Health technology developer Hint Health is acquiring Denver-based startup AeroDPC as it looks to expand its reach in the direct primary care market.
Terms of the deal were not disclosed. AeroDPC was co-founded by brothers Brad and Kyle Brown in 2021, according to a press release. No financial data was available from PitchBook.
Both companies are developing software for direct primary care providers. AeroDPC will continue to operate independently for now, the companies said in the release, and Hint will integrate the company's "best features" into a new product next year. It will encompass membership management, billing, electronic medical records, business management, communication, labs and prescriptions.
Direct primary care providers typically don't accept insurance, though some may combine it with insurance for certain services. Instead of using insurance, patients pay a monthly fee that covers all of their primary care visits and needs. Patients still need health insurance, as required by law and for emergency and other acute care.
There are more than 1,800 direct primary care practices in the U.S., according to a D.C.-based industry group called the Direct Primary Care Coalition.
In the Bay Area, direct primary care providers include Forward Health in S.F., and Mountain View and Los Gatos-based South Bay Medical Associates.
“This acquisition will better enable Hint to fulfill our mission," Hint Health CEO Zak Holdsworth said in a press release. “It will also serve as a blueprint for how we can further enhance new and existing partner integrations within the Hint ecosystem, which is a strategic priority for Hint.”
Holdsworth also told Axios that the company is "on a path to profitability" and that it will make more acquisitions in the "near future" as it expands and considers adding products for specialty care.
"We’re in conversations with more entities about acquisitions" and "have M&A firepower now," Holdsworth told Axios.
This is Hint Health's second acquisition. In 2021, it also acquired Detroit-based Equal Health, a primary care and benefits provider. The company also raised $45 million in a Series B round that same year.
Hint Health charges physician practices monthly subscriptions depending on their usage starting at $50/month for small practices that have up to 100 members and three providers, according to its website.
Proponents of the direct primary care model say that it fosters better doctor-patient relationships and cuts down on costs by cutting out the middlemen.
The U.S. spends more on health care per person than almost every other nation, according to the World Bank. In 2020, health care costs reached more than $4 trillion or $12,530 per person, according to the Centers for Medicare and Medicaid Services, and made up nearly 20% of the country's annual GDP.
And yet, more than 8% of the country was still uninsured in 2021, according to the Kaiser Family Foundation.
Membership-based health care services are increasingly being used to supplement health insurance coverage.
Forward Health charges $149/month for its all-inclusive primary care services.
In July, Amazon announced its intention to buy S.F.-based One Medical for nearly $4 billion. One Medical offers its members primary care for a monthly fee, currently set at $200/year.
