MedPilot, a Cleveland software company that uses artificial intelligence and machine learning to improve the process of patient billing, moved here from New York in 2018 and kicked off a significant growth period.
The company’s now looking for its next growth stage, with a new owner.
MedPilot announced Wednesday morning, Feb. 17, that it has been acquired by Vytalize Health, which is based in New Jersey and describes itself as “a new kind of Medicare ACO,” or accountable care organization. The company combines a Medicare ACO, virtual doctors’ office and a digital health platform to serve its network of physicians.
Financial terms of the deal were not disclosed.
MedPilot’s more than 35 employees will join Vytalize Health as part of the acquisition. The three founders of MedPilot will join the Vytalize senior executive leadership team. MedPilot CEO Jacob Myers will be chief innovation officer at Vytalize, while chief operating officer Nathan Spoden, who grew up in Mentor, will become Vytalize’s chief product officer and Shaker Heights native Matt Buder Shapiro, MedPilot’s chief marketing officer, will retain that title with Vytalize.
Buder Shapiro said in an interview that Vytalize plans to continue MedPilot growth trajectory in Cleveland, which has a tech and health care infrastructure that’s conducive to the types of employees MedPilot seeks. When the company arrived here three years ago, it had five employees, and it has grown to more than seven times that size.
Vytalize is slightly larger, with about 40-50 employees, and it is in the midst of additional hiring, Buder Shapiro said. The combined business could have nearly 100 employees by the end of the year, he said.
“They have plans to grow our company, big time,” Buder Shapiro said.
A news release from the two companies stated that the deal enables Vytalize to “offer (its) growing Medicare population a powerful solution for last-mile patient engagement.” Vytalize has been a MidPilot customer, and beginning last summer, Buder Shapiro said, the two began exploring ways that a combination could benefit both companies.
The deal brings together two companies that have attracted significant outside investments.
MedPilot has raised about $3.5 million from investors that include Hudson River Capital, Wavemaker 360 Health, Tom Hirschfeld, Cedars-Sinai, JumpStart, Techstars and TurnCap.
Vytalize has raised more than $17 million from investors including KittyHawk Ventures and Hudson River Capital Partners to bolster the company’s network of 600 primary care providers across 14 states. The addition of MedPilot helps Vytalize better manage its 65,000 Medicare patients and $1 billion of medical spending.
“As we grew our ACO and began enhancing our infrastructure for Medicare’s Direct Contracting program, our vertically integrated care delivery system needed a solution for last-mile patient engagement,” Vytalize CEO Faris Ghawi said in a statement.
He added, “We couldn’t have asked for a better technology and team to fill this need. It’s been a pleasure to work together, and we are thrilled to deploy many more solutions through this platform to improve the patient experience and health outcomes while lowering health care costs.”
In 2020, Vytalize created what it calls Vytalize Labs to attract, as the company’s website puts it, “(a)ny company that wants to improve health outcomes, lower costs, and improve patient and/or physician experience in a value-based environment.” The companies in the release called the MedPilot acquisition “a significant success” for the Vytalize Labs initiative.