Vytalize Health, a risk-bearing provider enablement platform, ranked No. 1 on the 2024 Inc. 5000 list of fastest-growing private companies in America. Its co-founders, Faris Ghawi, M.B.A., CEO, and Amer Alnajar, M.D., chief medical officer, recently sat down with Healthcare Innovation to discuss their business model and remarkable growth rate.
Founded in 2014, the company, which helps over 2,500 primary care physicians across 36 states, achieved the top ranking with $1.5 billion in revenue for 2023 and a three-year revenue growth of 90,778 percent. The Hoboken, N.J.-based company has raised more than $200 million from healthcare investors.
Healthcare Innovation: I understand that you two met in college and had complementary skills and interests — Faris in engineering and business and Amer in medicine. Then, in summary, you fine-tuned a care delivery model that fit right into the ACO movement when it was happening, and you were able to scale that up dramatically. Is that right?
Ghawi: Amer developed this care delivery model centered around how to bring care to patients conveniently and really be proactive and keep them at home. Then we worked together on how to build a business model around it and make it scalable.
HCI: The things you initially developed in your practice, were they workflow changes or bringing in care coordinators, or was there a technology aspect to it?
Alnajar: It’s multifaceted. It's tech and analytics, but there is also a strong people component. When we started, we built these house call practices in the New York/New Jersey area, where we were seeing seniors in their home. Before joining the ACO world, we realized a lot of it was just focusing on that proactive care and seeing patients routinely. Frankly, I know it sounds very basic, but what we found is that when the PCP-patient relationship was there, when there was trust, a lot of wonderful things happened. What we try to do at Vytalize is to improve the relationship. We try to get some of the technology pieces such as making sure they have ADT feeds. We try to take care of a lot of that stuff for our practices, with the goal being, we want you to spend more time with your patients.
HCI: Were there some initial challenges when you guys first started getting into the ACO world, either with reporting or setting up the infrastructure?
Ghawi: Tons of challenges.That is where the friendship really helped. We lived together. We would spend all day dealing with problems. And we pivoted a lot. We pivoted probably six, seven times across every vector. We pivoted the care delivery model multiple times. We pivoted the go-to market strategy multiple times. We pivoted the revenue model multiple times. We tinkered. Back in 2014, for example, Uber was the big story, and it was very attractive to be a pure-play tech company, right? A lot of companies did that, but we felt that healthcare was different. Technology alone is not enough. You’ve got to have all the pieces. You have to have the technology and the clinical piece. We wanted to be the provider, at least in the beginning, and build our own practices and learn from it. And that gave us street cred later. We knew we had the care delivery model right. We also had to have the financial model. You have to have all the components. So there were lot of temptations to take the easy route, but I don’t think it would have worked. We didn't shy away from things that were hard if we felt like they were the right thing.
HCI: Is part of your sales pitch to practices that you're taking on risk for them in these value-based care arrangements?
Alnajar: That’s right. When we initially started recruiting physicians, a lot of them would tell us their horror stories about joining value-based care programs. They were mostly health system-driven. They'd say, ‘I did all this work; they promised me all this money. I got nothing, and I ended up losing money.’ Some of our competitors charge providers a monthly fee to join them.
But we see the primary care physicians as the coaches or the quarterbacks in the whole healthcare system, but they're getting paid the least. They have the ability to create a lot of value in the system, but they need a way to do that. We help do that. We bring the ACO, we bring the capabilities, that know-how, the tech, the data, and physician partners. Physicians like to work with physician-led companies, and this is what Vytalize is. We take all the downside risk. Vytalize is really making it very easy for doctors to join value-based care and for their patients to get that level of care.
HCI: What have been some of the challenges for you guys as far as the company's rapid growth itself. You have hundreds of employees now, right?
Ghawi: You have to try to match the growth with the infrastructure, and it's impossible to get it exactly right. You're going to overspend in certain areas and not spend enough in certain areas, and play catch-up, and that hurts a lot. We've made all kinds of mistakes across everything you could possibly think of and involving things that we didn't even know were on the table.
Value-based care is a big opportunity. It’s basically combining all the complexities of insurance with all of the complexities of being a provider, with all the complexities of being a technology company, and all of the complexities of being a FinTech company, because a lot of this is finance as well. Each one of those things has its own unique set of challenges and solutions. You miss one of those and you're toast, right?
HCI: Do you feel like you have been able to maintain the same culture in the company that you had at the beginning, even though it's grown larger?
Ghawi: Absolutely, culture is a key aspect. The good news is the people make the culture. And the people that have joined Vytalize are value-based care believers — optimists who have seen how this system works at its best, and are here to make it work at its best at scale. Either they've seen it at a payer, at a technology company or another value-based care company. You can improve health outcomes and lower costs, but to really have an impact, you have to do it at scale.
HCI: Do you guys give CMS high marks for how they're running these programs such as MSSP and ACO REACH?
Alnajar: I love the direction they're going. I am happy that we're finally paying for results rather than services. My only criticism is, I'm such a fan of value-based care that I want to see it spread across as many PCP practices as possible. CMS has said that they want everyone to be in an ACO by 2030. But the way that these programs’ quality metrics work is you get hurt if you grow rapidly. If a lot of your first-year practices don't have a lot of ACO experience, you're definitely being penalized from a shared savings perspective. I would like CMS be more friendly to ACOs that are growing vs. ACOs that are stagnant, because I feel like we're having to choose between profitability and growth. Ideally, we want to have both.
HCI: Any next steps for the company you want to mention?
Ghawi: We want to continue to drive positive performance. Vytalize is beginning to expand into additional payer spaces — Medicare Advantage, commercial, and Medicaid as well. We have a very significant footprint of physicians, so we want to make sure that we're helping them across their patient panel, so that it's not just focused on Medicare. We are head-down, executing, delivering on this growth, digesting it, making sure we bring those positive results to practices and consolidating and strengthening the foundation for future growth as well.
