The story: Seattle-based health benefits platform Accolade will offer as much as $450 million to buy PlushCare PlushCare, a Bay Area-based business that offers virtual primary health care. This is in line with the purchase of $460 million to buy another company offering telemedicine, 2nd. M.D., in March.
What’s the significance of it: The deal will add primary care to Accolade’s range of services that help its clients’ employees understand their health insurance plans and benefits. Accolade has announced it is expanding its market reach almost fivefold, to more than $200 billion.
Accolade’s chief executive Raj Singh said the company would integrate its extensive personal information about who has been to each doctor they’ve visited over the last year; any medication they’ve taken; their benefits program for the company; etc. — and offer a validated and proven primary care program.
“Primary care is the most important element of the healthcare journey,” Singh said to GeekWire. “By adding primary care to what we do, we’re going to make costs go down even further and we’re going to make clinical outcomes get better.”
This deal is a further move by Accolade to enter the market of consumers and is in addition to its 2nd. M.D. acquisition. The Accolade is expected to continue working to develop PlushCare’s direct-to-consumer business. Singh pointed out that 160 million individuals within the U.S. have healthcare not covered by their employer.
“Those people are making individual choices,” he added. “The idea of reaching them has always been a part of our strategy, and we think PlushCare only further enables that strategy.”
PlushCare’s history: Established at the end of 2015 in 2015 by Ryan McQuaid and Dr. James Wantuck, PlushCare offers instant online appointments with primary care physicians who typically have 15 years of experience. It charges a copay of $99 per appointment. The 150-strong company has helped around 400,000 clients so far, and in the last fiscal year, it earned $35 million in revenues. The company has raised more than $30 million in private investment in the form of the $23 million round that was announced in June.
The latest trends in TelemedicineInterest in virtual healthcare has been increasing with the epidemic, as people seek medical advice without going to a doctor’s office. The new regulations have also led to the use of telemedicine to an increased degree. The last period “changed the pace at which we might have been able to pursue a transaction like this,” Singh explained. Another Seattle-based company, 98point6, raised the sum of $118 million for its rapidly expanding virtual primary care services, as Amazon recently extended its own online medical program.
This deal includes 40 million dollars of cash and $340m of Accolade ordinary stock, and 70 million more in revenue milestones. It is expected that the deal will close in June.
Accolade’s business The company was listed on the stock exchange in July and disclosed revenues in the range of $38.4 million (up 30 percent) in its third quarter fiscal year and an operating loss of $16.4 million (down 9 percent). The company currently serves more than nine million members and 400 customers. The company’s staff is around 22,000.
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Accolade’s shares have risen over 50% since the company received $220 million at the price of $1.2 billion back in July. Accolade’s market cap is more than $2.5 billion.
The Accolade, located in two cities, Seattle and Philadelphia, was established around 2007 and was founded with the help of Michael Cline and Tom Spann. Accolade has been run from 2015 onwards by Singh, who had previously founded Concur, a travel expense software company. Concur later sold its business to SAP in 2014 for $8.3 billion in 2014. Concur’s Co-founder Mike Hilton is the Accolade chief product officer.