A nascent healthcare startup announced an acquisition on Thursday that it believes will advance its mission of accelerating the industry’s transformation to value-based care.

Guidehealth — a value-based care enablement startup that formally launched itself about a month ago — acquired Arcadia’s value-based care service division. The companies are not disclosing the terms of the deal.

Two healthcare veterans founded Guidehealth. One co-founder is Sanjay Doddamani, the former CEO of value-based care startup Upstream, and the other is Michael Gleeson, Arcadia’s former chief strategy and innovation officer. Doddamani serves as the Guidehealth’s CEO, while Gleeson serves as chief technology officer.

They founded the company because they saw an incredible need for technology that helps health systems succeed in value-based care arrangements while still maintaining financial stability, Gleeson said in an interview.

The startup, which has its headquarters in Dallas, is creating a solution that seeks to help health systems “improve their operating margin around value-based care, but also do so in a way that keeps them at the same volume or higher for referrals,” he explained.

The whole idea behind value-based care is to keep patients out of the hospital, but that’s a tricky thing for health systems, Gleeson pointed out. If a health system is successful on the value-based care front, they could end up losing a lot of hospital revenue that they need in order to keep their doors open, he explained.

That’s why Guidehealth’s platform is designed to not only improve providers’ financial performance in value-based risk contracts through predictive analytics, but also strengthen their relationships with affiliated networks and enable referral growth, Gleeson noted. This design could help customers differentiate Guidehealth from other value-based care enablement startups, such as Aledade and Pearl Health.

“With the [managed service organization] we are acquiring, we can focus on referral management, utilization management, prior authorization and patient access — we can take a latent capacity that exists within the network and direct high-value, appropriate volume to hospital systems. This allows us to keep the overall volume and the hospital the same or higher,” he declared.

Some key elements in Guidehealth’s newly acquired asset include tools for streamlining visit access and referrals, prior authorization management, network administration and paying claims to providers.

By acquiring a “tried and true, in-the-market solution” for referral and utilization management, Guidehealth is positioning itself well to help health systems maintain patient volume while excelling in value-based care contracts, Gleeson said.

The startup makes its money by charging fees for its technology, as well as by bearing risk in value-based care arrangements and collecting the savings that are generated from those programs, he explained.

Guidehealth’s customers include two Chicago-based providers, Endeavor Health — which was known as NorthShore – Edward-Elmhurst Health before it rebranded this month — and Amita Health Care Network

Photo: Natee Meepian, Getty Images

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