USA – Fresenius Medical Care announced that it has formed a new independent company focused on providing “value-based kidney care” in the United States.

The new company, which will operate under the InterWell Health brand, is valued at US$2.4 billion.

According to the company, the transaction raises Fresenius Medical Care’s total addressable market in the United States from around US$50 billion to around US$170 billion.

The merger brings together Fresenius Health Partners’ expertise in value-based kidney care contracting, InterWell Health’s network of more than 1,600 nephrologists, and startup Cricket Health’s technology-enabled care model and patient engagement platform.

Fresenius Medical Care is the world’s largest dialysis center operator.

According to executives, the new InterWell Health will be distinct from Fresenius Medical Care. As part of the agreement, 1,100 InterWell Health network physicians will become equity shareholders in the new company.

The deal, subject to regulatory review, is expected to close in the second half of 2022.

InterWell Health has the financial and strategic support of leading investors including Valtruis, Oak HC/FT, Cigna Ventures and Blue Shield of California, which all backed Cricket Health.

Accelerating growth in kidney disease care

With more than US$6 billion of medical costs under management and over 100,000 covered lives, the new company will accelerate growth in the mid- and late-stage chronic kidney disease value-based care population, according to company executives.

Kidney disease is a health, disability, and workforce issue that costs taxpayers and the economy US$130 billion in annual Medicare spending, US$50 billion of which is spent solely on kidney failure and dialysis care.

More than 37 million Americans have kidney disease, which progresses to kidney failure for nearly 800,000 of them.

According to Crunchbase, Cricket Health has raised US$111 million in venture capital to date.

Fresenius has historically focused on patients suffering from chronic kidney disease and renal failure, and it offers dialysis services across the country.

Cricket Health, which was founded in 2015, focuses more “upstream” in order to intervene earlier and provide stage-specific care to kidney disease patients.

Cricket Health created a 96 percent accurate predictive analytics model to risk-stratify patients and identify those with chronic kidney disease in stage 3b and beyond.

Patients who have been identified are then assigned to a care team that consists of a nurse, a pharmacist, a social worker, a dietitian, and a trained patient peer mentor.

InterWell Health, a physician-centric joint venture formed in 2019 by 1,100 physician investors and Fresenius Medical Care North America, has 1,600 nephrologists on its network.

What each company brings to the table

Cricket Health brings machine learning and predictive analytics to the table in order to identify and risk-stratify patients prior to kidney failure, thereby slowing disease progression. In addition, the company created a web-based patient engagement platform.

The COVID-19 pandemic has boosted demand for virtual care platforms and in-home care services.

Fresenius Health Partners brings risk management experience from both government programs and private payers to the table, and the new company will be able to support providers in value-based kidney care contracting.

Cricket Health’s analytics and patient engagement technology will enhance the capabilities of the new company.

The company is one of several startups vying for a lucrative kidney care market, alongside industry heavyweights such as DaVita.

Startups focusing on modernizing chronic kidney disease and end-stage renal disease management are attracting significant funding, including Strive Health, Monogram Health, and Somatus, which recently received US$325 million in series E funding, increasing its valuation to more than US$2.5 billion.

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