Yet the transient nature of these patients underscores two of the main criticisms raised about house calls’ resurgence overall. One, that they do not lend themselves to follow-up visits and two, that doctors who travel out of the office are seeing fewer patients on average.
The issue of medical history access – as important as it is – is less pronounced, though, since when visiting an emergency room, you are probably not getting someone who is familiar with your chart. And Heal estimates that with about 40% of its users being repeat patients, there can be a higher level of consistent doctor-patient interaction.