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Scouting Report-Wheel: Moving Virtual Primary Care Forward

The Driver:

Recently Wheel hired its first Chief Commercial Officer just three months after raising $50M in a series B fundraising bringing the total amount the company has raised to date to $66M. In late August Wheel announced that it had hired Tim Kollas who previously worked in Business Development for Amazon Care and as Chief Partnership Officer at 98point6, Inc. according to his LinkedIn profile. Wheel’s fundraising round was led by Lightspeed Ventures with participation from CRV, Silverton Partners, Tusk Venture Partners, J.P. Morgan, and a new investor in Future Shape. According to the company they will use the funds to grow headcount and to expand offerings into specialty care including behavioral health.

Key Takeaways:

  • According to Wheel internal data standing up and scaling a virtual care service on your own costs an average of $15MM and takes approximately 15 months.

  • The McKinsey 2020 Virtual Care Study claims that approximately $250B or ~20% of all outpatient, office, and home health spend, could potentially be virtualized.

  • According to the Austin Business Journal, Wheel delivered as many paid consultations in Q2 2021 as in all of 2020.

  • A study by Nuance and HIMSS found that 97% of doctors and 99% of nurses surveyed had experienced burnout at some point in their working life.

The Story:

According to Forbes, the genesis for Wheel goes back to when CEO and co-founder Michelle Davey was a child and had to undergo over a decade of being “ferried between doctors for her to be diagnosed with an autoimmune condition.” After several stints working in healthcare and recruiting, Davey return to healthcare to work at a telehealth startup to do recruiting. Thinking her previous recruiting experience would give her a leg up in her new role, she was quickly surprised to learn that it had not. In 2018 this lead Davey and her co-founder Griffin Mulcahey to found a matching market for virtual healthcare providers called Enzyme which later became Wheel. According to the firm’s website, Davey and Mulcahey felt that “no one was looking out for those at the center of the healthcare engine: the clinicians on the front lines” and decided found Wheel as “the industry’s first model for delivering high-quality virtual care at scale by empowering clinicians and providing new efficiencies for healthcare companies.”

The Differentiators:

Unlike some of its competitors which offer branded virtual care services Wheel is one offers a private or “white-label platform that empowers companies to quickly and easily launch virtual care services on its own by providing them with the appropriate back-end infrastructure and software. In addition, while Wheel is helping traditional healthcare providers like hospitals and physician practices offer virtual primary care services, it is also helping non-traditional players like retailers, pharmacies, and employee benefit programs create their own virtual care programs under their own brand. Wheel claims that using their platform is much more efficient than standing up and scaling a virtual care service on your own, which their internal data shows costs an average of $15MM and takes 15 months. Moreover, as noted above, Wheel is looking to expand the breadth of its services beyond just virtual primary care, currently looking to move into behavioral health, labs, and diagnostic care. Interestingly given Wheel’s roots in physician recruitment and staffing, Wheels has a strong background in some of the technical issues involved in scaling a virtual care business. As Davey noted to Forbes about founding the business, one of “the biggest sticking point[s] to scaling digital health startups was understanding the regulations across all 50 states and recruiting licensed clinicians.” It appears that this expertise has aided its growth, as “80% of its growth has been organic, and the company has a 90% retention rate.” Wheel currently has approximately 120 employees and expects to increase that to 200 by year-end. Wheel charges its customers a base fee for its software and then an additional fee per consultation.

The Big Picture:

As Michelle Davey noted to the Austin Business Journal following Wheel’s series B, “I think we’re at least 10 years ahead of where we would have been” due to the pandemic. Given that both providers and patients were essentially forced to accept and use telehealth overnight both resistance and inertia were pushed to the side out of necessity and a transformative opening has been created for digital health. Wheel and other virtual primary care providers like it (please see our Scouting Report Oxygen: AI-Based, End-to-End, Virtual-First Primary Care) can fundamentally change the delivery of care. For example, according to the McKinsey 2020 Virtual Care Study approximately $250B or ~20% of all Medicare, Medicaid, and Commercial outpatient, office, and home health spend, could potentially be virtualized.” In addition, while there will always be some portion of the patient care that will have to be delivered in person, virtual first primary care allows providers, of all shapes and sizes, to broaden the delivery of care to more patients, and independent of their geographic location. This opens up tremendous opportunities to expand care to the underserved and to broaden care in rural areas where providing access is lacking. In addition, virtual first brings healthcare much closer to other industries by bringing patient care to the patient at the time and place they desire as opposed to the other way around. Virtual primary care also provides a mechanism to address the issue of physician burnout, where over 90% of doctors report experiencing at least one symptom of burnout in their lives. By giving them the ability to create their own virtual practice with a much lower infrastructure incidence of burnout can be reduced. While there are important issues like broadband access that still need to be addressed, technology and demand are clearly changing the nature of healthcare delivery.


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