Valera Health, a Brooklyn, New York-based company, recently made a significant move in the digital psychiatry space by acquiring the digital suicide prevention startup Vita Health. This acquisition marks a strategic expansion for Valera Health, enhancing its clinical capacity and enabling the company to provide care for even the most acute patients on an outpatient basis.
The primary goal of this acquisition is to strengthen Valera Health’s position in the market, allowing the company to pursue value-based care contracting and other payment models that prioritize clinical quality over volume of care. According to Craig Albright, CEO of Valera Health, this move aligns with the evolving landscape of healthcare reimbursement, particularly for challenging patient populations.
The acquisition was finalized on May 21, with specific terms of the deal remaining undisclosed. Albright clarified that the transaction involved a merger of equity between the two companies, rather than a liquidity event for either party. Investment firms previously involved with Vita Health will engage with the combined company’s board, with LFE Capital joining as a member organization and Flare Capital Partners and CVS Health Ventures participating as board observers.
Valera Health, established in 2015, has distinguished itself by focusing on patients with acute psychiatric needs. The company offers psychiatry and therapy services for adults, adolescents, and children aged 6 and older, operating as a specialty medical group that collaborates with healthcare organizations. Unlike many digital health companies, Valera Health employs clinicians as staff members and emphasizes in-network services, catering to a diverse range of health plans, including commercial, Medicaid, and Medicare.
With a total funding of approximately $79.5 million since its inception, Valera Health has secured significant investments to support its growth. In comparison, Vita Health, based in New Haven, Connecticut, has raised around $31 million across two funding rounds, focusing on telehealth psychiatric services for teens and young adults. Following the acquisition, Valera Health will continue to serve adolescents and adults, employing a total of about 250 clinicians.
As Valera Health integrates Vita Health into its operations, the management teams of both companies will merge over the next few months. Albright, who assumed the CEO role in May 2023, highlighted the shared commitment to addressing mental health challenges, particularly suicide and self-harm, which rank among the leading causes of death in the United States.
Experts have emphasized the potential impact of value-based care contracting in addressing serious mental illness (SMI) and reducing healthcare disparities. Individuals with SMI often face shortened lifespans and lower earnings, underscoring the need for comprehensive care models that prioritize both mental and physical health. By combining their expertise and resources, Valera Health and Vita Health aim to advance innovative solutions in digital psychiatry and improve outcomes for vulnerable patient populations.
