Cigna Leads $50M Round of Financing for Omada Health

The health insurer Cigna today led a $50 million round of financing for Omada Health. The San Francisco-based digital health provider is among the technology companies that offers CDC’s National Diabetes Prevention Program (DPP), which is poised to be part of Medicare in 2018.

A statement released by the companies said Cigna-administered health plans will gain “no-cost access” to Omada’s digital behavioral health programs as a “fully covered preventive benefit.” However, the partnership is non-exclusive, which frees Omada to pursue arrangements with other payers. (Kaiser Permanente and Humana have also invested in Omada Health, according to a recent report.)

“Cigna is one of the most forward-thinking health service companies in the United States,” Omada CEO Sean Duffy said in a statement. “We love when our commercial partners invest, and Cigna’s lead on this fund-raising round is further validation that Omada’s behavior change approach to chronic disease is driving real results in the real world.”

In the joint statement, Cigna Chief Medical Officer Alan M. Muney, MD, MHA, said the transaction would continue the company’s practice of using behavior science to change habits and improve health. “Our work with Omada will further that expertise,” Muney said. “This relationship is more than an investment or simple collaboration—it’s an important step toward the future state of healthcare.”

Omada is among several companies competing in the crowded field of digital behavioral health, which seeks to leverage platforms consumers use every day—such as laptops and smartphones—to help them engage in healthy habits with support from coaches, access to personal health data, and better information about healthy food choices.

While payers have often called for greater focus on prevention to avoid skyrocketing costs of chronic disease, they have not always followed through with coverage for digital health platforms. In part, this is affected by the newness of processes for approving digital solutions, compared with longstanding protocols for approving drugs and devices.

For example, an official with CMS told an audience at last week’s meeting of the American Diabetes Association that the main challenge with getting Medicare’s DPP off the ground is creating new systems for billing and performance-based payment models from the ground up.

Preventing diabetes is a concern for both commercial payers and for Medicare, as the disease is blamed for an annual tab of $245 billion in healthcare costs and lost productivity. Already, $1 in $3 in Medicare is spent on diabetes, and that share will only grow without dramatic steps to reverse long-term trends in obesity, poor diet, and lack of exercise.

The National DPP was shown in a clinical trial to reduce the progression to diabetes by 58%. A recent analysis of 4 years’ of results that appeared in Diabetes Care showed promising results while pinpointing areas for improvement.