Cityblock Health and the Camden Coalition

Is one of the only health tech unicorns worth its valuation?

This is my last post of the year, so it’s longer than normal. 🎄 🕎 Thanks for joining me this year! If you’re new, hit subscribe to see more posts in 2021 on concentrated power, health tech, and the logistics of providing care.

Last week, big news broke. Cityblock Health, one of the coolest and most well-known health tech startups in New York (with other locations in MA, CT, and DC), announced they raised $160 million in a Series C round that valued the company at more than $1 billion.

This is particularly notable for three reasons. First, this valuation puts Cityblock in the pantheon of the few health tech unicorns in the U.S. (of which there are around 21, according to CB Insights).


Second, Cityblock’s funding round was one of the biggest in the health tech space in 2020—THE biggest if you discount private equity (and it’s clear that I think you should discount private equity).


Finally, the funding round is notable because Cityblock uniquely focuses on one of the most challenging and significant patient populations, people who are on Medicaid or who are dual-eligible for Medicare and Medicaid. Dual-eligibles are typically pretty complex and expensive patients, and people on Medicaid tend to be both older and sicker.

Cityblock contracts with insurers to provide primary care, social services, and behavioral health care to these members. Insurers pay Cityblock a capitated payment, meaning the company receives an annual amount for each patient. If Cityblock saves money from what that patient was expected to cost, it shares those savings with the insurer. If the patient ends up costing more money than anticipated, Cityblock is on the hook for that extra spending.

This model incentivizes preventative care and for providers to care about socioeconomic factors—housing, food, social support—in addition to the patient’s vital signs. (Interestingly, capitated payments also helped Cityblock weather the pandemic. Unlike other providers that depend on regular payments for services rendered, Cityblock maintained its constant revenue stream.)

For a startup that focuses on these complex patients to simultaneously be one of the most valuable in the health tech space is remarkable.

But is Cityblock deserving of its valuation? After all, other attempts to bring better care at lower cost to these complex patients have struggled.

The Camden Coalition and everyone else’s dreams

The Coalition

In 2011, Dr. Atul Gawande, a well-known medical doctor and writer (and, for about two years, the CEO of Amazon’s Haven venture), wrote in the New Yorker about a new health care model in New Jersey.

The subject of the piece was Dr. Jeffrey Brenner, a primary care doctor who had noticed that a small percentage of patients were responsible for a big percentage of health care costs. As the New Yorker notes, Brenner didn’t really care about costs, but he knew that extraordinary health care costs can mean that the patient isn’t being cared for appropriately; that there are bigger problems left unaddressed. So he began focusing on those patients, a model that Gawande named “hot spotting.”

Brenner’s strategy was simple. He got to know the first few outlier patients personally, and he realized that a combination of social services, coaching, housing support, and regular primary care could help a lot of them. As he said in the article, “People are people, and they get into situations they don’t necessarily plan on. My philosophy about primary care is that the only person who has changed anyone’s life is their mother. The reason is that she cares about them, and she says the same simple thing over and over and over.”

Brenner was perhaps too far ahead of his time; it’s unclear if he thought of this as a viable business model. Instead, he used grant money to form the Camden Coalition. At the time Gawande wrote the article, the Coalition didn’t have enough money for a single clinic; instead, they did home visits and made phone calls.

If Brenner could provide excellent care and socioeconomic support to the superutilizer patients, especially using tools as basic as cellphones and home visits, he could perhaps make their lives better and keep them out of the hospital. The outside medical world went crazy over this idea. I was in high school and still remember reading the article. I was so inspired that I told my mom I was moving to Camden to help. It seemed to provide a model for tackling the worst parts of American health care while still working within the existing system.

The Study

By February 2020, this cozy dream had grown complicated. A randomized, controlled study of the Camden Coalition model published by the New England Journal of Medicine showed no significant decrease in readmissions between the group that received high-touch, coordinated care and the control group.

I think it’s safe to say that almost no one expected that result. Providing specialized care and social services to individuals, trying to guide them through the system—how could that not improve outcomes?

A few potential reasons:

First, the patients maybe have been just too challenging. As the authors of the study wrote, “It is possible that approaches to care management that are designed to connect patients with existing resources are insufficient for these complex cases.”

Second, the study, which ran for 180 days, may have been too short to see outcomes. It’s also possible that a lot of the patients in the study regressed to the mean, meaning that they would’ve stabilized regardless of the intervention (which would explain why readmissions went down in both the intervention and control groups).

Finally, it’s possible that superutilizer programs have extremely positive outcomes for just a few individuals; lives changed for sure, but not necessarily money that makes major insurers change their business practices.

(Dr. Jeffrey Brenner is no longer with the Camden Coalition. He moved to UnitedHealth Group in 2017, where he worked on a project to provide housing for UHG’s most expensive Medicaid recipients. It seems to have worked on a small scale; in November 2019, UnitedHealth announced that it would house 350 homeless Medicaid patients in 2020. It’s unclear if UHG followed through, or if the pandemic interrupted the plan. Regardless, this year Brenner announced that he is returning to New Jersey to open a new primary care practice.)

Cityblock vs. the Camden Coalition

So…what does this mean for Cityblock? After the Camden Coalition NEJM study came out, two Cityblock employees, Dr. Alina Schnake-Mahl and Dr. Pooja Mehta, published a Medium article arguing that the results of the NEJM study don’t apply to Cityblock. These reasons are significant:

1.     Cityblock is its own health system of sorts. Cityblock has more physicians, providers, and health “hubs” than the Camden Coalition did; rather than referring out to a network of doctors in the community (of which there may be dearth, especially of doctors that accept Medicaid, depending on the community), Cityblock handles most of its patients’ care within a single system.

Cityblock also developed its own custom care platform, called Commons, that all of its providers can access. This is a deeper layer of integration than the Camden Coalition had access to. As Dr. Brenner told the New York Times, the Coalition initially underestimated how many resources the Coalition itself would have to provide; by relying on existing providers or housing organizations, the Coalition had the problem of “coordinating to nowhere.”


2.     Structural changes take time. The Camden Coalition study took place on a short time frame with providers who were limited in their referrals. The Cityblock team writes that they’re deeply integrated into communities and are in a better position to push for structural changes like easier access to food stamps and affordable housing. My impression is that the Camden Coalition could have done the same, but they were more narrowly focused on providing care initially.

3.     There’s more leverage available in treating a broader “rising-risk” population, rather than simply focusing on superutilizers. This is the big one. The Camden Coalition study focused on the extreme outliers, people who were already on a cycle of regular hospitalizations. The Cityblock team writes—accurately I think—that the best interventions happen before a patient enters a cycle of recurrent hospitalizations.

The Cityblock team, then, focuses on the “rising-risk” population—people who have the characteristics of future superutilizers but who can be treated more easily now, before that happens. (As I mention later in this post, Cityblock seems to be inclining towards an increasingly younger population, probably because that’s where the greatest margin in savings is—if you can talk insurers into long-term value-based bets.)

And the Camden Coalition is evolving to a model that more closely approximates Cityblock. Last year, the current leaders of the Camden Coalition published a long article about their future goals. They noted limitations in “the realities of a healthcare system that has not changed as much as we hoped and a social service system whose investments have not kept pace with the population’s needs,” limitations that need more investment and coordination from the Coalition. As such, the Coalition developed legal services, housing services, and became one of New Jersey’s four Regional Health Hubs. The Coalition is also evolving to link social services to their health information exchange.

A model of a Cityblock patient. Source

The Future of Cityblock

It looks like Cityblock is using this most recent round of funding to simultaneously try to expand into other areas of the country while continuing to deepend its presence in the lives of its current patients.

In other words, Cityblock’s plans for the Series C money don’t entirely hinge on scaling their existing model. Instead, they’re creating a platform that sounds like they’re intending to be eventual standard-of-care, maybe something that can be packaged and sold to other practices. From their Medium post last week:

We will bring our services to several new geographies, launch a maternity care program, expand our virtual care capabilities, and invest deeply in codifying the standards of care we are developing into technology and data infrastructure. In ten years’ time, we will be serving ten million members across the country.

I’m particularly interested in the maternity care program. The U.S. maternal and infant mortality rates are abysmal (particularly among Black women), a fact that has been gaining traction among policymakers and founders. This December, the Department of Health and Human Services signaled that it was in favor of states’ extending Medicaid up to a year after a woman gives birth, a policy that is hopefully pushed forward during the Biden administration.  

And if Cityblock expands into maternity care, they’re accessing a whole different segment of the market while acting as a seasoned competitor to newer brands like Oula. Once Cityblock is integrated into women’s lives, they’d be well-positioned to potentially move deeper into family medicine and pediatrics.

Pediatric care is, perhaps unsurprisingly, a critical linchpin in lifelong good health; as the Camden Coalition study noted, genuine changes in patients’ health outcomes may have to begin with intervention quite early. If Cityblock can build contracts that encompass a significant portion of a patient’s life, they may have the opportunity to really change patients’ lives and health outcomes for the better.

Will Cityblock live up to its promise?

If the disappointing results of the Camden Coalition study don’t upend Cityblock’s model, and if Cityblock is the model that the Camden Coalition is reaching towards, is Cityblock’s model the solution to complex patient care?

A few things: Cityblock has yet to actually prove its model; its valuation is not necessarily pegged to its success. And it’s unclear how scalable their model is. The four areas where Cityblock currently operates all have comparatively generous and well-managed Medicaid programs, unlike most of the country. (I was briefly on D.C.’s Medicaid program several years ago, for example, and they still send me reminders to get preventative care and flu shots.)

Value-based care, or providing care with an outcomes-focus, has been the buzzword for a lot of providers, health systems, and health tech companies. It sounds good! There’s money there if you do it right! It’s better for the patients! And maybe Cityblock has cracked this code. But value-based care also requires long-term buy-in from a variety of players (particularly insurers) which are used to patients cycling on and off their plans quickly and which have short time horizons. In other words: the unicorn valuation may give Cityblock more gravitas in its insurer negotiations, but whether they can unlock the promise of value-based care despite misaligned incentives all the way down…that remains to be seen.

There’s a world where Cityblock is unable to expand much further and just becomes a new family medicine practice, maybe slightly more innovative than the typical primary care practice and with capitated payments, but with the same frustrations and structural socioeconomic barriers that most practices struggle to overcome. There’s another world in which they limit their actual care provision and provide packaged tech solutions to existing primary care practices, which are positioned to hire health coaches and expand the Cityblock model across the country.


As co-founders Iyah Romm, Dr. Toyin Ajayi, and Bay Gross write in their most recent funding announcement, Cityblock’s ongoing goal is “to eliminate health disparities and improve outcomes for those who need it the most.”

And despite the disappointing results from the NEJM Camden Coalition study, Cityblock still has a chance. By continuing to develop its care coordination platform and the network of in-person clinics, Cityblock is supplanting the (spotty, if non-existent) system that would’ve been previously available to Medicaid patients. They’re also trying to dig in on socioeconomic factors, which are a key factor in good health. However, it remains to be seen if Cityblock can make progress on these structural factors (and make enough money while doing it), or if they’ll have to pivot to becoming a more traditional primary care clinic or health tech software company.

That being said, as someone who’s really interested in how virtual and physical medical homes can change patient care for the better—and for all of us who were inspired by the original Atul Gawande hot spotters article—I’m really rooting for Cityblock’s model to work.