built prior authorization modules that typically interface with software from an outside software vendor, such as Arlington, VA-based Surescripts, to tell doctors whether a patient is eligible for a certain medication. As of 2014, 70 percent of US physicians were ordering medications using an EHR on the Surescripts network, according to a report from the Office of the National Coordinator for Health Information Technology.
McSherry says Xealth is seeking to become the “Surescripts of digital services.” For example, the Seattle company’s software could alert clinicians that a patient’s insurance covers a weight loss app they’re considering prescribing to help a patient lower his blood pressure.
“We’re doing the prior authorization on digital health,” he says. “We want the ubiquity of Surescripts, whereby we’re the default platform for prescribing all things digital.”
Xealth makes money by charging the organizations that license and use its software recurring fees. McSherry declined to say what his startup’s revenues were in 2018, or share projections for the current year.
One of the investors in Xealth’s new funding round is ResMed (NASDAQ: [[ticker:RMD]]). The San Diego-based medical equipment company has in recent years been making what it calls a “connected healthcare” push. Those efforts have included ResMed’s $225 million deal to acquire Propeller Health, which develops hardware and software to help patients with respiratory disease manage their conditions. Another company working to bridge connected devices and software to help patients with chronic conditions is Livongo, which is reportedly planning to go public later this year.
“You’re seeing … connected devices playing a larger and more substantive role in patient care,” McSherry says. “We’re bridging all that into the provider environment.”
Xealth, which currently has 42 employees, plans to use some of the new money to expand its engineering, product, and sales teams, he says. Other investors that participated in the funding round included McKesson Ventures, Novartis (NYSE: [[ticker:NVS]]), Philips, Threshold Ventures, Providence Ventures, UPMC, and Froedtert & the Medical College of Wisconsin, Xealth says.
