Call9, a startup that provides telehealth services for the nursing home industry, is shutting down operations. The company raised $34 million in venture capital but struggled to secure additional funds to scale its business and manage the high cost of running a digital healthcare firm.

The company’s co-founders — Celina Tenev, a radiology postdoctoral fellow from Stanford, and Timothy Peck, who worked previously as an emergency medicine physician and faculty at Harvard Medical School — met while working part-time for a now-defunct startup and shared a disbelief that the patient experience still typically includes spending several hours in an emergency room.The CEO Timothy Peck, M.D., an emergency room physician, lived in a nursing home for three months before creating Call9.

Call9’s technology platform aimed to increase access to care and improve patient outcomes while also helping avoid unnecessary and harmful hospitalizations and reduce healthcare costs.

CEO Timothy Peck highlighted the slow adoption of value-based care (VBC) – which ties providers’ reimbursement to patient health outcomes rather than the number of services provided – as a source of the company’s woes.

According to Techcrunch

The company, which provided medical equipment and a video platform (via iPad) that enabled doctors to talk with nursing home residents, says its struggle owed to the country’s very slow adoption of “value-based care” — in which doctors are paid based on patient outcomes — rather than the current “fee-for-service” model on which the healthcare industry still relies largely. As CNBC reported last week, Call9’s business plan involved landing deals with insurance plans to split the savings from avoiding an outcome like an unnecessary emergency room visit.