The Patient Engagement Revolution: Why we led Wellth’s $20M Series B

Healthcare costs Americans a staggering $4.1 trillion dollars each year. But what actually drives all that cost? One glaring, seemingly avoidable factor is patient behavior. Six in ten adults in the U.S. have a chronic disease— the conditions that lead to 86% of our healthcare costs. Individual behaviors—attending doctor’s appointments, taking medications as prescribed, and “knowing your numbers” are crucial in managing these chronic conditions. In fact, $300–500 billion each year is wasted just as a result of prescription medication non-adherence and mismanagement, according to the National Institutes of Health.

That’s why we're leading a $20M Series B round into Wellth, the leader in leveraging behavioral economics to drive adherence to prescribed care and treatment plans. You can read more about the news from Wellth and Fierce Healthcare.

As mentioned above, six in ten Americans suffer from a chronic health issue—including both authors of this piece. That’s more than 200 million of us dealing with ongoing treatment programs. To reduce the waste from non-adherence, Wellth is pioneering better ways to incentivize this group to remain steadfast in their treatment plans, focusing on a massive needle mover: motivation. Specifically, engaging and motivating the population that is most at risk of going astray from healthy decision-making—the 25% of Medicare beneficiaries that incur 96% of the costs(!).

Behavior: The true unlock

Forty percent of health outcomes can be linked directly to personal decisions—not genetics, not quality of care, and not social determinants like income, according to the Kaiser Family Foundation. We all have friends or family who know they need to get to the gym to be healthier but can never quite stick to it. There’s a big difference between knowing what we need to do to take care of our health and actually doing it. Especially for senior citizens and lower-income Americans—people who may not have the time, energy or motivation to keep up with daily health choices—leading patients to disengage from their care plans.

Disengaged behavior takes many forms: skipping appointments, forgetting medication, not checking key health signs frequently, etc. These may sound like minor slip-ups, but they can often cause extremely harmful (and expensive) effects down the line. Consider:

• Heart attack: Patients who don’t take their heart medications after a heart attack are 2x more likely to have a second heart attack in the next three months.
• Kidney disease: Patients with end-stage renal disease (ESRD) who miss one dialysis appointment are 3x as likely to end up in the hospital (and have 50% higher mortality).
• Diabetes: Patients with diabetes who don’t check their glucometers or miss oral insulin prescriptions can be unaware of their blood sugar being either far too high or far too low. There were more than two million diabetes-related emergency room visits annually in the U.S. in 2021.

How Wellth helps

Wellth uses behavioral economics to drive better outcomes, primarily through a monthly rewards system. Patients use the Wellth app to document daily healthy behaviors (like taking their medication as directed)—and depending on the activity, a fraction is deducted from their reward if it’s not completed. Wellth’s programs are delivered by leveraging key behavioral psychology principles such as:

• Loss aversion: A $10 loss feels worse to us than how good a $10 gain feels
• The intent-behavior gap: What we plan to do doesn’t translate to what we will do
• The endowment effect: We value things more when we own them

Wellth partners with some of the nation’s largest health insurance companies (e.g., United Healthcare, Centene) to motivate their most vulnerable members. Wellth reaches out to these people, gets them to download the app, and motivates daily action with their treatment plan.

The rewards members receive are subsidized by those health insurers, and depending on the program, they are triggered by different user inputs—it may be snapping a picture of pills in your hand, showing a glucometer reading, or confirming presence at appointments. In each case, it’s as easy as texting a photo. That’s why Wellth has engagement rates that are completely unheard of in healthcare. 91% of Wellth’s users use the app every day. That’s 3x the engagement rate of TikTok’s user base.

In short, Wellth uses modern technology to get people to actually make the decisions that they know they ought to make, benefitting both their physical health, and the health of the U.S. healthcare system as a whole. Wellth’s co-founders, CEO Matt Loper and CTO Alec Zopf, have kept their mission of a healthier America front-and-center as they built this company together, leveraging expertise from prior careers in healthcare advisory and data engineering.

The proof that Wellth works

Great, so people log in and use the app. But that sounds like we’re spending more money, doesn’t it? Where’s the proof that people engaging with the app actually saves money downstream, by avoiding ER visits and the like?

Having served more than 30,000 patients, the outcomes are nothing short of a revelation:

• Missed appointments: Decreased 15% (keeping the system moving efficiently)
• Emergency room visits: Decreased 29% (ER visits are incredibly costly)
• Days spent in the hospital: Decreased 42% (hospitalizations are even more costly)
• Annual savings per patient: Over $2,500
• Total savings to the U.S. healthcare system: $50+ million to date

Across the estimated 30 million polychronic and disengaged individuals in the U.S., Wellth could eventually reduce the cost of the U.S. health system by over $75 billion.

Why Wellth chose SignalFire

Before investing in Wellth, SignalFire spoke to more than 50 companies in the patient engagement space. We determined that patient behavior change around medication non-adherence was the most important problem to solve. When we saw the engagement rate, the increased adherence, and the savings to health plans Wellth was generating, we knew we’d found a winner.Every investment is a two-way street. So once we decided to work with Wellth, they had to decide to work with us. When asked why they did, Wellth’s CEO Matt Loper told us:

"Every venture fund I’ve ever met has promised to add value beyond capital—but SignalFire is the first I've known to exceed all expectations. They uniquely understand the challenges founders face and have purpose-built their team to help them overcome those challenges. Every team member is an expert in their field that goes above and beyond to help their portfolio companies. Chris Farmer and Chris Scoggins have seen firsthand how companies define industries and scale. Tawni and Heather help us think through how to best grow our team. YY and Tony immediately became a key extension of our executive team. And of course, there’s SignalFire’s XIR Frank Williams, who is a force of nature and would be a first-ballot inductee into the Healthcare Hall of Fame. Working with Frank and the whole SignalFire team has already proved to be a dream come true."

—Matt Loper, CEO of Wellth

Matt is referring to the unique Executive-in-Residence (XIR) program that SignalFire designed for situations just like this one: pairing A) startups serving a clear market need and with the potential to be generation-defining companies, with B) deeply experienced industry leaders in their field who have founded and scaled massively influential companies.

In this case, to help find a company working on a solution to the patient motivation problem, SignalFire partnered with XIR Frank Williams, former CEO of the Advisory Board Company (acquired by Optum for $2.5B) and founder/CEO of Evolent Health (NYSE:EVH, $3B+ market cap).

Williams, who is joining as the chairman of Wellth’s board of directors, shared, “I haven't seen a venture firm that has made such a comprehensive investment in supporting entrepreneurs in scaling their businesses successfully.” He added:

What’s next?

Health outcomes are driven by behaviors, and Wellth is fundamentally evolving the way we think about healthcare behavior change. We are incredibly excited to be a part of the journey alongside Matt, Alec, and the entire L.A.-based Wellth team, as well as their new chairman Frank Williams. There are so many systemic issues in today’s healthcare system that it can feel impossible to change, but Wellth is showing us that with technology and an innovative approach to patient motivation, we can make a real difference.

And they’re hiring! If you want to help make a change in the way we take care of ourselves in this country, reach out!

*SignalFire may engage Affiliate Advisors, Retained Advisors, and other consultants as listed above to provide their expertise on a formal or ad hoc basis. They are not employed by SignalFire and do not provide investment advisory services to clients on behalf of SignalFire. For more information on their specific roles, please contact us. Portfolio Company Endorsements: Certain portfolio company founders or Affiliate Advisors listed above may or may not be current investors in a SF fund in which they receive a fee reduction. Such fee reductions were not provided in exchange for or an incentive for their feedback, nor contingent upon the individual’s approval for SignalFire’s continued use. Please refer to our website foradditional disclosures.