Venture firms invest in prenatal health
Insurance coverage up as US aims to combat parental mortality
By: Amina Niasse
Reuters
NEW YORK - After working as a doula for 10 years, Kortny Feutardo took her first Maryland Medicaid patient in January, [2024] providing the new patients with care coordination and counseling. Feutardo is one of many providers benefiting form growing investment in the maternal and neonatal health sector. After not receiving timely payments from there patient's managed care organization, she began working with Mae, a venture capital-backed with doulas through Medicaid partnership and handles payment.
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With a U.S. mortality crisis underway, government health plans for low-income Americans in the past few years have increased coverage of services shown to improve the health of parents and babies.
..... And now, venture capital firms including Khosla Ventures and Rock Health, are bolstering investment into maternal health companies and technology, as they anticipate sector growth and bet payment rates from both Medicaid and commercial insurance will accelerate.
..... Early maternal health care investments in business like Mac and others ranging from clinics to specialists in fertility and nutrition counseling totaled $3.06.5 million in 2023, a 700% increase from $38.1 million in 2018, according to data that research firm Pitchbook prepared for Reuters.
..... Midwife and doula-led births often provide perinatal care coordination, post-partum and prenatal counseling, lactation counseling, behavioral health screening and support for moms quitting smoking. Midwives are clinical providers certified to provide obstetric and gynecological care.
..... While doulas don't provide clinical services, the assist patients through educational and emotional support. Increasing insurance coverage and integration of doulas and midwives by health care plans, along with promising financial exits are encouraging more investment. Alice Zheng, a partner at VC firm RH Capital, pointed to Amazon's recent acquisition of membership-based clinic One Medical as a sign of potential for maternal health clinics.
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"There have been some great exits in clinical care recently, said Zheng, whose firm invested in maternity-clinic Millie.
..... Millie Clinic, based in Berkley, California, closed its very first round of funding in 2022 with $4 million, led by BBG Ventures, which invests in women - and diverse-led companies and TMV. At Khosla Ventures, investors target maternal health technologies, a strategy they say has advantages over clonal care companies.
..... "Saving the lives of mothers and babies is everyone's interest, so for break-through innovations like Mirvie and Vitbursement," said Alex Morgan, a partner at Khosla Ventures.
..... U.S. maternal mortality rates are far worse than any other high-income,e nation and for Black patients, those rates are more than twice as high, according to a 2024 Commonwealth Fund report. Midwife-led care has been shown to help improve health outcomes for Black patients and their babies. A U.S. government analysts of birth center outcomes between 2013 and 2017 found that Black patients who gave birth in midwife-led birthing centers had lower rates of per-term and low-weight births.
..... In 2020, health care VC firm Rock Heath Capital invested in Oula, which operates two maternity centers in New York that offer patients both midwifery-led care and obstetrics in two locations. Oula closed its second round of funding in February [2024] with $28 million and is opening a third clinic in Manhattan, New York, by September. [2024]
..... Bill Evans, founder of Rock Health Capital, said he was driven to invest in Oula by its health outcomes, Oula, when compared with the National Center for Health Statistics' New York City natality date had a 61% lower preterm birth experienced a 71.3% lower preterm birth rate than the national rate calculated by the U.S. Centers for Disease Control. and for Black patients, who are more likely to deliver their babies prematurely, the preterm birth was 60.2% lower, the company said.
..... Medicaid coverage for doula services is not currently a federal requirement, but states can choose to cover doulas within their Medicaid plans, said Amy Chen at the National Health Law Program. Medicaid plans covered 41% of U.S. birth in 2022, according to the Centers for Disease Control and Prevention. A Centers for Medicare and Medicaid Services spokesperson said that the agency encourages states to provide coverage.