A company that once ran health clinics for Apple is buying a virtual primary care startup in a bet that the future of healthcare is going to look a lot more digital

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A company that once ran health clinics for Apple is buying a virtual primary care startup in a bet that the future of healthcare is going to look a lot more digital

Shreeve, Scott

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  • Crossover Health, a company that runs on-site or near-site healthcare clinics for large employers, is acquiring virtual primary care company Sherpaa.
  • The merger blends Sherpaa's virtual care practice with Crossover's physical clinics, allowing Crossover to serve employees who don't sit in a particular office.
  • The terms of the deal were not disclosed, but the team pointed to the $12 million Sherpaa had previously raised as a benchmark.

Crossover Health, a company that operates on-site or near-site healthcare clinics on behalf of large employers, is growing its national footprint with the acquisition of Sherpaa, a virtual primary care company.

Founded in 2010, Southern California-based Crossover got a boost in its early days running on-site clinics for Apple. It now operates more than 25 on or near-site clinics in the San Francisco Bay Area, Boston, New York, and Texas for more than 175,000 members and has raised $113.5 million in funding. The company now works with other large companies like Facebook, Comcast-NBCUniversal, and LinkedIn. Employers pay for Crossover's services on a per-member, per month basis.

Last fall, Crossover had the opportunity to expand to employees who lived or worked outside of where Crossover's clinics are. So Crossover CEO Scott Shreeve reached out to Jay Parkinson, the founder of Sherpaa, which had built up a national, virtual primary care practice.

Unlike some telemedicine services that act almost like an urgent care visit, Sherpaa's based around building relationships between patients and particular doctors and care teams that they can turn to for care, which caught Shreeve's eye.

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Read more: A small but growing movement of doctors that don't accept insurance and charge a monthly fee could be a model for big employers like Amazon and JPMorgan

Parkinson said that he views both Crossover and Sherpaa as looking at new ways to do primary care, particularly in that both charge on a per member per month basis rather than based on the volume of visits by employees.

"The clinics are extremely important for what needs to happen in person," Parkinson said. But in before and after that in person meeting, the care can take place online with the services Sherpaa offers. "That is to me the magic of what Sherpaa and Crossover can do together."

The terms of the deal were not disclosed, but the team pointed to the $12 million Sherpaa had previously raised as a benchmark.

Parkinson will be staying on after merger, working to integrate Sherpaa into Crossover's system. That way, when members sign up to use Crossover, they'll start online, connecting with doctors via virtual visits (either through messages, video or phone), then perhaps come into a clinic as needed.

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The combination with Sherpaa, Crossover CEO Scott Shreeve said, will give Crossover an even more national presence to bring to employers who might have employees scattered around the US.

"Employers are looking for nationwide solutions," Shreeve told Business Insider.

Crossover's approach to near and on-site clinics

For many Americans, their employers are the ones picking up the tab for their healthcare. More than half of the non-elderly population is covered by an employer-sponsored healthcare plan, and almost 80% of large companies are self-insured. As healthcare costs go up, employers are the ones feeling the pressure. Some are starting to get fed up and have started looking for new ideas. That's where Crossover comes in.

Here's how it works: Employers opt into the program and pay on a per-member-per-month basis. Those who opt in still use their insurance, with co-pays set by the employer. The employer and Crossover work to recruit employees to join. From there, the members have access to primary care appointments, as well as physical therapy, behavioral health visits, eye doctors, and health coaching sessions. Employers have the choice to charge a co-pay for visits, both virtual and in-person following the merger, Shreeve said.

By paying on a per-member basis, Crossover doesn't have as much of a motivation to pack in as many visits as possible. Instead of interacting with patients only when they're sick the hope is to reach members in other ways.

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Because they're all part of the same clinic, the primary care doctors are able to chat about their patients with the on-staff therapists and other physicians who might work with that same patient.

The hope with on-site or near-site clinics is to make healthcare more convenient for employees, and along the way ideally make it cheaper too by cutting down on visits. Adding in Sherpaa could help that along as well by turning many of the visits into virtual visits rather than seeing a doctor in-person.

Crossover said it can save as much as $970 per member compared to what employers would be paying if that employee went through the traditional healthcare system. That savings can add up for a company with thousands of employees.


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