In the Zone | Our Investment in Bluebird Kids Health

As the late Republican senator Orrin Hatch once said as he co-sponsored the bipartisan Children’s Health Insurance Program (CHIP) legislation in 1997, “as a nation, as a society, we have a moral responsibility” to provide healthcare coverage for all children. So, while the long-running debates about who deserves access to healthcare coverage and who should pay will undoubtedly continue, we are willing to bet that the idea of cutting benefits to children will not be seriously entertained.

Despite this consensus around coverage, the reality is that low-income families in the U.S. (i.e., those covered by Medicaid and CHIP) typically face significant practical barriers to accessing timely care for their children. Since Medicaid reimbursement rates are meaningfully lower than commercial rates, most pediatricians, for economic reasons, limit Medicaid patients to 15% or less of their panels and rarely locate practices in Medicaid-dense geographies. Institutions specifically designed to serve Medicaid patients, such as Federally Qualified Health Centers and “safety net” health systems, are typically overburdened, resulting in long wait times and rationed care. This leaves a meaningful access gap for children covered by Medicaid and CHIP.  As a result, despite representing 55% of the pediatric population, Medicare/CHIP kids represent only 27% of overall pediatric panels, meaning millions of children do not have a regular pediatrician or access to routine care. Instead, these families rely on Emergency Departments (EDs), which are both exorbitantly expensive and poorly equipped to manage urgent but low-acuity health issues and uncontrolled chronic conditions prevalent in pediatric Medicaid populations, such as asthma and behavioral health concerns.  This all results in higher costs — Medicaid’s share of state spending increased from 20.5% in 2008 to 29.5% in 2023 — and worse care.

Thankfully, there is clear precedent for a solution that can benefit Medicaid families, insurers, and taxpayers alike. For the past 15 years, companies like Iora Health (our portfolio company prior to its acquisition by One Medical in 2021/Amazon in 2022), ChenMed, and Oak Street Health (now part of CVS/Aetna) have demonstrated that they can radically improve care for older Americans by partnering with Medicare insurers to align financial incentives and building purpose-built clinics with care teams steeped in the principles required to deliver better outcomes at a lower cost. We had a front-row seat to this transformation in Medicare as the first institutional investor in Iora Health, and we believe that now is the time to pioneer a similar model for pediatric care.

Enter Bluebird Kids Health

Bluebird Kids Health is now doing for Medicaid kids what Iora did for Medicare beneficiaries. Bluebird will launch clinics in locations with a high density of Medicaid families to provide families access to high-quality care in their neighborhoods. Bluebird’s clinics are designed from the ground up to address the challenges that low-income families face: they offer convenient locations, extended hours for appointment scheduling, 24/7 access to an on-call care team, integrated behavioral health care, and comprehensive respiratory care, among other specific programs. As an NCQA-recognized patient-centered medical home, Bluebird delivers exceptional outcomes and an outstanding patient experience. They make the economics work by partnering with Medicaid managed care organizations (MCOs) through risk-based contracts, which allow Bluebird to share in the savings they create for payers by reducing unnecessary ED visits and other costs.

.406 and Bluebird

We first met Chris Johnson, Bluebird’s Founder and CEO, in early 2024 through an introduction from Trip Hofer, Venture Partner at .406. Trip and Chris worked together after Optum acquired their respective organizations (Landmark Health for Chris, .406 portfolio company AbleTo for Trip). As we got to know Chris, it became clear to us that he is the right leader to execute Bluebird’s vision. As former CEO of Landmark, which provides in-home care for Medicare Advantage members, he understands that building a transformative healthcare services business requires both a clear, principled vision and a commitment to operational excellence. We were also struck by Chris’s unique combination of thoughtfulness, decisiveness, and humility – traits that came up time and again in our conversations with his former Landmark colleagues, who spoke glowingly about Chris’s leadership style.  At Bluebird, Chris has already built a world-class team of operators and clinical leaders with prior experience leading innovative healthcare organizations. We were very excited to make our investment alongside F-Prime, with whom we’ve invested in several value-based care models, including Iora Health, WelbeHealth, Better Life Partners and Equip.

Looking Forward

Bluebird launched with the acquisition of Palm Beach Pediatrics (PBP), a three-clinic practice in Florida that has a 40-year history of clinical excellence, a commitment to value-based care, and payer contracts and other infrastructure to serve as a foundation for Bluebird’s broader vision. Going forward, Bluebird will primarily grow through de novo clinic launches, because delivering on the promise of world-class, value-based pediatric care for kids on Medicaid requires a fundamentally different approach — one that very few pediatric practices have had the capacity to build.

In the few short months since our Series A investment, the team has made meaningful progress infusing the best innovative care delivery practices at PBP and laying the groundwork for several new clinic launches in 2025. We are thrilled to partner with Chris and the broader Bluebird team as they provide life-changing healthcare for low-income families.out more here.

In the Founder’s Words from Chris Johnson, Founder and CEO: