Evolent Health is capitalizing on the demand from hospitals and health systems that want to start their own insurance arms or more broadly want to move toward value-based payment designs.
The Arlington, Va.-based technology firm grew its revenue by 45% in the third quarter of this year, totaling $43.3 million after adjusting for a reorganization earlier in the quarter. However, the company lost $12 million (PDF) as it deals with the early hiccups of being a publicly traded company and tries to scale up its operations.
Evolent's technology and services, developed by the UPMC health system and consulting firm the Advisory Board Co., help hospitals and health systems take on risk-based payments and analyze the characteristics of their patient populations.
Some organizations may choose to create accountable care organizations or capitated contracts with third-payer payers, while others have built their own health insurance plans. Systems sign multiyear deals with Evolent to carry out this strategy, and most of the work is driven through Evolent's technology platform called Identifi.
Some of Evolent's biggest clients are Indiana University Health in Indianapolis and WakeMed Health and Hospitals in Raleigh, N.C. In the third quarter, Evolent landed another large health system—Legacy Health, a six-hospital system based in Portland, Ore.
Evolent expects revenue for the entire 2015 calendar year will be around $160 million. However, losses before interest, taxes, depreciation and amortization are likely to be around $35 million, the company said.
Evolent is bullish on its business model. When the company went public this year, it said it thought the value-based outsourcing market would be worth $46 billion by 2020.