Philadelphia cancer care start-up led by former Penn doc gets $11.5 million investment

A Philadelphia cancer care start-up, Daymark Health, led by former Penn Medicine oncologist Justin Bekelman has received $11.5 million in seed money from three venture capital firms, the company announced Friday.

Daymark’s business involves contracting with health insurers to provide wraparound clinical, mental health, and social services for cancer patients. Under contracts with insurers, Daymark will be responsible for the total cost of an insurer’s patients with cancer.

Typically, under such so-called value-based contracts, a company like Daymark gets to keep a portion of whatever it saves by doing a better job of managing care. That can mean fewer hospitalizations or emergency department visits.

Bekelman described Daymark as “a medical group backed by a technology backbone that integrates with health plans and with oncologists and primary care providers.” Its clinical teams provide virtual and in-home services, but do not replace the patient’s local oncologist, he said.

For Bekelman, a radiation oncologist, Daymark represents an extension of work he did as director of the Penn Center for Cancer Care Innovation. That included the development of Penn Cancer Care at Home during a time when COVID-19 made chemotherapy infusions in group settings risky.

“The pandemic was like a forcing mechanism for change,” Bekelman said in an interview Monday. Providing chemotherapy at home for hundreds of patients planted a seed for broader innovation “that took advantage of and extended all the things that the pandemic revealed was possible for patients,” he said.

In early 2023, Daymark started to take shape through Bekelman’s work during nights and weekends with a San Francisco business incubator called Healthcare Foundry. Last October, he left Penn to become Daymark’s CEO.

Daymark’s first customer is an insurance plan in the Northeastern United States. Under the contract, Daymark is providing care to 2,500 cancer patients, Daymark said. Bekelman said the contract did not allow him identify the insurer.

Daymark is part of an effort to shift the health-care business model from one that relies on discrete payments for specific services — whether or not they lead to improved health — to one that puts providers at financial risk for the clinical results of the services they provide.

The Affordable Care Act provided incentives for such efforts in primary care, but in more recent years value-based care models have expanded to areas like kidney care, Bekelman said.

Locally, Independence Blue Cross works with Strive Health, and the University of Pennsylvania Health System formed a joint venture in 2022 with Evergreen Nephrology, to provide more kidney care at home and reduce the need for emergency department visits and hospitalizations for people with chronic and end-stage kidney disease.

The $11.5 million investment in Daymark was led by two San Francisco firms. They are Maverick Ventures and Yosemite, a cancer-focused fund led by Reed Jobs, the son of Apple founder Steve Jobs. Oncology Ventures, a New York firm focused on startups in cancer care and research, also participated.

Ambar Bhattacharyya, a managing director at Maverick, said his firm has invested in value-based care companies in primary care. “Daymark represents our first partnership with a company in a specialty-focused area, where we see ample opportunities for improving patient care and outcomes,” he said.