50. Cityblock

Founders: Toyin Ajayi (CEO), Bay Gross, Iyah Romm
Launched: 2017
Headquarters: Brooklyn
Funding: $886 million
Valuation: $6.3 billion
Key technologies: 5G
Industry: Health care
Previous appearances on Disruptor 50 List: 3 (No. 36 in 2023)

When it come to annual federal government outlays, not much comes close to the Centers for Medicare & Medicaid Services: nearly $1.5 trillion in its 2023 fiscal year, representing 14% of federal dollars. That's more than Social Security, the U.S. Treasury, or the Department of Defense. And the scope of Americans covered by government health insurance has ballooned, with 66 million Medicare beneficiaries and another 90 million enrolled in Medicaid as of 2023. 

According to CMS projections, Medicare and Medicaid represent 40 cents of every dollar spent on health care in the U.S. Cityblock Health was launched in 2017 to make sure those dollars are better spent on delivering better patient outcomes, in particular, to marginalized patient populations. The need for better care is obvious from the data: 83% of Cityblock members have more than two chronic conditions, over half need mental health support, and 45% face acute social need, according to its annual equity report.

It operates a community-based model of integrated primary care, behavioral health, and social services, and also partners with insurers, to address the unmet health and social needs of Medicaid and Medicare populations. Spun out of Google's urban innovation group Sidewalk Labs, it's also aiming to do this all on a profitable basis and reach 10 million members by 2030. The company says its revenue surpassed $1 billion in 2023.

That's easier said than done in a health-care market known for its bloat and incumbents' desire to keep it that way. Last year, Cityblock faced a situation that's been common for heavily funded startups: the need to cut its own costs in the effort to become profitable. In June, it laid off 12% of its workforce, which CEO and co-founder Toyin Ajayi said in a blog post was a step that could not be avoided if it was going to prove it is "both possible and necessary to create a sustainable, successful value-based care model serving Medicaid and dually eligible populations." 

Cityblock continues to add partnerships and members, teaming with a subsidiary of government health plan specialist Centene for the Ohio market, adding 10,000 participants in January. In February, Cityblock partnered with another Centene affiliate, Fidelis, for the New York City and Long Island market. And just last month, it partnered with another large corporate player with a focus on government plans, Molina Healthcare, to serve the senior care market in Massachusetts. The deals allow health insurance companies to work with CityBlock on some of the most challenging patient populations when it comes to the economics of health care, and for CityBlock to prove it can grow margins with its unique approach.

In a recent appearance on the Vital Signs podcast, Ajayi – who came out of a community health nonprofit organization background in Massachusetts – made the stakes for the company's success clear. Speaking about the great ideas that often occur inside nonprofits, she said there is a lack of incentive to scale and less imperative to grow, and also a lack of skills at all levels, from governance to talent recruitment and retention, to further innovate and scale.

"What happens more often than not is you see these great ideas receive grant funding, perhaps it's academic or NIH or philanthropic dollars, and they serve a very narrow sliver of the population and do so very well. But they are unable to touch folks that go beyond that, and unable to sustain that work beyond the lifecycle of the grant, because there hasn't been the focus spent on the internal unit economics: how do we make this thing self-sustaining over time? And that becomes a real sinkhole in some ways, where innovative ideas flare up and then they die, flare up and then they die, and we reinvent the wheel over and over and over again."