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Qliance To Expand Clinics With New Series A Funding

Primary care clinic operator Qliance Medical Management Inc. has added $4 million in Series A funding as it looks to build a business that will offer a new take on health care reform.

Previous investor Second Avenue Partners led the investment, which also included existing investor Clear Fir Partners, a private family partnership, and new investor New Atlantic Ventures. The new Series A funding comes after the company, previously raised $3.5 million toward the round, bringing the total raised to $7.5 million. The new $4 million was raised at an undisclosed up valuation.

Qliance’s additional Series A funding comes after the company decided not to go out for a larger Series B round to roll out its clinics, said Qliance President and Chief Executive Norm Wu. The company decided to halt its Series B plans last September, when the condition of the capital markets changed, Wu said, but it might revisit those plans at a later date.

“My guess is a year from now we might start looking when the capital markets are in good shape,” Wu said. “There’s a lot of interest in [a Series B round]. I can’t tell you how many venture capital funds and private equity funds are tracking us right now.”

Seattle-based Qliance operates primary care clinics that give patients access to care for a monthly fee, without insurance and co-pays. The monthly fees start from $39 to $79 per individual depending on age for base line service, and cost more if a patient wants them extended for their doctor to make hospital visits.

Through the clinics, patients have access to routine care including check-ups, routine exams for women and vaccinations. The patients can also receive care for illnesses or injuries such as pneumonia or fractures, as well as for chronic conditions including diabetes, hypertension and obesity. The company’s goal is to provide care for 90% of the reasons a patient would see a doctor. Qliance currently has 2,500 patients.

Through its clinics, Qliance plans to limit the cost of primary care. In addition to Qliance, patients can supplement their care with a low-premium insurance plan for serious and catastrophic illnesses. The estimated savings of the clinic and low-premium insurance plan over standard health insurance for patients is 40% to 50%, according to Qliance, and between 20% and 35% for employers.

Qliance currently has one clinic in downtown Seattle, with plans to add a second clinic in Kent., Wash., in August. The company also plans to add a third clinic in the Washington area at the end of this year. In addition to that expansion, the company also plans to use the Series A funds to develop a customized information technology system for their business, Wu said. Other systems on the market, including electronic medical records, mostly focus on insurance, Wu said, making them a poor fit for Qliance’s business.

Second Avenue Partners came in as an investor in the company after Partner Nick Hanauer began using Qliance’s services when he needed a new doctor. Through this experience, Hanauer said he saw positive outcomes including more time with doctors, more accessibility to doctors including their cellphone numbers, and less cost.

“Once you’re a patient of a direct practice, what you instantly understand is how it’s a superior solution from the doctor and patients’ point of view from insurance-mediated medicine,” Hanauer said. “I’ve become convinced that direct practices represent the most significant opportunity for health care reform the country has.”

For Second Avenue Partners, the investment in Qliance represents the firm’s first investment in health care services. Because the firm invests through the personal capital of its team, the firm is open to investments in all areas, while it has concentrated most on technology, Hanauer said.

With the new Series A funding, New Atlantic Ventures Managing Partner John Backus has been added to the board. Second Avenue’s Hanauer already holds a board spot, while Clear Fir will serve as a board adviser.