Evolent Health (NYSE: EVH) has completed its $85 million acquisition of Vital Decisions from the private equity firm WindRose Health Investors. The financial terms also include an earn out of $45 million. Vital Decisions offers telehealth solutions to support advance care planning.

An “earn out” in an acquisition refers to additional funds a seller receives after the purchased company achieves certain performance targets. After the deal closes, Vital Decisions will report into Evolent’s especially management business, New Century Health, and will be consolidated into the company’s Clinical Solutions segment.

“Vital Decisions’ model has proven that through empowering individuals to take an active role in their care-plan, you can improve the quality of life for those with an advanced illness and reduce costs for the health care marketplace,” said Oliver Moses, Managing Partner of WindRose. “We are pleased to have found an excellent partner for Vital Decisions in Evolent Health.”

Evolent offers services to assist health plans and providers across the continuum to build the necessary operational scale and clinical performance to work successfully in value-based payment models. The company’s New Century Health subsidiary is focused on improving oncology and cardiology outcomes through peer-led provider collaboration.

The combining of these two company’s reflect two growing priorities in the health care sector: advance care planning and telehealth.

Advance care plans are a key tool in ensuring that patient choices are known and honored during the course of their serious or terminal illnesses. Incentivizing advance care planning discussions to place a greater emphasis has been correlated to improved outcomes. Such discussions about patient’s end-of-life goals and wishes have been associated with improved access to quality of care, increased hospice utilization and longer life expectancy.

Only 1 in 3 people in the United States have had discussions with clinicians and loved ones about their end-of-life wishes, even though about 92% had said they believe such conversations are important, according to a 2018 survey by the Conversation Project. Fewer than 40% of those who suffer from a serious illness have an advance directive, the survey found.

In recent years, a cottage industry has sprung up around advance care planning services, and a number of the emerging value-based payment models newly available to hospices have elements designed to encourage more patients to document their end-of-life wishes.

Expansion of telehealth services across the health care continuum accelerated rapidly due to efforts to stem the spread of the novel coronavirus. Telehealth visits have helped providers maintain continuity of care while limiting in-person contact. These developments will likely shape health care for years to come including for hospice and palliative care providers.

The U.S. Centers for Medicare & Medicaid Services (CMS) has indicated that it will be making permanent a number of the temporary flexibilities to expand telehealth that the agency implemented in response to the COVID-19 pandemic. However, the number of rules affecting hospices that would be extended remains to be seen.

“Vital Decisions was formed as a patient-focused platform to enhance alignment among patients, families, and providers regarding the care that is delivered during an advanced illness,” said Mitchell Daitz, Vital Decisions co-founder and executive chairman. “Through our economic studies and peer-reviewed research, we found that up to 35% of costs in the last six months of life are for services that are unwarranted or unwanted.”