Dozen investors pony up private resources in pre-seed funding round
A dozen executives, most from the transport industry, have pooled their funds to form a company that will build a health care network with facilities located in or adjacent to truck stops along the Interstate Highway System.
Interstate Health Systems said in a document reviewed by FreightWaves that it plans to open 40 to 60 locations over the next two years. The company, which was launched about eight months ago, wants to build more than 300 locations over the next six years, according to the document.
Interstate Health Systems’ facilities will serve fleet and owner-operator truck drivers, motorists and underserved communities living nearby, the Nashville, Tennessee-based company said. The locations will mostly be in rural areas and in regions beyond traditional suburbs that have more population density than rural communities.
The investors in what is known as a pre-seed funding round include Rob Estes, CEO of less-than-truckload carrier Estes Express Lines; Jett McCandless, founder and CEO of freight visibility provider project44; Chad Eichelberger, president of insurance company Reliance Partners; Perry Mandera, chairman and CEO of truckload carrier Custom Companies; Bruce Campbell, former chairman and CEO of Forward Air; Brad Pinchuk, CEO of refrigerated carrier Hirschbach Truck Line; Bob Peterson, chairman and CEO of flatbed carrier Melton Truck Lines; and John G. Larkin, an operating partner at private equity firm Clarendon Capital and a longtime transport analyst.
Ron Rother, former chairman and CEO of management consultant Strive Consulting, and Fulton Wold, chair and CEO of Bold Planning Technologies, an emergency management software concern, are the two non-transport and logistics investors.
None of the investments are considered “passive” in nature, meaning that each investor is playing an active role, to some degree, in getting the business off the ground.
Interstate Health would not disclose how much each investor contributed. The company is working on capital market funding to raise between $10 million and $20 million. It hopes to bring in health care companies as investors during the round, Jeff Seraphine, Interstate Health’s CEO, told FreightWaves. Seraphine has spent 25 years as a high-level executive at various rural hospital systems.
At this point, no truck stop operators have invested, although the company said it plans to solicit their interest as well.
In a statement, Estes called the model a “major leap forward” toward resolving a “variety of healthcare challenges that our professional drivers face daily.” Seraphine told FreightWaves that the company’s objective is to “create the right type of health care that works for drivers.”
The facilities will be designed to provide primary and urgent care services, with users able to book appointments and communicate with specific facilities through an app on their phones or telematics integration in the cab. The locations will be supported by a platform that offers telemedicine services, as well as a network of pharmacies that will be built out, the company said.
Nurse practitioners, who can access the services of physicians via online capabilities, will make up the staff. In an effort to ensure continuity of care, each facility can obtain a user’s medical record. This means a driver who had services rendered in one city can have follow-up care for the same issue in another city without having to start the process over at the new location, the company said.
The locations will have more robust capabilities than traditional storefront medical clinics. They will not provide surgical services, however. Nor will they be set up to treat patients whose conditions would be more suitable for treatment at a hospital’s emergency room.
As health care staffing shortages continue, one of the biggest challenges will be adequately and consistently staffing a location that will be designed to operate 12 to 16 hours a day, seven days a week, said Seraphine, adding that for that reason, the company’s build-out needs to be measured and deliberate.
The first three locations, which will be in unidentified areas in the Southeast, are expected to open in the next six months. Two of those facilities will be located on properties operated by private franchisees.
Interstate Health plans to have in-network status with health insurance companies, making it easier for company drivers, as well as owner-operators who are covered under those plans, to use its services. The company will position itself as a low-cost provider in an effort to pull in drivers who don’t have insurance, Seraphine said.
Many owner-operators have high-deductible policies and are reluctant to tap into them unless they are facing a catastrophic medical occurrence. By making its services affordable, Interstate Health hopes to convince drivers to keep on top of their medical conditions and get early treatment if necessary. In doing so, they could avoid major health issues that would force them to go out of pocket for thousands of dollars, he said.
“We don’t want drivers to delay care,” Seraphine said.
Second time around
This is not the first time that a truck stop health care model has been launched. The most recent attempt ended badly. The company, Truckers Health Team, closed its 14 locations in June 2021 and liquidated under Chapter 7 of the federal bankruptcy code. The clinics were located at various Pilot Flying J Travel Centers across the country.
The Interstate Health team conducted a thorough review of the Truckers Health saga to determine what went wrong and how the model could be executed differently. For one, the Truckers Health network lacked sufficient scale and resources compared to what Interstate Health envisions, Seraphine said.
For another, the facilities were situated towards the backs of truck parks. Fleets and drivers had no idea they were there, and the facilities were inaccessible should other potential users such as motorists and recreational vehicle operators have wanted to use them, Seraphine said. By contrast, Interstate Health’s buildings will be in the lines of sight of drivers, he added.
Another factor was that virtually all Truckers Health investors were financiers. They had no experience or understanding of trucking and freight transportation in general, Seraphine added. By contrast, Interstate Health’s core investors are composed almost exclusively of transportation and logistics professionals.
The eventual goal is to have an optimal mix of transportation, health care and information technology involvement, Seraphine said.