Investors led by former Healthrageous CEO buy out Healthways' MeYou Health for $11M

By Jonah Comstock

Nashville-based employee wellness company Healthways has divested itself from MeYou Health, its Boston-based innovation and digital health subsidiary. Rick Lee, a serial entrepreneur who sold early digital wellness platform Healthrageous to Humana in 2013, led a group of investors, including Ballast Point Ventures, Blue Shield of California, and several prominent individual investors, in an $11 million buyout of the company. Lee will serve as CEO of the newly independent MeYou Health.

"Healthways invested more than $30 million in this company and it was very intentional in the five years that they put each brick into the foundation," Lee told MobiHealthNews in an interview. "Every step of the way was done in a fashion you just don’t see in early-stage companies. We all are entrepreneurs at heart and we build companies by cutting corners, because you don’t have the access to the capital that allows you to be thoughtful and really reflective in developing a strategic plan and operating against that. So those features have resulted in the creation of a really strong technical team and a really strong platform that is quite ambidextrous at solving different problems but is superlative at addressing the engagement issue, which is obviously the $64,000 question for virtually everyone in healthcare."

Lee said that Healthways was ready to let MeYou Health go for a lot of reasons but he argued it had nothing to do with the quality of the company or its products, which include online and mobile interventions Walkadoo, Daily Challenge, and QuitNet

"This was the brainchild of Ben Leedle, [Healthways'] deposed executive officer," Lee explained. "He had a fabulous vision and he stuck to his vision. He didn’t want [MeYou] to be in Nashville. He didn’t want it to be tarnished by the Nashville corporate culture. So he built it in Boston so the access to programmers would be accelerated. Ultimately, he wanted to create a culture that was intoxicating and attractive to young millennial programmers in the first or second stage of their careers. ... When Ben got ousted in that shareholder revolt that occurred last spring, he was the guardian angel for [MeYou]. With his departure there was no protection for MeYou Health."

After Leedle left, while Healthways searched for buyers for the company, they also heavily reduced MeYou's workforce, laying off 40 employees out of 78. Ten more left after seeing how quickly the 40 found jobs in Boston, Lee said. He believes that a culture clash between Healthways and MeYou Health kept them from seeing the value of what he sees as the company's greatest strength: open social interventions.

"What you have in Nashville are people more like me. I’m 66 and my best days have come and gone," Lee said. "You have these old healthcare people that think that if you tell a patient to do something, they should do it. You don’t have to pay them to do it, you just give them the knowledge and the education and they’ll follow your lead. And that model has proven to fail time and time again. The digital health programmer has newer, better ideas with proven success."

Open social is the idea that employee wellness programs that rely on other employees for social support are going to be less successful than programs where employees can interact with friends and family from all walks of life, on a platform that feels more like mainstream social networks. Lee says that this framework allows companies to focus holistically on supporting a user, rather than becoming wrapped up in making sure they have comprehensive solutions for stress, sleep, and any other specific health need.

"We have kind of steered away from being a wellness solution to a digital engagement platform," he said. "A wellness solution is inevitably challenging because you never can ultimately get to the end zone. But a platform that engages and brings in open social to facilitate that engagement, that’s a far more compelling business for me to want to be associated with. It’s also much more flexible for the health plans to change the game plan and say ‘We’ve decided to go in a different direction. We think that stress is a big problem.’ So open social works there. It’s not a solution, but it’s a platform that will facilitate solutions and we can bring in open APIs to attack specific challenges like stress or sleep."