Investors flocked to Privia Health during its initial public offering, with the Arlington, Va.-based physician enablement platform's stock price soaring to nearly $35 per share, far above its initial expectation of $23.
The company had aimed to raise approximately $516 million through the sale of 22.4 million shares. But its strong performance in the public markets means it generated $778.4 million through the sale. The company could be valued at up to $1.97 billion, according to MarketWatch. The startup trades on the Nasdaq under the symbol "PRVA."
Its entrance into the public market follows a string of health tech startups like Agilon Health and VillageMD seeking IPOs. The 14-year-old startup said it does not focus on serving just one patient population, like Medicare Advantage enrollees, which makes it different than some competitors.
Structurally, Privia organizes physicians and health systems into medical groups it owns outright, where allowed under state law, and operates as a management services organization in other locations. It collects administrative fees from managing the groups and serves as an accountable care organization in which its affiliated groups participate. The startup also charges a fee to use its technology platform. It generally aims to transition from fee-for-service operators into value-based relationships.
The company counts more than 2,770 providers as partners—and boasts a 95% provider retention rate—who touched more than 3 million patients in 2020. It operates 650 care center locations across six states and the District of Columbia and said it passes on $430 million in shared annual savings.
The startup estimates the market for physician enablement tools at $1.9 trillion.
Here are five things to know about Privia Health's plans, according to its S-1 filed with the U.S. Securities and Exchange Commission:
1. The company generated $817 million in revenue in 2020, up 3.9% from $786.3 million in 2019. About 90% of its revenue came from fee-for-service contracts, with $93 million from recurring per member per month cash and shared savings with providers. Its net income more than doubled to $31.2 million in 2020, up from $8.2 million in 2019.
2. Privia agreed to sell $92 million of its shares to Anthem, with the Indianapolis-based insurer paying the same price as the public in this offering. At the close of its IPO, Anthem, which operates Blue Cross and Blue Shield plans in 14 states, was expected to hold about 5% of the company's common stock. Additionally, Privia said it will enter into a commercial collaboration agreement with Anthem, which will allow it to grow in new and existing markets, particularly when it comes to Medicare Advantage. The startup said the agreement will not limit its ability to work with other payers in a given market.
3. The number of patients who rely on Privia-owned medical groups as their primary care provider dipped 3.1% year-over-year to 682,000 in 2020, from 704,000 in 2019. The company credited the drop to a 13.7% year-over-year decline in commercially insured patients in value-based care. Meanwhile, the number of individuals it covered in government value-based programs increased about 20% year-over-year. Privia said it has 410,000 commercial patients, 83,000 Medicare Advantage enrollees, 150,000 Medicare individuals and 30,000 members.
4. The company has received $13.3 million in CARES Act funds since the COVID-19 pandemic began. Before the coronavirus, the startup said about 0.3% of visits were conducted virtually. In April 2020, the portion of virtual visits jumped to 45% and, by the end of the year, fell to about 20% of all visits, where the company expects it to stay going forward.
5. Outside of its S-1, Privia was one of several startups that wrote a letter in mid-April to the Centers for Medicare and Medicaid Innovation asking it to reconsider the decision to no longer allow new applicants to its Direct Contracting program. The company named direct contracting as a potential growth area in its S-1.
