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Why One Startup Is Bringing Back the Doctor’s House Call

October 18, 2016, 11:00 AM UTC
Doctors Seek Higher Fees From Health Insurers
A doctor holds a stethoscope on September 5, 2012 in Berlin, Germany.
Adam Berry — Getty Images

It’s happened again: Your 5-year-old has a burning fever, a painful throat, and a stomachache. Leaving it to common cold medicine sounds like too big a risk for your precious offspring, so it’s time to call a professional. You pull out your smartphone, and within two hours, a doctor is in your home, taking stock of the situation and writing up a prescription.

This isn’t magic or even the health care of a distant future. It’s a modern-day twist on the doctor’s house call provided by Heal, a young Santa Monica, Calif.-based startup. On Tuesday, the company said it had recently raised nearly $27 million in additional funding to expand its operations, which currently cover several markets in California: San Diego, Orange County, Los Angeles, Silicon Valley, and San Francisco.

Co-founder and CEO Nick Desai and his wife, Dr. Renee Dua, a physician, decided to found Heal last year after a visit to the emergency room with their young son left them wondering why there is no easy way to get a house call from a doctor instead of spending hours in the emergency room. The two founded Heal in March 2015, and debuted the service a few months later in November.

At first glance, Heal is quite similar to the rest of the so-called “on-demand economy.” Customers simply pull out a mobile app, and with a few taps, can summon a doctor right to their doorstep. It’s almost as simple as ordering a burrito or groceries for delivery, or booking a home cleaning or some help to assemble new furniture.

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But while it could sound like yet another unnecessary luxury, Heal’s approach is actually rooted in more than one growing trend in the health care industry.

For one, it aims to reduce the number of patients a doctor sees. According to Desai, family doctors generally see about 40 patients a day, a number that causes them to spread themselves thin and see their potential quality of care go down. Instead, with Heal’s app, doctors see about a dozen patients a day. One Medical, a nine-year-old chain of small doctor’s offices now operating in six states, has a similar philosophy.

“Doctors are attracted to Heal for a very simple reason: They get to make the same money they make seeing 40 patients a day by seeing 12 patients a day,” Desai told Fortune.

Another factor is the rise of alternatives to the visit to the doctor’s office. Health care providers are increasingly using technology tools to “visit” their patients virtually, such as video chat. Bernard Tyson, CEO of Kaiser Permanente, recently said at a tech conference in San Francisco that more than half of interactions between patients and its health care professionals last year were done virtually.

Several services that let patients consult a doctor via mobile apps, including Doctor on Demand, HealthTap, and Teladoc, among others, have cropped up in the last few years. Others, like Pager, provide house calls as Heal does.

Like most other health care providers, Heal works with insurance carriers, and patients only pay the same co-pay they would at any traditional office. Currently, Heal accepts in-network health insurance plans through Blue Shield of California, Anthem Blue Cross of California, Cigna Healthcare, Aetna, and United Healthcare in California.

Without insurance, each visit costs $99, with additional fees for lab tests. An appointment for a flu shot is $30. And while Heal’s doctors can provide nearly all the same services a patient could get in a traditional office or emergency room, including blood draws, there are a few exceptions, such as MRI scans. For that, patients will still have to go to a clinic.

Unlike many on-demand services, Heal’s doctors are full-time employees, with benefits, and some flexibility in their schedules. With that said, it does employ some part-time doctors who wish to split their time between working for the service and another position. And of course, not all doctors will want to trek from patient’s house to patient’s house all day, though Desai says that his company currently has a waitlist of doctors who want to join the service—with more doctors than demand from patients.

To date, Heal has provided services to 11,500 patients, according to Desai. The company plans to expand to six to 10 additional cities next year, starting in February, he says.

Tull Investment Group led this latest round of funding in Heal, with Breyer Capital, Qualcomm executive chairman Paul Jacobs, Skydance Media CEO David Ellison, Hashtag One, and Slow Ventures also participating. Heal had previously raised about $13 million in funding.