Farzad Mostashari Launches New Startup Company Aledade – A Physician-Led ACO in a Box

I know when I first heard that Farzad Mostashari landed at the Brookings Institution after leaving his position as National Coordinator, I couldn’t imagine it being Farzad’s long time home. However, it was a really smart short term landing spot that would give him the opportunity to prepare for his next adventure.

We just learned that Farzad is now entering the startup world with the launch of a new company called Aledade which partners with primary care doctors to form ACOs. In a blog post introducing the startup, Farzad said “The world of start-ups may not be the usual path for those leaving a senior federal post, but it’s the right decision.” I’m not sure the career path of former senior federal employees, but I think the startup world is going to fit Farzad really well. Plus, who would you rather have leading your ACO efforts than Farzad?

Maybe we should have been able to predict this move if we’d listened closely to Neil Versel’s interview with Farzad Mostashari at HIMSS. As Neil comments, “Always the champion of the little guy in healthcare, Mostashari also brought up the notion of physician-led ACOs, or, as he called it, the “Davids going up against the Goliaths.””

Aledade has received $4.5 million in investment from Venrock and the company is targeting four areas of the country: Delaware, Arkansas, Maryland and the metro New York area (not surprising considering Farzad’s past connection to NYC).

What’s also interesting is that Aledade is building their financial model on a performance model. They aren’t requiring any up-front cost to physicians and instead are opting to make money when the physicians realize savings. I’ll be really interested to see how this works out in practice. Many of the savings that ACOs have realized could be considered fuzzy math. Although, maybe Aledade will just take a percentage of the additional ACO payments the physician ACO receives.

I’ll be interested to see what technologies come out of Aledade. I can’t imagine them launching a full EHR and so they’ll have to integrate whatever they do with dozens of EHR companies. This will be a tremendous challenge. Will they build the technology in house or just partner with an outside vendor?

I’ve heard Farzad say that the move towards value based reimbursement was happening quicker than most of us realize and that the fee for service and value based reimbursement models can’t happen at the same time. The launch of Aledade is a great example that he’s not just paying lip service, but he’s fully committed to this change.

About the author

John Lynn

John Lynn

John Lynn is the Founder of the HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

3 Comments

  • Long time John. I have been reading your posts religiously though. And as always you chose the topic of the moment and this is a good one. Our welcome to Dr. Mostashari as well. I am sure he will model it in the most ideal way. ACO were supposed to be Physician led and not hospital owned. And towards that – I believe this will be a great leap forward.

    Most of the savings realized by the Physician owned ACOs, at least the ones that we work with are real. Its not an engineering of numbers at all. Some of the savings are common sense savings including avoiding the Hospital Based Outpatient Testing Procedures, seeing the patient the same day (or giving them the appointment the same day as desired which in many cases leads to reduction in ER Visits), having the Practice open to the convenience of the patient (consumer), following all the best practices related to preventive care (using of a system EHR or otherwise to alert and remind), etc. These are the low hanging fruits and they realize savings in the immediate term leading to the Physicians embracing ‘Pay for Performance’ in the subsequent years.
    I assure you that the savings are real based on what we have seen. Otherwise someone like Dr. Mostashari will not jump into this with both feet.
    As always, love reading your posts.

  • Anthony,
    Thanks for being a long time reader. I should have probably clarified that there’s room to engineer numbers as oppose to actually creating savings.

    I’d be interested to hear your thoughts on the question of how the savings will work going forward. If you get paid for the savings this year, if you do them again next year do they keep paying or do you have to find new savings in order to get paid? Could you run out of savings to find?

  • The base line is the same for the next 3 years; for instance – the 2015 ACOs will have the baseline of 2011, 2012 and 2013 spend. And that baseline is consistent for the next 3 years. This enables practices to improve their process, implement best practices and do what is required to embrace this paradigm shift. So its indeed a good opportunity to make an effective impact not only on overall savings but also a positive impact on PCPs compensation not to mention the impact on care coordination.

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