Non-adherence to treatment plans and prescribed medications is one of the largest problems plaguing the healthcare systems and it affects patients, healthcare providers, pharmaceutical companies, and healthcare systems alike. In fact, medication non-adherence alone is said to cost in excess of $300B per annum and this does not take into account any of the societal costs. Wellth, founded in 2014, is a platform that is using behavioral economics to incentivize those with chronic conditions people to not only adhere to their treatments but also adopt habit-changing behaviors to ensure their long-term health to improve outcomes. This is done through an easy-to-use app for patients that are put on the app by their healthcare provider or insurance company. The platform already has over 5000 daily users and projects it will continue to grow to 50K by year’s end.
LA TechWatch caught up with CEO and Cofounder Matthew Loper to learn more about how his personal experience with relatives pushed him to launch Wellth, the company’s future plans, and most recent round of funding, which brings the total funding raised to $17.6M.
Who were your investors and how much did you raise?
This announcement was Wellth’s $10M Series A round. Existing investors yabeo and Boehringer Ingelheim Venture Fund (BIVF) co-led the funding round with participation from returning investors AXA Venture Partners, New York Life Ventures, NFP Ventures, I2BF Global Ventures, and Partnership Fund for New York City, and new investors Rock Health and DaVita Venture Group.
Tell us about your product or service.
People with serious chronic conditions often lack the necessary motivation and habit formation tools they need in order to take the daily steps to manage those conditions. This leads to a lot of avoidable costs for the healthcare industry and poor health outcomes. Wellth uses the science of human motivation and habit formation to motivate people to take care of themselves every day through financial incentives and behavioral reinforcements.
Once enrolled, members use Wellth’s platform to submit scheduled check-ins that align with their care plans. They get a fun, easy, motivating experience along with instant gratification in keeping their daily reward amount, which they get to “cash-out” at milestone intervals throughout the duration of their program.
What inspired the start of Wellth?
I created Wellth after I witnessed my Aunt and Uncle (siblings), both with the same diagnosis of type-2 diabetes, have drastically different outcomes based on their daily care plan adherence behavior patterns. My Aunt was 100% adherent to her care plan, taking every medication at the exact time she was supposed to and doing all her blood sugar readings each day. She has had the diagnosis for 25 years and has it highly managed with no complications. My Uncle, on the other hand, was disengaged with his care plan, often missed his medications, and did not follow his prescribed care plan, which unfortunately led to him passing away as a result of complications to his condition. This led me to dive into the world of behavioral economics, which is the study of why people often behave irrationally despite knowing what is best for them and intending to do what’s best. From there, Wellth emerged.
How is it different?
While others have tried to boost care plan adherence with technology, reminders, and coaching solutions, Wellth is a pioneer in applying the concepts of behavioral economics to create motivation and improve population health at scale.
People usually intend to adhere to care plans and build healthier habits, the complexity of human motivation all too often stands in the way. By bridging the intent-to-behavior gap, what someone intends to do, versus what they actually do, with keeping their daily financial reward allowance for completing an action, Wellth has demonstrated the ability to create long-lasting results.
What market are you targeting and how big is it?
Wellth partners with health insurers and healthcare providers who seek to improve clinical outcomes and cost savings within their highest-risk member populations. Our partners often manage highly complex patients with health complications who are adversely affected by multiple social determinants of health. Wellth’s rewards program simultaneously addresses our partners’ needs for a chronic disease management solution, a care management support service, and social determinants of health intervention.
This market accounts for approximately 59 million lives under Medicare and 243 million lives covered by either employer-based insurance (159 million) or non-employer based insurance (84 million).
What’s your business model?
Our business model is extremely simple, Wellth only gets paid if our members actively participate in the program and hit their care plan goals. This ensures our partners have ROI for the program and that their patients achieve their health outcomes. On average, our partners see a 2-6X ROI., but we’ve seen as high as 11X.
How has the business been impacted by COVID-19?
Wellth’s outcomes and program participation have improved since the COVID-19 pandemic began, as members are more engaged than ever with remote monitoring of their health. The number of members using Wellth every single day has risen by 500% since the beginning of March and they are hitting all-time highs for care plan adherence.
We have adapted to meet our partners’ needs, by supporting members through:
- Leveraging our SMS support system to send important COVID-19 information to members from their care teams
- Wellth’s member support team has been acting as an extension team for our clients by directly connecting members to Teledoc and Care Managers for clinical concerns and COVID-19 triaging
As a result, we have received incredible testimonials from both our members and partners on how Wellth has supported them through this challenging time, some examples include:
- “I am unemployed like many other people, so this would help a lot.” Wellth Member (Medicaid)
- “ I am now in the habit of taking my medications and I haven’t been to the hospital since I started with this program” – Wellth Member (Medicare Advantage)
- “Wellth helped me take my medications on time and the rewards helped me pay for things like food, supplies, and household items.” – Wellth Member (Medicaid)
- “Thank you for sharing this – it has been perfect timing to roll out this resource. Thank you for the Wellth team’s work!” – Wellth Customer who launched Wellth Program in March 2020
What was the funding process like?
Fundraising always takes longer and is way more complicated than you expect. We were very lucky to have one of existing investors and customers, Boehringer Ingelheim, approach us early in our process with the hopes of leading the round. But despite that, it still ended up taking ~6 months to figure out the syndicate and close everything. Ultimately, we are very excited to have so many existing and new customers as investors which shows how much they value the service and we are able to grow our team to continue to support larger member populations.
What are the biggest challenges that you faced while raising capital?
The challenges we faced were pretty typical. Investors don’t commit until they see others commit. Then once you’re getting ready to close all of a sudden everyone wants in at the last minute. We actually ended up oversubscribed and we’re doing another close now to take in an additional $1.75M because a few investors committed at the last minute. It’s a great place to be in and we’re very grateful for the support but you can’t help but feel like “where were you three months ago when I was losing sleep over filling out our syndicate?”
What factors about your business led your investors to write the check?
In digital health, it takes several years to prove that your solution is improving patient outcomes. Once you develop these proof points, you can start to get traction with very large potential customers. Over the past few years, we have been able to demonstrate tremendous results like a 134 patient study where we cut heart attacks almost in half, then we started to show the same results in large 1,000+ patient populations. We are now at a tipping point where our programs are being launched with new customers in 10,000+ patient populations and investors saw a clear path to us being a very large and important company in healthcare.
What are the milestones you plan to achieve in the next six months?
Wellth is focused on three key milestones for the remainder of 2020:
- Hiring key roles within the organization that will help further our capacity and success
- Executing a robust and consistent marketing strategy to showcase Wellth to prospective and existing partners
- Deploying key product feature enhancements that increase the number of behaviors and conditions Wellth program can track related to care plan adherence
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
Every entrepreneur has gone through tough times. Times when it’s not clear whether or not you’re going to be able to make it. Investors fall through at the last minute. Customers cancel orders. Employees that you view as family leave. But what I have seen is that the companies that can make it through tough times and come out the other side stronger are the ones that win in the long run.
Every entrepreneur has gone through tough times. Times when it’s not clear whether or not you’re going to be able to make it. Investors fall through at the last minute. Customers cancel orders. Employees that you view as family leave. But what I have seen is that the companies that can make it through tough times and come out the other side stronger are the ones that win in the long run.
Where do you see the company going now over the near term?
We’re on a mission to help as many people as possible reach better health outcomes. Right now, we serve about 5,000 members per day and by the end of next year, we expect that number to be close to 50,000 based on our current growth rate. It’s a very exciting time for us to see the impact we’re making on these populations now happening at scale!
What is your favorite restaurant in LA?
It’s too hard to pick just one so I’m going to cheat and list my top 3 – Felix, Kato, and Gjusta.
You are seconds away from signing up for the hottest list in Los Angeles Tech! Join the millions and keep up with the stories shaping entrepreneurship. Sign up today
