Morgan Health outlines strategy for disrupting the employer-sponsored market


Two months after its launch, Morgan Health has made its first investment, dropping $50 million in Vera Whole Health on Thursday.

The new venture represents the first step for JPMorgan Chase & Co.’s healthcare arm to build a coordinated care model for itself and other companies, said CEO Dan Mendelson, who was the founder and former CEO of healthcare advisory firm Avalere Health and also worked in the White House Office of Management and Budget during the Clinton administration.

Morgan Health represents JPMorgan’s second attempt at reforming the employer-sponsored coverage market—the company launched just three months after Haven, JPMorgan’s joint venture with Amazon and Berkshire Hathaway, shuttered. After three years, Haven failed to live up to its promise of disrupting the healthcare system.

The New York-based investment bank now seems determined to learn from Haven’s mistakes. Just months after its launch, Morgan Health has already found a way to spend part of its $250 million investment arm, with Mendelson saying Vera will eventually be available to JPMorgan employees in specific markets.

“There’s too many point solutions for specific clinical conditions that are addressed by specific programs, and these can really be dizzying for the employer. Like, ‘How many of these do you want to try to integrate? How do you integrate them? And are they all going to end up conflicting with one another?'” Mendelson said. “Think about it from the perspective of the employer: you want a caring clinic to be responsible for the health outcomes of your employees. You can layer other other tools and modalities on top of that.”

Founded in 2008, Seattle-based Vera offers employers integrated on-site, near-site and virtual primary care services. Its customers include the Bill and Melinda Gates Foundation, Seattle Children’s Hospital and Baylor College of Medicine. Businesses pay a flat, per-member-per-month fee to use its services, which include primary and mental healthcare, along with health coaching from dietitians and other professionals. Unlike most startups, Vera is completely at-risk for its members’ care, meaning the company has to return money to the employer if their overall care costs exceed a certain amount, but can also keep any cost savings achieved.

Private equity firm Clayton Dubilier & Rice paid an undisclosed sum to acquire a majority stake in Vera at the end of June, then valuing the startup at $400 million. With Morgan Health’s investment, the company has now raised nearly $100 million in venture funding. By promising primary care that is more accessible, technologically-enabled and patient-friendly than traditional health systems’ care, Vera joins a cohort of other startups competing for a slice of the $260 billion U.S. primary care market.

“Employers are waking up to the fact that primary care is critically important to the employee base, drives a whole range of other costs and also is a major way to address social and emotional health,” Mendelson said.

By 2023, 72% of large companies are expected to offer general medical worksite clinics, up from about 60% today, according to the Business Group on Health. Employers are also increasingly leaning on digitally-enabled primary care, and other health tools, to retain staff in a competitive labor market, with 68% of U.S. companies saying they plan to increase investment in digital health over the next five years, according to Mercer. Growing demand has prompted venture capitalists to open their wallets. During the first quarter of 2021, tech startups offering primary care brought in the second-most funding, according to digital health consultancy Rock Health.

In addition to primary care services, Vera will also help employers identify the health equity needs of their workers, which represents another growing area of demand among companies. UnitedHealthcare recently unveiled a predictive analytics tool to screen workers for social determinants of health needs, and Humana and Anthem are investing in this area too. Mendelson said he expects Vera to help Morgan Health bridge racial disparities in diabetes management, cardiovascular health and cancer screenings. And, for its next investment, Mendelson said Morgan Health is interested in care navigation.

“When you look at the employer space, there are a whole range of things that employers are doing to try to improve care, and a lot of them are very granular, focused on a specific illness or, or a specific condition,” he said. “Instead of trying to address some of the issues of the healthcare system on a disease-specific basis, we decided very specifically to focus on more holistic ways of improving care for our populations.”



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Marie Maynes
Marie Maynes is a Sports enthusiast and writes for the Sports section of ANH.