Call9, a Brooklyn, N.Y.-based startup providing medical equipment and a telehealth platform to nursing homes, is ceasing operations, co-founder and CEO Timothy Peck, MD, confirmed to CNBC this week.
Though the company had raised a total of $34 million in venture capital since its 2015 founding, it was reportedly unable to secure additional funding to stay afloat. As operations come to a close, approximately 100 employees have been laid off.
Call9 used technologies such as iPads to connect nursing home staff with its team of physicians in an effort to prevent unnecessary hospitalizations. The startup's business plan depended not only on revenues from sales to nursing homes, but also on deals with insurance plans to share the savings from avoiding costly hospitalizations.
Dr. Peck told CNBC that Call9 Medical, a part of the company that employs physicians and provides medical care, will continue operations, and that he may "pivot" Call9's remaining assets into another company that would continue Call9's focus on value-based care.
"We do still think that value-based contracting is better for the patient, for payers like Medicare and for the long-term health of start-ups," he said. "But we also know that fee for service can give you more revenue compensation in the short-term, and startups often feel that pressure to focus their efforts there."
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