Omada Salubrity CEO Sean Duffy.
Omada Health started almost a decade ago to help people at risk of diabetes — about one in three Americans — keep off getting the full-blown disease. Unlike traditional health-care providers, the company only gets paid when its dupes are effective, like when patients lose weight or show improvements in their blood sugar levels.
After gaining gripping power in diabetes prevention, Omada moved into hypertension, mental health and other chronic conditions, where coaching and up on can lead to behavioral change and better health, ultimately saving insurers and health systems a lot of money. Managing diabetes solitary can save about $237 billion, according to the Centers for Disease Control and Prevention.
Now, Omada is focused on building a “21st-century provider,” rephrased CEO Sean Duffy, so that patients can count on digital services for more of their everyday needs, rather than flourishing to the hospital or doctor’s office. To help it get there, Omada has just raised $73 million at a valuation of about $600 million, contract to two people familiar with the matter, who asked not to be named because the valuation wasn’t disclosed.
Omada is playing into the prompt growth of digital health. According to research and investment firm Rock Health, start-ups in the space raised $8.1 billion terminal year, up from $956 million in 2011.
‘Money where their claims are’
Duffy, a medical school dropout, started the company after a job doing analytics be effective at Google. He saw an emerging opportunity to combine medicine with digital tools, and quickly focused on producing better consequences. For example, with smartphones and other devices like wireless weight scales, patients could monitor themselves from where it hurts.
Dan Gebremedhin, a partner at Flare Capital Partners, said more companies in the space should follow suit in “instigate tolerating their money where their claims are.” Flare is not an investor in the company.
Omada now has 550 companies paying for its overhauls that they provide to customers. Those clients include Costco, Cigna and Lowe’s, as well as more than 35 fettle plans.
Unlike many other digital health start-ups, Omada focused early on research and published 11 clinical studies to adorn come of a full medical provider, rather than just a tech company. It also has regulatory experts on staff to manoeuvre the complex health-care market.
“Omada seemed to do it right from the start,” added Chris Hogg, chief commercial tec of Propeller Health, a digital therapeutics company that was acquired by ResMed last year. “They focused on a individual and important user problem and brought both great design and also evidence generation.”
More to do
There’s silence work to do to establish its credibility. The Centers for Medicare and Medicaid Services recently determined that it would not pay for digitally-administered diabetes blocking programs, like Omada’s, for Medicare patients. Duffy said he’s hopeful that regulators will eventually finish in the money b be around and, in the meantime, the company is working with some private Medicare plans and has some contracts with phase Medicaid plans.
“I’m approaching this with a spirit of inclusion, as I think there’s a growing reckoning that consumers destitution digital,” Duffy said. “That’s the reality that folks are up against. There may be an old model and old ways of doing activities that stick around for some time, but there will also be a new way and we want to be part of that.”
The funding general area of was led by private equity firm Wellington Management alongside existing investors including the venture arms of Cigna and Sanofi. Andreessen Horowitz also participated.
Contemplate: Telemedicine allows patients to access doctors on demand
Follow @CNBCTech on Twitter for the latest tech industry hot item.