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Venture fund buys DaVita's primary care business for $100M

Venture firm New Enterprise Associates has acquired DaVita's Paladina Health — the company's primary care business that operates 53 clinics across 10 states — for about $100 million, according to CNBC.

Paladina deploys a direct primary care model, meaning it does not accept insurance. Instead, it contracts directly with employers who pay a monthly fee that gives their workers access to its network. This physician-access model better addresses the transformation away from fee-for-service to value-based care.

"We've closely followed the ongoing shift to value-based care in the U.S., and believe that Paladina Health is a pioneer in the space," Mohamad Makhzoumi, general partner and head of healthcare services and healthcare IT investing at NEA said in a press release. "Driven by a stellar management team, the company's adaptive [direct primary care] model has proven to meet the growing needs of patients by delivering excellent care that not only results in high patient and provider satisfaction, but also drives down cost."

DaVita, which has supported Paladina for the last six years, sold its physician group of 30,000 to UnitedHealth Group in late 2017 for nearly $5 billion.

More articles on transactions and valuations:
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Tenet's Detroit Medical Center to sell outpatient pharmacy business to Walgreens
St. Joseph Health agrees to continue operating 80-bed California hospital until 2020

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