Some Health Care Startups Require Performance-Based Contracts

Even as many hospitals and health care systems continue to evaluate whether to participate in risk-based reimbursement models, some health care startups are betting their futures on it.

A number of startup companies like Virta Health, which provides type 2 diabetes patients with coaching and tracking services, have begun requiring performance-based contracts. The company’s customers, which include insurers and self-insured employers, pay only for the patients whose outcomes are improved, according to Forbes.

Cricket Health, which has raised more than $25 million from investors including Cigna and First Round Capital, helps patients with chronic kidney disease to put off the need for expensive dialysis. Cricket staff (a mix of social workers and clinicians) review the medical records of insurers’ patients to spot those at risk for developing chronic kidney disease. They also educate patients about how to get on a kidney transplant list and the benefits of in-home dialysis vs. a clinic setting, and help them get the treatment they need to stay healthy. The lower the cost of medical care needed, the more money Cricket receives.

Onduo, a joint venture in diabetes care from the drugmaker Sanofi and Verily, the life sciences company from Google’s parent company Alphabet, is taking its pay-for-performance commitment a step further. It requires customers of its tech-based diabetes management solution to pay based on outcomes. Earlier this year, Walgreens began offering its employees with type 2 diabetes Onduo’s suite of connected glucometers, software that tracks trends in the numbers and specialists available via telemedicine. Other customers include Emory Healthcare in Atlanta and Blue Cross Blue Shield insurance plans in Arkansas, South Carolina and Georgia.