This Startup Raised $25 Million To Liberate Your Healthcare Data In The Cloud

Ricky Sahu is on a mission to free patients from the tyranny of paper medical records. More than a decade after the federal government pushed health systems to digitize records, some patient files are still shared by mail or even fax machines. Sahu’s startup, 1upHealth, aims to end these practices by building the infrastructure for healthcare data to flow in the cloud. With $25 million in Series B funding announced Wednesday, the Boston-based startup is expanding its foothold among insurance companies. This means it can provide more patients with a combination of both clinical data and insurance claims records, which is what’s needed to move the needle to improve care, says founder and CEO Sahu: “You can marry the two together and truly drive better quality and costs.”

The benefit for health insurers, Sahu says, is this can better enable what’s called value-based care—arrangements where insurers pay for the outcomes of healthcare services, rather than paying for the individual services provided. As it currently stands, many of these contracts are a shot in the dark for healthcare providers, since doctors don’t really know how much they’re getting paid until the claims are processed months after the fact. That’s because the data is isolated across multiple, different systems. Federal rule changes going into effect this year require both health systems and insurers to make healthcare data available to patients electronically through standardized APIs, which will allow different software systems to communicate with each other and transfer packets of data. 

Here’s what that means in practice for patients. Each time a person changes jobs, it can often be a Sisyphean task to move to a new health insurance plan: filling out paper forms, regurgitating medical history, and re-establishing relationships with doctors—all because there is no data transfer between rival health insurers. With 1upHealth, a patient’s healthcare data “is liberated and you can go wherever your care journey needs you to go,” says Carl Byers, a partner at F-Prime, which led the Series B. Returning investors Jackson Square Ventures, Eniac Ventures, and Social Leverage also participated in the round. These investors are hoping that 1upHealth, which has raised $35.4 million to date, will disrupt the healthcare industry much like the data warehousing company Snowflake did. That company had software’s largest-ever IPO by raising $3.4 billion, and its current market cap is around $68 billion. 

The company’s name is a nod to the Nintendo video game Super Mario, where magic mushrooms give the player a new life, or 1UP.

Getting to that disruption point, however, won’t be easy. Building out 1upHealth’s infrastructure can be likened to building out electrical service into a new neighborhood. First, the wires must be strung from house-to-house. These are connections between health systems, insurers and app developers. For the electrical current to flow in a neighborhood, there is a transformer from each house to the street. This is similar to the way 1upHealth goes inside each health system or insurer, takes huge troves of data sitting around in multiple forms, converts it all into a standard format known as FHIR (pronounced fire) and stores it in the cloud. 1upHealth’s software then allows other organizations to interact with the patient data in a secure way.

“It's not that people will say, ‘I want to be able to download a file and have it on my laptop.’ That doesn't do anyone any good,” says Byers. “It's that people want the constellation of care providers who are keeping them healthy to know what's going on and to work together, so people can actually have a better life and live longer.”

Sahu founded 1upHealth in 2017 with this vision of getting healthcare systems to talk to each other. The company’s name is a nod to the Nintendo video game Super Mario, where magic mushrooms give the player a new life, or 1UP. By giving patients access to their own aggregated data, they have more control and knowledge of their own body, which Sahu likens to controlling an avatar in a video game. “The best way to get there in the real world is to help customers and patients unlock and take control of their health data.”

The company  started out with connections to 12 health systems, which has since grown to thousands. It now has  35 enterprise contracts totaling more than 11 million patients. It gains revenue both by offering fixed-fee access to its platform, as well as collecting fractions of a cent each time an organization accesses its software. Those charges add up to around a couple dollars per patient per year. 

“We're not selling the data, but we are helping our customers operate on their own data,” says Sahu. With the latest funding round, 1upHealth will be able to expand its services to help customers handle new regulations around issues like price transparency and prior authorization. The company will also push out other features using machine learning and analytics. “If you look at the most valuable companies in the U.S.—Google has the most data about online web traffic. Facebook has the most data about social. Amazon has the most data about e-commerce,” says Sahu. “At this time next year, we will have the most data about healthcare.”

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