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Inside a Vera Whole Health clinic. The company runs eleven client-sponsored clinics on employer campuses. (Vera Whole Health Photo)

Vera Whole Health is not your average healthcare company. Not by a long shot.

“The vision is to create a health revolution,” Vera CEO and Co-founder Ryan Schmid told GeekWire.

To do that, the Seattle-based company operates employer-sponsored primary care clinics inside corporate headquarters. It has 11 clinics to date in five states, with clients including the Bill and Melinda Gates Foundation, Virginia Mason and Seattle Children’s.

The company also employs a radically different — and increasingly popular — revenue model: A per-month, per-person membership fee that takes the complex billing and backward incentives out of a doctor’s visit.

Those elements are all in the name of radically changing healthcare in the U.S., and the company is picking up steam on that goal. Vera just raised $5 million to add six more clinics to its network by the end of the year, and if Schmid can make good on his vision, that will just be the beginning.

Schmid started Vera when he was an MBA student at Seattle University, but the guiding principles behind the company have much deeper roots. Before going back to school, Schmid worked at two community organizations in South Seattle, leading affordable housing development at nonprofit Urban Impact and co-founding community health center Ranier Health and Fitness.

Schmid said that experience left him with two core principles when it comes to making a change and having a positive impact on people’s lives.

“If you really want to help people change, you have to address a felt need and then develop a trusting relationship,” Schmid said.

“The other thing is, if you really want to create change, you can’t just change one person at a time,” he said. “Unless you fundamentally shape the environment that person lives or operates in, then those environmental forces are always going to be stronger than a collective group of individuals trying to change one at a time.”

Schmid wanted to apply those principles of change to primary care, one of the pressure points in the U.S.’s increasingly embattled healthcare system. He co-founded Vera in 2008 along with Patricia Diaz-Kismarton, Joel de Jong and Tom Norwood, who no longer have day-to-day roles at the company.

Ryan Schmid. (Vera Whole Health Photo)

“The vision is to create a health revolution, and part of that is both helping those individuals but then fundamentally transforming the way that healthcare is paid for and delivered, so folks’ outcomes improve and they save more money,” Schmid said.

Today, he said, primary care is losing money for the healthcare industry and isn’t set up to help patients treat the root problems of their health concerns.

“It really is a loss-leader the same way that a grocery store sells milk in the back,” Schmid said. “You go in, you get your milk. Maybe they break even on it, maybe they lose a little bit of money, but they know that on your way out you’re going to buy a bunch of high-markup stuff that’s probably going to kill you,” Schmid joked. “It’s exactly the way a hospital works.”

Part of the problem is healthcare’s traditional revenue model, known as fee-for-service. It’s the concept that hospitals and doctors make money on every action they take, like seeing a patient or running a blood test.

“All stakeholders want something different, financially, which naturally creates a total mess,” Schmid said. To combat that problem, Vera and other newcomers to the health space are employing a fee-for-value model where caregivers are rewarded for actually improving health.

“What that means is that we’re only incentivized to drive the same outcomes that you want, which is improved health for less money. And if we can’t do that, we’ll back it up by refunding the money,” Schmid said. He said Vera clinics can meet 90 percent of a patient’s needs and have low outside referral rates compared to other primary care clinics.

Vera isn’t the first company to try primary care clinics that charge membership fees. Seattle startup Qliance, which was backed by the likes of Amazon CEO Jeff Bezos, operated six membership clinics in the Seattle area before suddenly shutting its doors last year.

One Medical, a San Francisco based company, is also pursuing that model. It recently opened a new clinic in Seattle. But importantly, those companies do not run client-sponsored clinics: Instead they offer individual plans.

The nuts and bolts of Vera’s system are fairly straightforward. Like having a gym membership, patients whose employers contract with Vera can use the on-site clinic at their workplace as much or as little as they want for the same price. The fee is often covered or subsidized by the employer.

As a result, Schmid said, doctors and health coaches spend less time running between appointments and filling out paperwork and more time with patients, giving them the opportunity to have more in-depth care that gets at the root problem of health concerns.

“The gift we can provide one another by pausing and hearing one another, empathetically, truly — it’s soul-piercing. It’s a tremendous gift,” he said. “You’re able to do so much more with that patient because you’re not so worried about the billing code for that patient.”

While Vera’s goal and mission may seem ambitious, Schmid said the hard numbers on care outcomes and billing back up its approach. He also said primary care will be a key element of bringing much-needed change to the healthcare system.

If companies like Amazon, JPMorgan Chase and Berkshire Hathaway want to change the healthcare model, “the foundation that you have to build off of is rock-solid primary care,” Schmid said.

Vera currently employs 170, with 70 employees based out of its corporate headquarters in downtown Seattle. Its most recent funding round includes existing investors Leerink Transformation Partners and Archimedes Health Investors and it has raised $39 million total since it was founded in 2008.

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