Becker's Hospital Review

91 Health IT who have the right product at the right time, says Teresa Wang, strategy manager at Rock Health, "Timing is so important," she says. "You need to understand the market and what it's ready for." Rock Health leaders saw this thorough market understanding in Adrian James and Sean Duffy, cofounders of disease management solution platform Omada Health and members of Rock Health's inaugural class in 2011. Mr. James and Mr. Duffy met at design consultancy firm IDEO where Mr. James, who had been with the com- pany for years, and Mr. Duffy, a Harvard MBA candidate, were paired to conduct preliminary re- search on feasibility of using well-designed tech- nology for disease prevention. The pair interviewed a large sample people who had recently been diagnosed with prediabetes. "We wanted to see if that moment [of diagnosis] was meaningful for them, if it was a catalyst to take a new direction," says Mr. James. Turns out, it was. The interviews revealed that peo- ple with prediabetes often had the desire to change course and avert disease but lacked appropriate re- sources. "We were so compelled, we kept digging," says Mr. James, and the pair began combing through clinical trials about disease prevention and consum- ers' use of health tracking technology. They soon broke off from IDEO and formed digital therapeu- tics firm Omada Health in 2011, and the startup was recruited by Rock Health three weeks later. Omada Health's flagship product, Prevent, is an online diabetes prevention program designed to promote the behavioral changes that can stave off type 2 diabetes. Users receive personalized coach- ing through a digital platform the former IDEO employees and their team designed to integrate as seamlessly as possible into the user's daily life. Since its launch, Omada Health has enjoyed con- siderable success. To Mr. James, a point of pride is the fact Omada Health has self-insured employers, traditional health plans and integrated delivery systems all as customers. Prominent clients include Oakland, Calif.-based Kaiser Permanente, Blue Cross Blue Shield Louisiana and Stanford (Calif.) Hospital and Clinics. In April, Omada Health an- nounced $23 million in a Series B funding round that included Kaiser Permanente Ventures. Mr. James credits much of Omada Health's suc- cess to the company's focus on designing a prod- uct that works for the people Mr. James and Mr. Duffy had interviewed while at IDEO. Diabetes results in about $176 billion in direct medical costs every year in the U.S. A product that keeps users with prediabetes engaged in a prevention plan has tremendous value to Omada Health's real customers — payers and providers. Under- standing that dynamic is key to success in the dig- ital health marketplace, says Mr. James. "Without understanding how healthcare is bought and sold, it would be really hard to make traction," he says. Rock Health's Ms. Wang says not all health IT startups understand the healthcare market in this way. "A lot of companies come in with good ideas but without an understanding of how people are going to use their product," she says. "There's so often a misalignment about where the value is added." Understanding what would be valuable for healthcare stakeholders is not a problem for Evo- lent Health, founded in 2011 by UPMC Health Plan and The Advisory Board Company. The company's proprietary software platform, able to integrate and analyze clinical and demographic information to identify at-risk subpopulations and help devise interventions, was created by in- dustry stakeholders with an in-depth knowledge of both the necessity and challenge of moving to a fee-for-value world. In September 2013, Evolent announced $100 mil- lion in Series B funding and in January 2014 was named to Forbes' annual list of the most promis- ing companies in the U.S. Currently, Evolent's cli- ents include some of the country's largest health systems, such as Nashville, Tenn.-based Vander- bilt University Medical Center and Piedmont Healthcare in Atlanta. "It is these partnerships I'm most proud of across the nearly 25 markets we serve," says Frank Wil- liams, CEO of Evolent. "Pursuing a new way of delivering care, of doing business really, is no small thing... Seeing the results these systems are driving is immensely rewarding." Mr. Williams credits his company's success to Evo- lent's powerhouse founders and investors and the company's culture, but mostly to the fact Evolent has created a useful tool for healthcare providers. "You need to solve a real problem," he says." Better yet, do it in a way that empowers providers and physicians to design, lead and own the ultimate solution." n MORE ONLINE: For further reading on digital health startups, check out the following stories on BeckersHospitalReview.com: n 5 mHealth Startups to Watch n Health IT M&A Activity Grows in First Half of 2014 "They need to be committed to the problem and committed to figuring out the right way to scale it and to do it ... We want to support entrepreneurs who have a mission, and who will [affect] change on a large scale." — Teresa Wang, Strategy Manager at Rock Health By Helen Gregg

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