Originally published by Fierce Healthcare on March 30, 2023
There is no shortage of apps and digital tools to help patients manage chronic conditions and remind them to take their medications. But the best-designed technology only works if patients actually use it.
Los Angeles-based Wellth develops app-based digital health programs that use financial incentives and behavioral economics strategies combined with a consumer-grade smartphone experience to improve adherence to patients’ care plans.
The approach is resonating with patients. More than 90% of Wellth's members interact with its app daily, leading to significantly improved health outcomes for its members, the company claims.
Launched in 2014, the company's growth has been driven by its strong results and outcomes. Wellth’s health plan and provider clients have measured significant cost savings, and Medicare Advantage plans have achieved higher star ratings, according to CEO and co-founder Matt Loper. Wellth reports that health plan and provider clients have seen a 42% average reduction in inpatient utilization, a 29% average reduction in emergency department utilization and a 16% improvement in medication adherence
Wellth reeled in an oversubscribed series B fundraising round of $20 million led by SignalFire. The company has raised $40 million to date.
The company plans to use the fresh capital to invest in the behavioral science engine behind the app and to grow its teams. Loper and co-founder and Chief Technology Officer Alec Zopf have their sights set on propelling Wellth to become a category-leading company.
Frank Williams, co-founder and former CEO of Evolent Health, who is also joining Wellth as chairman of the board, participated in the funding round along with existing investors The Social Entrepreneurs’ Fund, CD Venture, Yabeo and Partnership Fund for NYC.
Loper says he was motivated to launch the digital health startup based on his own personal journey and family history.
"My aunt and uncle have struggled with Type 2 diabetes their whole adult life. And they've had extremely different journeys," Loper told Fierce Healthcare in an exclusive interview.
Loper's aunt was able to quickly and easily adjust her lifestyle to accommodate her diagnoses and diligently followed her care plan and took her meds as prescribed. His uncle, however, repeatedly fell off his care plan no matter how hard he tried, according to Loper. He suffered from severe complications from the disease, and ultimately it took his life.
"Personally, I saw how hard it was to manage one of these conditions and really wanted to help people like Uncle Roy who have all the right intentions and want to do the right thing, but just seemingly can't follow through," he said.
Prior to starting Wellth, Loper was an analyst at UBS Investment Bank, Goldman Sachs and then OrbiMed Advisors, a healthcare-dedicated investment firm. About 10 years ago, he noticed the growth of digital health tools along with the increased focus on value-based care.
"It was a very simple lightbulb moment where I thought, 'OK, the shift of incentives from payers to providers is a necessary first step. But we have to also create this incentive for the patient to follow through and do the behaviors that they need to so that we can receive better outcomes.' I saw a need to create this new model of behavior change and support for the member in order to actually reach these better outcomes in healthcare," he said.
Getting patients to adhere to care plans and build lasting healthy habits is a challenge many providers and health plans are trying to tackle. Six in 10 adults in the U.S. have a chronic disease, and 4 in 10 have two or more chronic conditions, according to the Centers for Disease Control and Prevention. And this is a leading cause of death and disability and a primary driver of America’s $4.1 trillion annual health costs.
Some 50% of Americans don’t take their medications as directed by their doctor, for any of a host of reasons. This non-adherence leads to preventable hospitalizations and preventable deaths and costs 16% or $500 billion of the entire U.S. healthcare spend every year.
Current efforts to boost adherence typically use technology, reminders and coaching solutions but Loper said Wellth goes beyond that by combining its behavioral science approach with machine learning AI to customize each member's experience and motivate them to follow through on healthy behaviors.
The company works primarily with Medicaid and Medicare patients and with dual-eligible populations. Wellth's programs support 30 conditions such as diabetes, congestive heart failure, cancer, chronic kidney disease, COPD and asthma and behavioral health issues.
"We really want to lean in and help the patients and members who need the most help. We're looking at how do you find the people who are the least adherent, the least engaged, the most complex, and most of our populations have multiple chronic conditions with a history of non-adherence and disengagement. We serve everything from diabetes or cardiovascular disease to serious mental illness, substance use disorder and opioid use disorder," Loper said.
There's a growing list of companies focused on patient or member engagement. "Unfortunately, what engagement has come to mean is really just a way of bugging members with text messages or phone calls or information that they don't actually take in," Loper noted.
Wellth uses data science to first identify members who need support and target the right messages to them.
Wellth's programs were designed using core principles of behavioral economics, such as loss aversion, to tap into natural psychological drivers and motivators to incentivize users to make healthy choices. Through the app, patients are tasked to take a simple healthy step: snapping a daily photo of their medications, glucose levels or other healthy behaviors. Through this daily interaction, behaviors are trained into habits, which ultimately lead to lasting change and positive health outcomes.
When patients enroll in the Wellth app, members are eligible to receive up to $30 a month for verifying adherence but can lose a small portion of their balance for each day they miss a check-in.
Wellth's approach is based on behavioral science and behavioral economics concepts like the “endowment effect” coined by Richard Thaler and loss aversion, which is a cognitive bias where the threat of losing money is twice as motivating as gaining money.
The company just marked a milestone of 10 million behaviors through the app and currently has 32,000 members on the program, Loper said.
"We're growing about 100% every year, so that population size is doubling about every year. So we should enroll another roughly 30,000 members this year," he said.
The Wellth team is focused on building out the technology into a full solution to help health plans achieve cost savings and quality scores.