Last week, we announced that Oak is leading Oshi Health’s Series C fundraise. We are thrilled to welcome Sam and the rest of the Oshi team into the portfolio. Oshi is a value-based virtual care platform for individuals with gastrointestinal (GI) conditions, acting as an extension of brick and mortar practices and providing access to a multidisciplinary care team, including NPs, dietitians, behavioral health providers and GI doctors.
With their multidisciplinary model, Oshi is able to diagnose and provide proactive care for those suffering from a variety of GI conditions, including acid reflux, GERD, Crohn’s, ulcerative colitis, and irritable bowel syndrome, among others. Most importantly, Oshi offers a clear ROI model and track record in reducing avoidable ER utilization and GI-related testing and imaging. The company has proven an impressive +$10K savings per patient after 6 months in the program.
Oak is leading Oshi’s Series C to help the company deepen its provider partnerships, grow payer coverage, service new employer customers, and expand into Medicare populations starting in 2025.
GI is an enormous and fragmented spend category, driving an estimated $136B of annual cost in the U.S., and gaining traction as a priority for payers and employers. Today, nearly 30% of Americans live with a GI issue and two-thirds deal with GI symptoms every week. GI is a top 4 cost center for employers and payers and the #1 reason for treat-and-release ER visits. Oshi is uniquely positioned to disrupt the GI ecosystem and drive immense savings to payers, improve patient outcomes, and free up high-value capacity for physicians.
When it comes to making new investments, one of the biggest factors we evaluate is the strength of the leadership team. Sam has the unique combination of demonstrated success in startups and a continued willingness to learn that makes him stand out as a founder. He takes this high degree of self-awareness and has leveraged it to surround himself with A-players that make the executive team at Oshi unmatched. Oshi’s leadership team understands the GI space from a physician, patient, payer, and employer perspective, helping to drive their continued differentiation. The execution to date, coupled with Sam’s vision for the company, made this investment decision easy for us.
One particularly interesting value-driver that the company did early on was to build out its actuarial function and partner with payers and providers to demonstrate outcomes in clinical trials. With a demonstrated increase in patient satisfaction, improvement in outcomes, and cost-savings, the company offers a clear ROI which helped fuel traction in the early days. And, the company has been able to maintain these outcomes at-scale, available across all 50 states to more than 40 million people as a preferred in-network virtual GI clinic, including value-based care (VBC) contracts with multiple major payers across the country.
At Oak, value-based care is a core part of our healthcare investment thesis. VBC is all about creating a win-win-win paradigm for patients, providers and payers. By rewarding healthcare providers for improving healthcare outcomes and reducing volume, VBC models have the potential to lower costs and make patients healthier – while allowing providers to operate at the top of their license, when properly enabled. For Oak, companies that enable healthcare providers to implement VBC models that improve patient care outcomes and address underserved populations remain interesting. Targeted solutions to enhance care coordination, optimize resource allocation, and ensure that patient outcomes align with healthcare spending are being developed by companies in this space. And, with GenAI now permeating more and more health systems, we are particularly interested to see how it can be leveraged to enhance existing programs and solutions.
Interestingly, the lack of specialty networks with aligned VBC models has been a rate limiter for many primary care providers looking to take on more risk. Many have predicted that a deepening of VBC models into specialty care was imminent, but, before COVID, it was not clear what the winning model would be. Now, with virtual care as an acceptable option for so many, we are seeing some of the companies that took a bet in the space emerge as winners, particularly those with strong tech and actuarial acumen. Oshi’s ability to extend the reach of the brick and mortar system, while still understanding and effectively navigating the complexities of VBC coding and payer dynamics, has made them stand out among others. With their continued growth across employers and payers, and expansion into Medicare, they are poised for exciting hyper-growth and we are humbled to be along for their journey.