How Xealth amassed 14 hospital backers for its digital health platform

By September 23, 2021 December 10th, 2021 News

Xealth, which was spun out of Providence, recently raised $24 million in a series B round. Advocate Aurora Enterprises led the round, bringing its health system backers to 14.

Xealth, a startup looking to make it easier to integrate digital tools into providers’ workflows, has amassed 14 health systems as backers. The Seattle-based startup recently closed a $24 million series B round led by Advocate Aurora Enterprises, bringing on seven additional health systems as investors.

Spun out of Providence in 2017, Xealth already had a provider perspective when it sought to make it easier to pull information from connected devices into health record systems, or to “prescribe” digital therapeutics to patients.

But it was through a meeting with The Health Management Academy, an organization that brings together leaders from several large health systems, that CEO Mike McSherry saw a broader demand for the platform Xealth was building.

Health Management Academy had been surveying providers on what they needed, and one of those things was a standardized aggregation platform around digital health and remote patient monitoring.

“It’s hard to imagine a world where every single one of these solutions is going to plug in one by one, system by system, so they thought some sort of standardized platform would be beneficial for the ecosystem,” McSherry said in an interview with MedCity News.

And instead of having hospitals build such a solution from scratch, why not use the one that Xealth had already built?

The startup will be getting more than funding with its recent raise. Xealth is currently used by six health systems (including Providence), but many of its recent investors weren’t yet customers.  The company plans to use a portion of the funds to staff up to support them, and to help match patients to specific solutions that might work best for them.

Xealth is poised to solve a big challenge faced by digital health companies: getting providers and patients to use their services. It currently has 60 different vendors that it can integrate.

For example, during the pandemic Xealth worked with Kroger to have groceries delivered to patients who had tested positive for Covid-19, and also worked with Babyscripts and Banner Health to help monitor people who were going pregnancies at home, including sending them blood pressure cuffs and scales for checkups.

Through another partnership with Twistle and Providence, they helped monitor patients who had Covid-19 symptoms at home by having them share their temperature and oxygen saturation levels, alleviating some pressure from emergency rooms early in the pandemic.

Xealth does the work on the back end, communicating information to and from patients. For example, it might push instructions to a patient from their healthcare provider to download an app, watch a video, or confirm their address to get a remote monitoring kit sent to their home.

The startup is also drumming up backers at a time when the dynamics around digital health are changing. When it was incubating at Providence, doctors were the gatekeepers around medications, labs and imaging. But as the market has evolved, insurers, self-funded employers and consumers who find these solutions directly have adopted digital solutions much faster than health systems.

Now, McSherry expects to see more of a push from providers.

“There’s no denying that digital health is a core part of care delivery,” he said. “I think this funding round is a bit of a recognition that hospital systems know they need to accelerate digital health and they see us as an accelerant toward that digital transformation.”

There’s also a significant difference in patient uptake, he said, depending on who recommends it. Adherence is higher when a doctor refers a patient to an app or remote monitoring program, than when their insurer or employer recommends it.

In the longer term, McSherry hopes to see this reflected in reimbursement for health systems using digital tools to provide care.