Qliance Raises $4M To Expand New Primary Care Model, Circumvent Health Insurers

Qliance Medical Management, the Seattle-based company that doesn’t accept health insurance for primary care medical services, has raised $4 million in venture capital to expand its practice in Washington and to other states around the country.

The financing was led by Seattle-based Second Avenue Partners, and also included New Atlantic Ventures and Clear Fir Partners. Qliance, founded in 2006, has now raised a total of $7.5 million since it started.

We first profiled Qliance back in December. The company is pursuing a simple and disruptive idea to the U.S. healthcare system. It runs what it calls a “direct practice” in downtown Seattle, which freezes out health insurers and deals directly with patients. The patient hands over a credit card, and agrees to pay a $39 to $79 monthly membership fee to Qliance for unrestricted use of its primary care medical services. The model allows Qliance to avoid spending excessive time haggling with insurers, and lets the doctors see fewer patients. That frees up the company’s physicians to spend 30 to 60 minutes with each patient instead of less than 15 minutes for their peers who accept insurance, CEO Norm Wu said in our original profile.

“We see the Qliance direct primary care model as an important transformational option to health care reform that is easily scalable for other communities across the U.S.,” said Nick Hanauer, managing partner of Second Avenue Partners, in a statement. “Their innovative health care model reduces costs dramatically for individuals and businesses while delivering exceptional care and access for patients.”

The Qliance model doesn’t cover all the specialized services that some patients need, but focuses on the basics, like vaccinations, checkups, routine women’s health exams, and minor fractures. It provides basic X-rays, EKGs, or stitches on-site. It’s open every day, and allows 24-hour cell phone and e-mail access to physicians. In the case of something catastrophic, like a bad car accident, patients are still encouraged to get a low-premium (“catastrophic”) health insurance plan.

Qliance is careful not to use the term “concierge” care, which is associated with medical services that cater to wealthy people, who put doctors on monthly retainers to get more convenient care. The target customers for Qliance are self-employed individuals and small businesses struggling to meet their health insurance premiums, Wu said in December. He contends that employers who switch to Qliance in addition to catastrophic health insurance plans can save 15 to 35 percent of their total health care costs, which ought to help them maintain a healthy workforce while cutting costs.

The company is planning to use the new capital to expand to a second office in Kent, WA, next month, and a third office by the end of this year that may or may not be in Washington, Wu said. It is in discussions with several large groups to extend its model to other parts of the country.

One big wildcard in the business is how it might be affected by healthcare reform. Wu has been spending a lot of time meeting with members of Congress to make sure their plans don’t get in the way of “direct practice” models like Qliance.

“We are up against a very insurance-centric world, even when insurance doesn’t make sense for 90 percent of what people need to see their doctor for,” Wu says. “By mandating all-inclusive insurance for everyone, legislators will put the kind of cost-effective, high access, high quality care that direct practices provide out of the reach of those who cannot afford to pay.”

If the legislation allows for the direct practice model to take off, Wu predicts the sky is the limit for the business. About 250 million people in the U.S. need good primary care services, and the market gets big in a hurry if a lot of them are paying $50-a-month subscription fees. “We believe the potential for this model is enormous,” Wu said in December.

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