This Company Just Raised $140 Million To Accelerate Patient-Oriented, Value-Based Primary Care

UpStream integrates teams of pharmacists and other experts into primary care systems to better manage care for Medicare patients.

Imagine going into your doctor’s office and facing not a staff of overworked doctors and nurses, but an inviting conversation. A talk with a healthcare professional who has plenty of time, isn’t in a hurry and is ready to listen to a recital of the different aches and pains of your life. Someone with expertise in medications dedicated to making your life easier and healthier. A professional who makes and then hands you a cup of coffee before you even start talking.

With that conversation–easy, low stress–you can begin a level of trust with your doctor’s office that you might not have had before. And the person listening may, in conjunction with the doctors and nurses, find some better paths to helping you get healthier, even if you suffer from a chronic disease.

That’s the vision that Fergus Hoban has for the American healthcare system. His company, UpStream, provides integrated services for primary care physicians, both independently and as part of networks or bigger healthcare systems. Centered around a prescribing pharmacist, a team of nurses and other professionals work with doctors to provide better care for Medicare patients while at the same time lowering costs.

That initial conversation, Hoban says, helps build more trust with patients, helping them feel heard in a healthcare system that can often feel “patriarchal”—ignoring patients’ own desires. “We use that conversation to build the initial trust,” he says. Then nurses handle nondrug interventions while the prescribing pharmacist works with the doctor to determine ideal courses of therapeutics.

“As we introduce this model into the American environment, and we speak with patients who really feel the healthcare system has been acting on them, as opposed to reacting for them,” Hoban, 52, says. “You get that profound connection with the patient that makes all the difference.”

UpStream’s take on healthcare has believers. On Thursday, the company announced that it has raised a $140 million Series B round, bringing the company’s total funding to about $185 million. The round was co-led by Dragoneer and Coatue, with participation from Mubadala, Avidity Capital and Define Ventures.

“UpStream is really that end-to-end platform where we can integrate all this care together in a differentiated clinical model,” says Lynne Chou O’Keefe, founder and managing partner of Define Ventures. “In this era of digital health we’re ready for these platform solutions.”

The key to the company’s success, and what differentiates UpStream from other value-based care companies, according to CEO Sanjay Doddamani, 49, is that it puts pharmacists at the center of caring for patients. The current American system, he says, is “underutilizing the expertise of a pharmacist who’s spent four years in pharmacy school and two years in fellowship. They have tremendous expertise, they know disease states, yet we have not used them.”

The “guy down the road at Walgreens,” he says, doesn’t know what your medical history looks like, or why your doctor prescribed a particular medicine. “Unfortunately, that really doesn’t lend well to a more integrated care model,” he adds.

That underutilization of pharmacists’ expertise is at the center of why Hoban founded UpStream in the first place. Born in Ireland, Hoban is a pharmacist by training, but he was frustrated by the fact that pharmacists weren’t more directly involved in care for patients. That led him to found Unicare, a company that helped embed pharmacists in physicians’ offices. He sold that chain to McKesson in 2002 for $129 million.

As he worked with that first company, he became fascinated by the workings of the healthcare system itself. So in the late 1990s, he got his M.B.A. at Trinity College Dublin, where his studies focused on the American healthcare system. What attracted him to learning more about how things got done in America, he says, was his “fascination with the last country in the world that believes that the competitive economic framework can solve this greatest of human problems.”

“The U.S. had this great belief,” he continues, “that competition has solved every other problem, so it could solve this one, too.” But the outcomes of the U.S. healthcare system, he says, belied that belief. One key reason for this, he says, is that the American model has become focused on “downstream care”—taking care of people when they’re at their sickest. America has “the best hospitals in the world,” he says, “but much less interest in upstream care.”

That all changed, he says, with the passage of the Affordable Care Act (a.k.a. Obamacare), which included legislation that enabled the creation of Accountable Care Organizations. These healthcare entities are incentivized by the Centers for Medicare and Medicaid Services (CMS) to provide coordinated care to Medicare patients, and they receive compensation for delivering better healthcare outcomes at lower costs.

That, he says, laid a framework for where entrepreneurship could make a difference in healthcare, and it inspired him to leave Ireland and head for the United States, where he founded Think Whole Person Healthcare in Omaha (where he still resides). That company, in partnership with Blue Cross Blue Shield of Nebraska, served as a prototype for what UpStream Care would become, he says. “It was enormously effective.”

In 2017, Hoban founded UpStream in Greensboro, North Carolina, with a hope of scaling up the model that had worked so well in Omaha. He started seeing success with the physicians he was working with, but growth was slow. That is, until he met Doddamani, who suggested to Hoban that UpStream would be more effective if it used an alternative payment system, like competitor Agilon Health. Under that model, he suggested, UpStream would bear the risk of saving enough in costs that its reimbursements from CMS would be profitable. The physicians the company works with would then be paid in a regular fashion without having to worry for the months it can sometimes take to be reimbursed by the Medicare system.

A few conversations later, Doddamani, 49, a veteran of Geisinger, Northwell, CMS and other healthcare institutions, ended up taking the reins as UpStream’s CEO in the summer of 2021. Since settling into the role, the company has seen tremendous growth. It’s expanded its operations so that its current roster of nearly 300 employees work with nearly 3,000 physicians who provide care to over 175,000 patients. In the past few weeks, the company has signed deals with Tidewater Physicians in Virginia and the Medical University of South Carolina to provide care for Medicare patients. The company expects to end the year with about $950 million, says Doddamani, and to about double that in 2023 to over $1.75 billion.

With the new infusion of capital, Doddamani says the company will have enough to maintain the capital reserves that CMS requires value-based providers to keep on hand for the revenue growth it’s expecting, plus enough to keep hiring more people so UpStream can continue to expand into more areas. And for Hoban, that means expanding a healthcare model where he sees incentives and outcomes going hand in hand.

“In every other industry, as quality goes up, so does the cost,” Hoban says. “But in the healthcare industry, as quality goes up, cost goes down. The best form of healthcare is none at all, because you don’t need it.”


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