Issue 062
Digital health research from Brian Dolan

 E&O: Employers

Welcome back to E&O’s Selling to Employers, the enrollment-focused digital health newsletter from Exits & Outcomes — for paying subscribers only. This newsletter digs into digital health companies that sell to self-insured employers, fully insured plans, and other payers. It’s digital health as an employee benefit.

This edition of E&O: Employers includes a breakdown of a big company’s digital health-related benefits. If you’d like a quick summary of what E&O found in its analysis of the first 50+ BigCo benefits it dug into, check out this searchable, sortable database right here. Here are a few quick notes before we dig into the Dario-Twill merger and Budweiser’s employee benefits:

• Spring Health announced that it added 2Morrow’s smoking cessation program to its offerings.
• Omada announced an enhanced version of its GLP-1 Care Track, which now has an additional focus on maintaining muscle mass.
• Lyra announced a new program called Lyra Complex Care that focuses on severe mental illness. “When building Lyra Complex Care, we focused on four critical components not offered anywhere else: a specialized network of facility partners; a dedicated multidisciplinary team of complex care experts; a comprehensive assessment and triage process designed to precisely connect members to the right level of high-acuity care; and true end-to-end support.”
• Here are a few Lyra Health employer customers who ended their contract with the EAP provider this year: Hinge Health (ended February), WeWork (ended January), and Anaplan (ended January).

Was this forwarded to you? Increasingly, E&O is a covered benefit from many forward-looking digital health-focused employers. Why not yours? Consider a Business or Enterprise subscription today. Click this link to become a paying subscriber (there are personal plans available too).

Details: Dario acquired Twill and hopes for a 6 percent boost in enrollment from its AI navigator

This week publicly traded Dario, a digital health company historically focused on diabetes management programs for employers and health plans, acquired Twill, the company formerly known as Happify, for a little more than $30 million. The deal included a $10 million upfront cash payment followed by about $20 million in stock payments set to pay out in four tranches at nine months, a year, 18 months, and two years from the deal’s closing date on February 15th. Twill tapped its financial adviser TD Cowen “four or five months ago” and decided to pursue an exit because of “market circumstances” and “capital circumstances,” executives said during a call with Dario’s investors this week. Since the news broke a few days ago, I’m going to dig into a few details revealed by the companies in the SEC filing and presentation to investors and Wall Street analysts.

Twill’s big-name employer customers: Twill/Happify landed three big-name employers, but the company rarely names them all. Amazon, Microsoft, and Google all offer Twill’s behavioral health programs to their employees. Microsoft and Google have been customers of Twill for more than three years, while Amazon began offering Twill’s programs to its employees in 2022. On the call, the Dario and Twill execs said that Amazon has a more “comprehensive deployment” of Twill’s programs than the other two. Amazon offers a combination of Twill Care digital therapeutics (12 medical condition-focused programs) as well as live coaching powered by Twill’s partner YourCoach.

Twill’s big-name health plan customers: Twill/Happify brings two key health plan relationships to Dario as part of the acquisition. Twill has worked with Cigna for many years and it also has a deal with Elevance. Here’s how Cigna pitched Twill in one of its customer’s benefits marketing brochures: “Twill is a self-directed program with science-based games guided meditations, designed to help defeat negative thoughts, reduce stress and anxiety, and boost overall well-being.”

Dario just went live with a big Aetna partnership in 2024: On a call with investors, Dario execs said that this deal with Aetna was a takeaway from Teladoc, which offered its MyStrength behavioral health program to Aetna members. So, those are the combined entity’s three big payer partners: Cigna, Aetna/CVS, and Elevance.

Expands relationships with two pharmacos: While Twill has had partnerships with many pharmaceutical companies over the years, during the investor call, executives from Dario and Twill only said that the Twill acquisition will help Dario expand its relationships with Eli Lilly and Merck. They also said that between 22 percent and 27 percent of the combined entity’s revenue currently comes from pharma deals.

2023 Revenue: The companies shared revenues for each company for the first nine months of 2023: $16.7 million in Dario revenues and $13.8 million in Twill revenues. On the investor call, the company said you could extrapolate this out to about $40 million in revenue for 2023. So, Twill’s programs contributed about 45 percent of the revenue in this retrospective, which suggests this acquisition is (almost) a merger of equals rather than a tuck-in acquisition.

Twill brings SaaS, aka PEPM, to Dario: The companies’ announcement touted Twill’s SaaS-like model as one of the positives of the deal. This is another way of saying some of Twill’s behavioral health offerings operate on a per employee per month (PEPM) pricing schedule — the customer pays regardless of utilization. PEPM brings more predictable recurring revenue.

Enrollment, activation, and retention numbers: The companies shared a handful of numbers related to enrollment, activation, and retention during their call with investors. On the enterprise side of its business, the company said it enrolls about 35 percent of eligible members. Across all covered lives it said it enrolls about 20 percent of members, which is the number the company often refers to as its activation rate. Dario says it has north of 25 percent or 30 percent enrollment after the second year. It also says that it retains 80 percent of its program participants year-over-year. While a Dario exec made those claims on the call with analysts, the company also had a slide that showed a 30 percent enrollment rate and 75 retention rate.

How Twill will boost Dario’s enrollment rate: Dario expects that this deal with Twill will raise its enrollment rate significantly. According to a slide in the investor deck, Dario estimates that Twill’s navigation offering will increase enrollment rates by 6 percent for Dario’s chronic condition programs:

In case the slide above is hard to read, the three products that Twill is bringing over to Dario are a maternal care offering, a benefits navigator, and self-guided digital programs that it calls digital therapeutics.

Here’s a quick description of each taken from the slide above:

What about Aspiro? Notably, the discussion around this deal never mentioned Aspiro, the digital therapeutic that Twill had hoped to commercialize with help from a pharma partner. Aspiro uniquely aimed to treat both generalized anxiety disorder and major depression disorder. Twill publicly announced that it was seeking a pharma partner for Aspiro back in July 2023 and it said it would not bring Aspiro to market without one. It seems the company began seeking an exit about three months after publicly declaring that search.

A dig at the larger employer-focused digital health companies: Both Twill and Dario have been around for about a decade. During the call with investors the executives took a shot at some of their peers who have operated for about the same time period but managed to grow their revenues substantially larger. Dario plans to focus on profitability, which it aims to hit by the end of next year:

“Scaling revenues to $300 million but losing $150 million like other companies do is not what the market is looking for,” they said on the call.

What did I miss: Did any other notable metrics emerge from the Dario-Twill deal?

Budweiser’s (Anheuser-Busch) employee benefits

Digital health companies love to boast how many Fortune 500 customers they have, but they aren’t always able to share which big companies offer their programs. That’s where E&O comes in. This recurring feature of E&O Wednesdays digs into a Fortune 500’s (or similarly-sized employer’s) digital health stack. In past issues, I’ve written about the digital health benefits stacks of dozens of big companies. This searchable, sortable database over at the E&O site sums up the benefits stacks of more than 40 BigCos. Or, click any of the BigCo names below to read the newsletter that featured a full write-up for each:

• Walmart,
• Activision Blizzard,
• JP Morgan Chase,
• The Home Depot,
• Boeing,
• 3M,
• Chevron,
• BorgWarner,
• Bank of America,
• UnitedHealth Group,
• Costco,
• eBay,
• McKesson,
• Ford,
• Dell,
• AT&T,
• Disney,
• Novartis,
• Red Bull,
• VMware,
• T-Mobile/Sprint,
• Adobe,
• Phillips 66,
• Cox Enterprises,
• Wells Fargo,
• PayPal,
• Facebook,
• Sony Pictures,
• General Mills,
• General Electric,
• Comcast,
• News Corp,
• Vanguard,
• Nokia,
• HII,
• Fidelity,
• AbbVie,
• Dow Inc.,
• R.R. Donnelley & Sons,
• Target,
• Chipotle,
• W. W. Grainger,
• Tesla,
• Hitachi,
• Western Digital,
• AmerisourceBergen,
• Analog Devices,
• Citi,
• Xerox,
• Autodesk,
• ExxonMobil,
• Amazon,
• Oracle,
• T-Mobile (revisited),
• General Mills (revisited),
• Kimberly-Clark,
• IBM,
• MassMutual,
• BorgWarner (revisited),
• Ford (revisited),
• Koch Industries,
• Wal-Mart (revisited)
• DuPont,
• UnitedHealth Group (revisited), and
• The Coca-Cola Company.

For this issue, I dug into Anheuser-Busch’s employee benefits. AB InBev is the largest brewing company in the world. It’s the brewer of Budweiser, Michelob, Stella Artois, and Beck’s beers — just to name a few. While it employs around 20,000 people in the United States, its benefits package includes very few digital health programs.

Mental health: Talkspace, Calm, Ginger, MyStrength

Cigna and Kaiser Permanente are AB’s two health plan partners. The mental health programs offered via each plan are some of the only digital health benefits that AB employees have access to through their employer:

AB’s EAP is Health Advocate

Health Advocate offers AB employees 24/7 crisis support with counselors reachable by phone at any time. The EAP also hosts a variety of webinars and other resources related to mental health issues. Health Advocate offers three counseling sessions to AB employees and dependents:

While there is only one mention of MyHelp in AB’s benefits marketing materials, that’s the name Health Advocate uses for its virtual counseling. Sessions can be conducted via texting, phone, chat and video typically, but, again, AB didn’t spell out those options for employees.

Quest runs AB’s wellness program

AB Well is operated by Quest. It’s a pretty traditional incentive program to get employees to take certain basic actions like an annual physical or an annual know-your-numbers biometric reading. One of the items on a checklist makes clear that Cigna members can check the annual check-up box via a virtual visit with an MDLive provider.

AB offers Optum-owned Quit for Life for smoking cessation

WINFertility for fertility support and surrogacy help

AB employees who elect a Cigna health plan have access to WINFertility:

That’s a wrap on AB’s benefits. I’m always surprised to see big companies like this with no chronic condition management plans and no push to use virtual visits more. The one reference to MDLive I found was buried in the company’s wellness incentive checklist. Which big company benefits stack should I dig into next?

ICYMI: 87 Prices for Digital Health Programs in the E&O Pricing Database

ICYMI: I added 18 more prices to the E&O Digital Health Pricing Database, which now includes prices for 87 digital health programs. Prices vary for different channels and years, so some programs have more than one entry. E&O subscribers can click here to check out pricing info for programs from Big Health, Spring Health, Omada Health, Onduo, Hello Heart, Virta Health, Teladoc/Livongo, Hinge Health, Sword Health, Lyra Health, Headspace Health, Fern Health, Wondr Health, Kaia Health and more! If this was forwarded to you and you’d like to become a paying subscriber — click here.

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