Omada Health Raises $48M for Obesity Prevention; Humana and Providence Among Investors

Digital health provider Omada Health has raised $48 million in Series C funding with current clients Humana Inc., and Providence Health & Services among the investors, Omada announced in a statement early today.

Funds raised will be used to help Omada expand its clinical research and publishing schedule, which the company said will “drive continuous improvement and enhancement” of Prevent, its flagship digital lifestyle intervention program that seeks to help individuals reduce risk of chronic diseases related to obesity, such as diabetes and heart disease.

Prevent is an evidence-based program that has received CDC approval to meet the standards for obesity prevention counseling as called for by the US Preventive Services Task Force. It give participants wireless access to a personal health coach, a proprietary health curriculum, and connection to a peer support network.

“At more than $500 billion a year, the cost of obesity-related chronic disease for employers, insurers, and our country is staggering. Prevent has been held to the highest clinical rigor, is proven to work, and can be scaled to deal with the size of this epidemic,” said Sean Duffy, CEO and co-founder of Omada Health.

Duffy noted that 2 investors are current customers, including 1 of the nation’s largest payers in Humana. Asked by The American Journal of Managed Care if this investment would signal expansion of the relationship with Humana and Providence, which operates hospitals in 5 states, Duffy said that Omada “absolutely” looked forward to expanding its relationships with these partners.

The relationship with Humana is of special note given its footprint in the Medicare Advantage (MA) market; data announced with the proposed Aetna merger showed that Humana has 3.2 million MA members. Humana’s expertise in government-related business made it attractive in merger talks, as more than half (56%) of the post-merger enrollment would be from Medicare and Medicaid business if regulators approve the union. It is unclear yet if Omada would have access to Aetna’s current 1.2 million MA clients if the merger succeeds.

Duffy said in an email to AJMC that Omada is eager to expand into the MA market and is already doing some work in Medicaid programs. “We’d also love to expand into the Medicare market more generally—but unfortunately, there’s a problem with that: right now Medicare will reimburse providers who screen for diabetes, and obviously they’ll reimburse for treatment. But right now, there’s no reimbursement for diabetes prevention, which makes very little sense when you look at the clinical research and the cost projections.”

CMS’ lack of reimbursement on preventive measures has been noted by others—it is point of contention in the type 1 diabetes community who advocate for reimbursement for continuous glucose monitoring (CGM) technology, for example.

Many put hope in current demonstration projects by the Center for Medicare and Medicaid Innovation, as well as the Medicare Diabetes Prevention Act, which enjoys broad bipartisan support. Advocates note that paying for prevention of diabetes, particularly among Medicare beneficiaries, is entirely consistent with HHS Secretary Sylvia Mathews Burwell’s stated goal of reaching 50% value-based reimbursements by 2018.

Additional Omada investors in today’s funding include US Venture Partners, Andreessen Horowitz, GE Ventures and dRx Capital.