Harbor Health continues to expand its clinical footprint in Texas with the acquisition of 32 clinics from VillageMD.
The deal expands the company's reach into three new markets: San Antonio, El Paso and Dallas. Harbor Health also grew its established clinical footprint in its home base of Austin. Financial terms of the deal were not disclosed.
The acquisition nearly quadrupled Harbor Health's clinical presence, growing from 11 to 43 total clinics and adding more than 80 clinicians to its team of physicians and advanced practice providers. The acquisition also advances the company's philosophy that having a denser network of clinics improves quality of care through enhanced accessibility.
"We believe in being dense where we are because there are huge advantages to being dense. One is the we don't have to pay as much for marketing as people know who we are. It also gives us an opportunity to create those relationships with specialists and with hospital systems that go deeper. We can really coordinate and find the best and work closely with them, and then it just makes it easier for us to care for folks as well," Clay Johnston, M.D., Harbor Health co-founder, told Fierce Healthcare.
The Harbor Health and VillageMD teams have strong cultural alignment as well as similarities in their clinical models, Johnston noted.
With broader statewide presence, Harbor Health is now positioned to serve up to 14 million Texans with care and coverage, up from 1.6 million currently, according to Tony Miller, Harbor Health co-founder and CEO.
Johnston, the first dean of the University of Texas Dell Medical School, founded Harbor Health with two other healthcare leaders, Eric Scott from venture capital firm 8VC and Tony Miller, who co-founded Bind Benefits, which was sold to UnitedHealth Group in 2021 and is now called Surest.
The clinic expansion comes on the heels of Harbor Health's $130 million funding round two weeks ago to grow its insurance plans. Existing investors General Catalyst, 8VC and Alta Partners co-led the funding, while DFO Management (Dell Family Office) increased its support. Returning investors Health2047 Capital Partners, Lemhi Ventures, Martin Ventures, Breyer Capital and a series of individuals also backed the round.
Harbor Health banked a $95.5 million in January 2024. The company has raised $258 million to date.
The company launched in 2022 to bring a new care model to the central Texas market that integrates primary and specialty care services. Harbor Health started with three clinic locations in 2022 and the acquisition now expands that to more than 40 clinics. The company has cared for more than 50,000 people in Central Texas, and that number is growing rapidly.
Harbor Health also operates two mobile clinics and an infusion center.
From the start, Harbor Health had larger ambitions to build a vertically integrated "payvider" business. The company is focused on proactive care and leveraging technology to improve patient health.
The latest funding round will help the company build out its insurance business for large group employers, Johnston said. In November 2025, Harbor Health will be on HealthCare.gov, the Individual Insurance Marketplace, offering fully insured individual and family health plans.
"We always have intended to be an insurer plugged into a health system, the next generation 'payvider.' In order to do that, we had to start with the clinics. No one's going to buy insurance that plugs into care that doesn't exist," he said. "The insurance is hard to build just from the get-go, but also you need risk-based capital that just sits in the bank. Once you invest in the insurance, you want that spread out over as many lives as possible, otherwise you're not going to realize that large investment, so that's the purpose of the clinical growth."
The company's growth strategy is focused on expanding its insurance plans, clinical footprint and specialty care services. Harbor Health plans to add specialty services in rheumatology, dermatology, cardiology, endocrinology and mental health.
"By integrating more specialty providers into our health teams, we're surrounding each member with the expertise they need. Our insurance plans synergize with the care model so that everything is aligned to achieve the best health possible," Johnston said.
Harbor Health pairs care models with longitudinal coverage models that encourage people to do what's best for their health and choose the best providers. Each Harbor Health member is connected to a dedicated health team and customized care pathways. That health team is composed of doctors, registered nurses, mental health professionals and more, depending on the patient's health needs.
Harbor Health insurance plans are designed to offer large group employers and individual consumers more coordinated care and coverage together at a lower cost than traditional plans, according to the company. The plans built around a robust network of primary care providers and specialists, and the group also maintains strong partnerships with a wide array of external providers.
"We are committed to a new advanced clinical model and payment structure that rewards providers to reduce population health risks and lower overall costs,” Miller said in a statement. “People want personalized care and clear guidance on how to make lifestyle changes and informed decisions about treatment and costs. Employers need better options to keep rising healthcare benefit costs under control. We know we can deliver the plans at a 10% to 20% savings while making the plans richer for the members.”
Harbor Health plans to remain focused in Texas for the near future, leveraging local market density for cost-effective operations and coordinated care.