South African venture capital firm Knife Capital has invested in Cape Town-based healthtech startup Alignd, betting on a healthcare financing model that has already helped medical insurers save an estimated R600 million ($36 million) by reducing unnecessary medical spending and improving patient outcomes.
The investment, made through Knife Fund III, will support Alignd’s expansion into maternity and kidney care, extending a model initially developed for palliative care into two of the most complex and costly areas of healthcare.
The companies did not disclose the size of the investment.
Founded in 2018, Alignd is seeking to change how South Africa’s private healthcare system pays for medical treatment. Rather than rewarding hospitals and healthcare professionals based on the number of procedures performed or services delivered, the company develops payment arrangements that link compensation to patient outcomes and the quality of care provided.
The approach challenges the traditional fee-for-service model, under which healthcare providers are typically reimbursed for individual consultations, treatments and procedures regardless of whether those interventions produce better long-term health outcomes.
Alignd works directly with medical schemes, designing healthcare programmes that align the financial interests of insurers, medical professionals and patients while reducing unnecessary expenditure.
Its first major test came in palliative care, where patients with life-limiting illnesses often receive expensive hospital-based treatment despite potentially benefiting more from coordinated care at…
