Welcome back to E&O Wednesdays, the enrollment-focused digital health newsletter from Exits & Outcomes — for paying subscribers only. This every-other-Wednesday issue digs into digital health companies that sell to self-insured employers as well as others that rely on enrollment-based distribution for their digital health programs.
Here’s what’s happening in recent weeks in the world of employer-focused or enrollment-based digital health:
- If you missed it, on Monday I wrote about the ex-Livongo team’s SPAC, Health Assurance Acquisition Corp., instead of the usual weekly funding round-up. Lots of great feedback. Other names that popped up as potential targets from readers included Truepill, Wheel, Ro, and others.
- WTF Health’s Jessica DaMassa posted a rare interview with digital MSK clinic company, Hinge Health’s CEO and co-founder Daniel Perez (who doesn’t do many interviews). My favorite line was when Perez talked about the company’s recent raise: “We had $400 million in commitments within 22 hours of opening the round. So there was a lot of interest. And it’s basically like we’ve IPO’d in terms of how much we’ve raised. The average IPO this past year has raised $350 million or so and we raised $300 million. We could have raised $600 million if we wanted to — there was that much interest.”
- Now enrolling: Vida Health is making a push to enroll employees at PayPal right now. (PayPal is not a new client — it’s been with Vida since January 2019.) Notably, Vida’s CEO and co-founder Stephanie Tilenius was formerly an exec at PayPal.
- Speaking of enrollment activity, diabetes reversal company, Virta Health, launched a campaign in October 2020 to enroll workers at a Coca Cola bottling plant in the Southwest US. (That’s a fascinating subset of digital health enrollment campaigns: Ones that have to convince employees to stop consuming their company’s main product!)
- The news you know: Accolade acquired second opinions as a service company 2nd.MD for “up to $460 million… $230 million in cash, $130 million in Accolade common stock, and up to $100 million of Accolade common stock payable upon the achievement of defined revenue milestones.” The move is clearly designed to help Accolade match competitive offerings from companies like Grand Rounds.
- While we’re on the subject of Accolade: Remember their big deal with the Defense Health Agency for a benefits navigator pilot last May? Turns out that three-year pilot has a potential total contract value of more than $40 million. Coincidentally, Accolade also spent $120,000 on lobbying the federal government in 2020 on two issues, and — this may come as a surprise — one was the VA’s 2021 budget.
- One Drop, Bayer, and SCOR, the fourth-largest global reinsurer, are teaming up to bring One Drop’s digital health platform to life insurance carriers and policyholders in the US.
- Maven Clinic, a virtual first care provider focused on women’s health, disclosed a few of its growth metrics at the JP Morgan conference earlier this month. Maven’s “flexible enrollment engine” enrolls, on average, 70 percent of eligible members and maternity populations. The company’s revenue also “jumped 240 percent over the past year.”
- One more thing… There’s a lot of buzz about this Apple patent related to health coaching, and, sure, maybe that will turn into something. But look, I’m still a little bummed that an Apple patent I wrote about in 2010 (for a band-aid-like sensor that monitored an infant’s vital signs from the sole of their foot) never came to fruition. Ten years — and two sensorless babies later — I’m not sure it’s going to happen. So, maybe find a coach elsewhere for now?
Virgin Pulse: $300M revs and 30 percent EBITDA
At JP Morgan’s event earlier this month, Virgin Pulse CEO David Osborne shared an update that included a few financials and other growth metrics. E&O published a big report on Virgin Pulse in September 2020, so I was curious if the numbers reflected any progress since then or if Osborne revealed anything I didn’t uncover for in the report.
Apart from the $300 million in annual revenues for 2020 estimate, I think everything Osborne says here is new and not in the E&O report:
“We grew our bookings number 28 percent in 2019. We booked about $45 million [in 2020] in bookings in a COVID year. And we’re gonna grow our bookings 60 percent this year in 2021. We now have just over 13 million lives on our platform. And it puts us around $300 million in revenue doing about 30 percent EBITDA margins. And we have your typical SaaS gross margins.”
In September Virgin Pulse told me they had 12 million covered lives, which means they added 1 million in the past four months.
Osborne also noted that the quality of their revenue was maybe as important as the quantity of it. He said Virgin Pulse’s retention number is around 95 percent, and the distribution of their revenue is “solid.”
“We don’t have, you know, one massive client that takes up 10 percent of our revenue. [It’s] a nice distribution across international companies, multiple regions, both small, medium and large clients as well as multiple industries.”
Osborne also talked quite a bit about his company’s engagement rates: “Our daily engagement sits around 60 percent.”
The company’s enrollment rate is also around 60 percent on average.
In the first edition of E&O Wednesdays, I took a look at the multitude of at-risk fees in a Virgin Pulse contract that I found. Osborne mentioned that the company is increasingly putting together those kinds of contracts.
17 of Grand Rounds’ big logo clients
While Grand Rounds doesn’t count 3M, this week’s Fortune 500 Digital Health Stack company, as a customer, just about every other one E&O has dug into so far does work with the complex care, benefits navigation, care coordination, and virtual care company.
At the JP Morgan event earlier this month, Grand Rounds’ co-founder and CEO Owen Tripp shared precious few metrics about the company, but he did mention it now has 6 million covered lives. One slide also featured 17 of the company’s big logo clients:
Fortune 500 Digital Health Stack: 3M
Digital health companies love to boast how many Fortune 500 customers they have. This recurring feature of E&O Wednesdays digs into a different Fortune 500’s digital health stack.
So far, in past Wednesdays issues, I’ve written about the digital health stacks of Walmart, video game giant Activision Blizzard, JP Morgan Chase, The Home Depot, and Boeing.
This week, inspired by one of the earliest Livongo customers, I dug into 3M. 3M actually signed on to work with Livongo’s predecessor, EosHealth.
Livongo: 3M offers its employees Livongo’s diabetes management program, which it pitches as a $75/month service that is available to them as a covered benefit with no additional cost to them.
Omada: While Livongo is listed under the heading “diabetes management,” Omada is featured under a broader header of “disease prevention.” Omada’s pitch to 3M employees also includes a “no cost to you” line. Omada’s landing page never mentions diabetes prevention, but rather focuses on the employee’s goals “whether that’s losing weight, gaining energy, or improving your overall health.”
Best Doctors (rebranding to Teladoc): 3M’s second opinions service, Best Doctors, is rebranding for 2021 as “Teladoc (formerly Best Doctors).” I wonder if that will get confusing if 3M employees recognize Teladoc as a virtual visits provider too.
Doctor on Demand and Virtuwell: Under “virtual care,” 3M lists both Doctor on Demand and Virtuwell, which offers virtual visits with nurse practitioners, as its remote visits provider. Given 3M’s pre-existing relationships with both Livongo and Best Doctors, which are both now part of Teladoc, I wonder if Teladoc can unseat these two too.
Big Health: 3M offers Big Health’s Sleepio six-week program under the heading “sleep improvement program.” I think that’s the first time Sleepio has appeared on an E&O Fortune 500 stack list. (Correction: No, Big Health was also featured in my piece on The Home Depot stack, which includes both Daylight and Sleepio.)
Hello Heart: 3M employees also have access to Hello Heart’s blood pressure management program. Curiously, Hello Heart is the only digital health company listed in the benefits package that instructs 3M employees to email them or call a 1-800 number to enroll. The others sometimes list a 1-800 number but always include a website or (even more commonly) a dedicated landing page tailored to 3M.
Carrum: 3M’s Medical Center of Excellence vendor is Carrum Health, and it really seems to focus on helping 3M employees navigate their best options if they think they need hip, knee, shoulder, neck, back surgery or others.
3M uses CVS Caremark as its PBM. I wonder if the inclusion of both Hello Heart and Sleepio was thanks to the relatively new CVS digital health formulary, which it calls its Point Solutions Management offering?
Well, that’s a wrap on 3M’s stack. Some of these are easier to figure out than others, but let me know which company’s digital health benefits you’d like to learn more about.
And if you happen to work at such a company, please send me your benefits information!
And so ends Issue 006 of E&O Wednesdays. What’d you think? I thought it was a little light. Virtual JP Morgan hangover, maybe?
