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“Equal means everybody gets the same. Equity means everybody gets what they need…These are issues of the 21st century that are now on our collective watch. And the question is, what are we going to do about it?”

– Bernard Tyson, former CEO and Chairman of Kaiser Permanente

Bernard Tyson was a close friend of our firm, in particular of my partner Ben Horowitz, and the ideals that he brought to his leadership role in healthcare continue to pulse through the fabric of the a16z bio/healthcare team. He fiercely valued community, a concept he called “total health”, and health equity: the idea that each patient deserves both the medical and non-medical resources that they need to achieve their own personal health*.* We believe Bernard would be proud of the community-based care platform that the team at Waymark is now building to serve Medicaid patients, and we are honored to be co-leading Waymark’s inaugural financing.

Medicaid provides coverage for >80M lives in the U.S. (that’s nearly 1 in 4 Americans), and drives over $650B in total healthcare spend (that’s 1 in 6 dollars spent in the healthcare system, and more than half of total spending on long-term support services). Due to COVID, as well as state-level Medicaid expansion under the Affordable Care Act, the number of Medicaid enrollees is expected to continue to grow further in 2022. By contrast, Medicare Advantage (where there has been the greatest proliferation of value-based digital health entrants) and traditional Medicare currently provide coverage for 26M and 46M lives, respectively.

While Medicaid is administered by individual states, over two-thirds of Medicaid lives (and spend) are managed by Medicaid Managed Care Organizations (MCOs): private companies that administer and take on full-risk for Medicaid members. This is analogous in some ways to Medicare Advantage plans, but with several key differences: MCOs bid for their contracts through competitive public, state-level RFPs; MCOs serve patient populations with fundamentally different demographics and clinical needs, and although MCOs themselves do receive capitated (vs fee-for-service) payments, their ability to engage individual providers and practices in alternative payment models and value-based incentives has historically lagged behind the penetration of such models in Medicare Advantage (see Table 2 in this whitepaper).

Thus, we see a confluence of market themes: a growing Medicaid population (and rising expenditure), an urgent need to address health disparities amongst our most vulnerable patients, and eagerness on behalf of MCOs and Medicaid programs to invest in more outcomes-aligned care delivery models. Together, these create the unique opportunity for a new Medicaid-focused platform company to achieve both outsized public health impact and business scale.

• Twitter

“Equal means everybody gets the same. Equity means everybody gets what they need…These are issues of the 21st century that are now on our collective watch. And the question is, what are we going to do about it?”

– Bernard Tyson, former CEO and Chairman of Kaiser Permanente

Bernard Tyson was a close friend of our firm, in particular of my partner Ben Horowitz, and the ideals that he brought to his leadership role in healthcare continue to pulse through the fabric of the a16z bio/healthcare team. He fiercely valued community, a concept he called “total health”, and health equity: the idea that each patient deserves both the medical and non-medical resources that they need to achieve their own personal health*.* We believe Bernard would be proud of the community-based care platform that the team at Waymark is now building to serve Medicaid patients, and we are honored to be co-leading Waymark’s inaugural financing.

Medicaid provides coverage for >80M lives in the U.S. (that’s nearly 1 in 4 Americans), and drives over $650B in total healthcare spend (that’s 1 in 6 dollars spent in the healthcare system, and more than half of total spending on long-term support services). Due to COVID, as well as state-level Medicaid expansion under the Affordable Care Act, the number of Medicaid enrollees is expected to continue to grow further in 2022. By contrast, Medicare Advantage (where there has been the greatest proliferation of value-based digital health entrants) and traditional Medicare currently provide coverage for 26M and 46M lives, respectively.

While Medicaid is administered by individual states, over two-thirds of Medicaid lives (and spend) are managed by Medicaid Managed Care Organizations (MCOs): private companies that administer and take on full-risk for Medicaid members. This is analogous in some ways to Medicare Advantage plans, but with several key differences: MCOs bid for their contracts through competitive public, state-level RFPs; MCOs serve patient populations with fundamentally different demographics and clinical needs, and although MCOs themselves do receive capitated (vs fee-for-service) payments, their ability to engage individual providers and practices in alternative payment models and value-based incentives has historically lagged behind the penetration of such models in Medicare Advantage (see Table 2 in this whitepaper).

Thus, we see a confluence of market themes: a growing Medicaid population (and rising expenditure), an urgent need to address health disparities amongst our most vulnerable patients, and eagerness on behalf of MCOs and Medicaid programs to invest in more outcomes-aligned care delivery models. Together, these create the unique opportunity for a new Medicaid-focused platform company to achieve both outsized public health impact and business scale.