After working as a doula for 10 years, Kortny Feutardo took her first Maryland Medicaid affected person in January, offering the brand new mother with care coordination and counseling.
Feutardo is one among many suppliers benefiting from rising funding within the maternal and neonatal well being sector. After not receiving well timed funds from her affected person’s managed care group, she started working with Mae, a enterprise capital-backed firm that pairs pregnant ladies with doulas by Medicaid partnerships and handles cost.
With a U.S. maternal mortality disaster underway, authorities well being plans for low-income People prior to now few years have elevated protection of companies proven to enhance the well being of moms and infants.
And now, enterprise capital corporations, together with Khosla Ventures and Rock Well being, are bolstering funding into maternal well being firms and know-how, as they anticipate sector development and wager cost charges from each Medicaid and industrial insurance coverage will speed up.
Early maternal healthcare investments in companies like Mae and others starting from clinics to specialists in fertility and diet counseling totaled $306.5 million in 2023, a 700% enhance from $38.1 million in 2018, based on information that analysis agency Pitchbook ready for Reuters.
Saving lives
Midwife and doula-led births usually present perinatal care coordination, postpartum and prenatal counseling, lactation counseling, behavioral well being screenings, and help for mothers quitting smoking. Midwives are scientific suppliers licensed to offer obstetric and gynecological care. Whereas doulas don’t present scientific companies, they help sufferers by instructional and emotional help.
Growing insurance coverage protection and integration of doulas and midwives by healthcare plans, together with promising monetary exits, are encouraging extra funding. Alice Zheng, a accomplice at VC agency RH Capital, pointed to Amazon’s latest acquisition of membership-based clinic One Medical as an indication of potential for maternal well being clinics.
“There have been some nice exits in scientific care not too long ago,” mentioned Zheng, whose agency invested in maternity-clinic Millie.
Millie Clinic, based mostly in Berkeley, California, closed its very first spherical of funding in 2022 with $4 million, led by BBG Ventures, which invests in feminine and diverse-led firms, and TMV.
At Khosla Ventures, traders goal maternal well being applied sciences, a technique they are saying has benefits over scientific care firms. The agency, with belongings of $17 billion, has invested in Mirvie, which makes use of RNA testing to foretell being pregnant issues and preterm toddler incubator Vitara.
“Saving the lives of moms and infants is in everybody’s curiosity, so for breakthrough improvements like Mirvie and Vitara, there may be a whole lot of area to acquire reimbursement,” mentioned Alex Morgan, a accomplice at Khosla Ventures.
U.S. maternal mortality charges are far worse than every other high-income nation; and for Black women, those rates are more than twice as high, based on a 2024 Commonwealth Fund report.
Midwife-led care has been proven to assist enhance well being outcomes for Black ladies and their infants. A U.S. authorities evaluation of beginning heart outcomes between 2013 to 2017 discovered that Black ladies who gave beginning in midwife-led birthing facilities had decrease charges of preterm and low-weight births.
In 2020, healthcare VC agency Rock Well being Capital invested in Oula, which operates two maternity facilities in New York that provide sufferers each midwifery-led care and obstetrics in two places. Oula closed its second spherical of funding in February with $28 million and is opening a 3rd Manhattan clinic by September.
Invoice Evans, founding father of Rock Well being Capital, mentioned he was pushed to spend money on Oula by its well being outcomes. Oula, when put next with the Nationwide Heart for Well being Statistics’ New York Metropolis natality information had a 61% decrease preterm beginning charge throughout 1,500 births since 2021, the corporate mentioned.
Millie’s cohort of 150 births skilled a 71.3% decrease preterm beginning charge than the nationwide charge calculated by the U.S. Facilities for Illness Management and Prevention (CDC). And for Black moms, who usually tend to ship their infants prematurely, the preterm beginning charge was 60.2% decrease, the corporate mentioned.
Reimbursement points
Medicaid protection for doula companies isn’t at present a federal requirement, however states can select to cowl doulas inside their Medicaid plans, mentioned Amy Chen on the Nationwide Well being Regulation Program. Medicaid plans lined 41% of U.S. births in 2022, based on the CDC.
A Facilities for Medicare and Medicaid Companies spokesperson mentioned that the company encourages states to offer protection.
Fifteen states and Washington, D.C., are reimbursing doulas, together with three that added it to Medicaid simply this yr, based on the Nationwide Well being Regulation Program.
Industrial insurance coverage mandates are additional behind with solely Rhode Island requiring it.
The three largest U.S. managed care firms Cigna, CVS’s Aetna, and UnitedHealth go away the choice to cowl doulas to well being plan sponsors like employers or Medicaid, based on their web sites. CVS and UnitedHealth confirmed their insurance policies. Cigna didn’t reply to a request for remark.
As doula and midwifery firms attempt to broaden nationally, some grapple with inadequate reimbursement.
“We’ve got to resolve for insufficient reimbursement charges, viable well being system companions, and availability of scientific expertise in these markets,” mentioned Anu Sharma, chief govt officer at Millie.
The reimbursement panorama makes enterprise funding a necessity as firms look to develop.
Enterprise funding may help maintain innovation as Medicaid-focused companies face reimbursement limitations, mentioned Maya Hardigan, founder and CEO of Mae.
Even in New York, which pays midwives the very best charge of reimbursement within the nation—95% of an obstetrician’s payment—and as much as $1,440, cost isn’t sufficient, firms mentioned.
Doula Feutardo has been glad to assist a extra various group in Medicaid, however mentioned that reimbursement has been a difficulty.
Feutardo who travels throughout Washington, D.C., Maryland, and Virginia for purchasers, says government-sponsored reimbursement might be raised to cowl journey, meals, and housing prices. She has now lowered non-public charges to match her Maryland Medicaid charge of $1,300 per supply.
“I give equal like to mothers,” she mentioned.
—Amina Niasse, Reuters