Digital chronic-disease-program company Omada Health is leaping into musculoskeletal care thanks to its acquisition of Physera, an app-based platform that includes remote consultations with physical therapists.
Although the deal was announced today, Omada said it will "immediately" begin offering the MSK program to its employer, health plan and individual customers.
“Integrating a digital physical therapy solution better equips Omada to meet the pressing needs of the current moment, and accelerates our progression towards a fully integrated care experience to address the needs of our partners and participants,” Sean Duffy, Omada CEO and cofounder, said in a statement.
Alongside the acquisition came news of new growth capital for Omada, from life sciences investment firm Perceptive Advisors. An Omada representative valued the raise at $57 million, which alongside previous rounds would put the company's fundraising total above the $250 million mark.
“Omada’s vision for, and progression towards, creating a true digital care provider is a perfect example of where healthcare is headed,” Sam Chawla, portfolio manager at Perceptive, said in a statement. “Adding an MSK solution to their offering accelerates that progression, and made Omada an even more attractive opportunity for us.”
CNBC also reports that roughly $30 million of that investment was used to purchase Physera. However, an Omada representative declined to confirm that information to MobiHealthNews.
Omada's existing digital disease-management programs have focused on diabetes prevention and management, hypertension, and behavioral health. Alongside coaching, the company can monitor its users' progress using a range of connected technologies, such as glucometers, blood pressure cuffs, wireless scales, pedometers and more.
Physera's platform, meanwhile, was also available to employer, health plan and direct-to-consumer channels. It relies on a network of licensed physical therapists and doctors of physical therapy to virtually diagnose patients and adjust their digital MSK treatment program. Patients can follow these programs through the app with the aid of exercise animations, and the company can help arrange for home delivery of physical therapy equipment if necessary.
WHY IT MATTERS
While Omada's repertoire of digital disease management offerings already covered a range of common high-cost conditions being targeted by employers and plans, MSK care is no slouch in terms of spending. According to Omada, annual MSK care spending in the U.S. averages at $7,800 per person. Further, the company noted in its announcement that these conditions often present as a comorbidity of Type 2 diabetes and obesity, suggesting that Omada's assorted programs could work in tandem with its new MSK program.
Notably, expansion into MSK and the acquisition of a vetted network of licensed providers gives the company a more comprehensive selection of programs than its digital chronic-care competitors like Livongo – some of which, like Livongo, have been reporting impressive growth and client acquisition over the last few months.
“Omada’s ambition has always been to build the most comprehensive digital care provider based on the needs we were seeing from our participants and partners," Duffy told MobiHealthNews in an email. "But in doing so, we have always ensured that we maintain the clinically-based, human-led focus we think is necessary to drive sustainable outcomes. This acquisition not only enables Omada to cover a wider range of conditions with greater clinical depth than any other company, but it provides a one-stop-shop solution for true digital care driven by human expertise and empathy.
"Now, more than ever, we believe effective digital care must empower human connection, instead of seeking to replace it with automation. Bringing on Physera’s team and nationwide network of qualified physical therapists is a natural, and important, next step in Omada’s evolution.”
THE LARGER TREND
Omada's acquisition and raise come at a time when demand for virtual-care services of every kind is stronger than ever.
Both Livongo and Teladoc recently reported impressive growth and client acquisition over the last few months, and attributed at least some of their momentum to the ongoing COVID-19 crisis. Further, a research survey conducted last month suggested that many digital health companies are anticipating increased adoption of virtual services among patients to persist beyond the outbreak.
The digital MSK space in particular seems to be gaining some traction as well. While Physera brought in an $8 million Series A just over a year ago, others, like Sword Health, Kaia Health and Risalto Health, have also pulled in seven-figure rounds for their assorted MSK offerings.
But the standout has without a doubt been Hinge Health, which just a few months ago announced a $90 million Series C raise, hundreds of upcoming hires and a skyrocketing customer base. In March, the company was among the latest listed in CVS Caremark's "Vendor Benefit Management" service. More recently, a 10,000-person study published in JMIR suggested substantial pain reduction among those using its digital exercise-therapy program.
ON THE RECORD
“Omada has been a pioneer in developing evidence-based, clinically rigorous programs that deliver real-world results,” Dan Rubinstein, CEO of Physera, said in a statement. “They’ve designed programs that deliver outcomes at scale while never forgetting a fundamental truth: in healthcare, human connection matters, especially when that care is delivered digitally. It’s a philosophy we’ve shared at Physera, and we are excited to join the Omada team.”