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Children’s Health Announces Partnership With Urgent Care Startup Mend

Children’s Health has begun investing in young healthcare companies to help expand its services beyond its walls. The system unveiled the initiative alongside an announcement that it has acquired a majority interest in Mend, a Dallas-based startup that offers pediatric and adult patients on-demand healthcare through a smartphone app.

Children’s Health has begun investing in young healthcare companies to help expand its services beyond its walls. The system unveiled the initiative alongside an announcement that it has acquired a majority interest in Mend, a Dallas-based startup that offers pediatric and adult patients on-demand healthcare through a smartphone app.

“It fits very well into a larger vision that we have as an integrated system,” said Peter Roberts, executive vice president for population health at Children’s. “We’ve discovered that children’s health and the health of any individual is really dependent upon the family and embracing the entire family. We have to embrace them in the community where they live.”

Under the terms, Children’s will own a majority stake in the company, but the deal is not considered a full acquisition. The investment—the specific financial terms were not disclosed—will help Mend expand into Frisco and McKinney later this month. By January, it’ll have on-staff physicians and nurse practitioners roaming in Southlake and Flower Mound.

Mend is basically on-demand urgent care; it charges $50 for the first visit and $199 thereafter. Now, it will have access to Children’s patient network, including access to treat the parents of the children they may already be seeing. Roberts says the system is also helping Mend become in-network on insurance plans.

Its founder, Dr. Jonathan Clarke, says it’s eyeing a rollout in other Texas cities throughout 2016. It currently has 20 caregivers (both physicians and mid-levels) providing care in the central, northern, and eastern portions of Dallas and another 15 to 20 that are undergoing the credentialing process. The investment will allow Clarke to hire on about 60 more, he said.

“This is part of the original idea of casting a wide net and as supply and demand increases, we can drill down into more local areas,” Clarke said. “A Frisco provider may only see patients in that area. This adds infrastructure to move in that direction.”

That wide net wouldn’t have been so wide if it weren’t for Children’s, he adds. Under the agreement, the health system’s affiliated physicians will inform their patients about the partnership with Mend and allow Clarke’s growing staff to treat them should anything occur when the doctor is unavailable. Roberts also said that Children’s is testing a telehealth component with the app. Ideally, a patient’s physician will be able to use Mend to provide telemedicine visits—adhering with the Texas Medical Board’s rule (which is currently being challenged in court) that requires a face-to-face meeting before a physician see a patient via telehealth consult.

Physicians who are credentialed with the Children’s Health Pediatric Group will share patient data with Mend via the Epic electronic health record system (EHR) while outside practitioners will use a different service. Roberts says each patient’s primary care physician will be notified about the details of each visit.

“They are integrating all of the EHR so data can flow and they can begin really focusing on the whole family,” Clarke says. “Being able to not only treat the kids but the parents as well is something that (Children’s affiliated physicians) are trying to wrap their heads around.”

Roberts says Children’s plans to invest in startup companies throughout Texas and in other states as 2016 progresses. They’re already talking to five such potential investments, although he declined to identify them or describe them.

This approach isn’t unheard of for health systems. It allows them to invest in a product without having to sink significant amounts of time and capital into developing it themselves. There’s also potential for profit later on should the partnership be successful, and it often gives systems access to new technological tools it wouldn’t have access to otherwise.

According to a Modern Healthcare report earlier this year, at least 40 hospital systems launched venture capital funds in recent years.

“I’ve been in healthcare quite a number of years now and there was a time when a hospital would not invest in startups like this. They would insist upon making it themselves from scratch,” Roberts said. “Sometimes that can be more expensive and you have to go through all the initial bumps in the road as you pilot and test the new service. And from Jonathan’s perspective, we have a strong brand name, we have the trust of consumers, and we also have a fairly large delivery system.”