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

Posted on June 18, 2014 I Written By

John Lynn is the Founder of the blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of and John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

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.

Health IT Venture Funding For EMRs At Low Ebb

Posted on January 17, 2014 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

For several years, most health IT venture funding has focused either on EMRs or data and network infrastructure to support EMRs.  With the EMR market arguably completely saturated, it seems the money is flowing in a different direction.

According to a new report by Mercom Capital Group covered in iHealthBeat, health IT venture capital funding hit  $2.2 billion across 571 deals in 2013, nearly double the $1.2 billion and 163 deals executed in 2012.

So where did the money go? According to Mercom, consumer-centric health IT companies raised $1.1 billion, personal health companies raised $198 million and social health companies raised $166 million last year.  The mobile healthcare sector raised almost $564 million, not surprising at all given the speed at which mobile health is accelerating.

Meanwhile, roughly $1.1 billion was raised by medical practice centric companies, including $179 million by population health companies, $162 million but practice management companies and a scant $166 million by EMR companies.

According to the report the top five venture funded companies of 2013 were Evolent Health, which raised $100 million, Practice Fusion, which raised $85 million, Fitbit, which raised $73 million, MedSynergies, which raised $65 million, and Proteus Digital Health, which raised $45 million.

So, as it turns out, Practice Fusion took the lion’s share of EMR venture funding last year, leaving the rest of the industry to scavenge for what remained in terms of VC interest.

What does it say in terms of the health of the EMR business?  Well, it’s not necessarily a sign of anything terribly negative in terms of EMR vendors’ future; after all, you’re not seeing a lot of new EMR companies jumping into the business, for good reason.

On the other hand, it does suggest that the market for EMRs has solidified, and is not perceived to have dramatic growth potential by VCs.  I suppose we shouldn’t be surprised or concerned for that matter. If EMR vendors aren’t in explosive growth mode at this point, it’s just because they’re serving the customers they’ve got. It could be worse.