Bardavon Health Innovation, a workers' compensation and physical therapy company, snapped up PeerWell to expand its musculoskeletal digital health solutions.
With the deal, the two companies will offer a hybrid physical therapy experience that pairs in-person physical therapy with virtual tools to support patients before, during and after injury, according to the companies.
Bardavon did not disclose financial details of the deal. Axios reported Tuesday that Bardavon paid eight figures in a roughly even split of cash and stock for San Francisco-based PeerWell.
As part of the cash and stock transaction, PeerWell investors will become Bardavon shareholders, including institutional investors XSeed Capital and OMERS Ventures.
The combined company will now be one of the largest MSK provider networks with an estimated 21,000 physical and occupational therapy providers across all 50 states, with 90% U.S. population coverage, according to Bardavon.
The Overland Park, Kansas, company works with more than 100 self-insured employers, carriers and third-party administrators including four Fortune 500 employers.
“We focus on the worker and the unique clinical and professional needs of that population, understanding how the patients’ existing health, lifestyle, and job demands factor into their recovery,” said Matt Condon, CEO and founder of Bardavon Health Innovations, in a statement. “Bringing in PeerWell’s leading digital engagement capabilities is the next evolutionary step.”
PeerWell co-founder and CEO Manish Shah said the combination creates something that hasn’t existed in the market—“a complete 360-degree” care experience for people with MSK conditions.
Founded in 2015, PeerWell designed a digital solution to help patients before and after surgery or other treatment for serious conditions. Using devices the patient already owns, PeerWell treats the root cause of MSK pain and immobility through telehealth visits and digital content delivered by smartphone or tablet that help patients through physical therapy exercises.
"This pairing between what occurs in the clinic and what occurs at home has the chance to alter worker health on a totally different scale," Shah said in a statement.
The labor worker comprises 40% to 50% of the entire American workforce, and MSK injuries are the leading cause of work-related injuries and disability, with employers spending as much as $20 billion a year on MSK-related workers’ compensation, according to Bardavon.
“MSK is a significant area where we have still not seen clinical and digital care well-integrated,” said PeerWell board member Jonathan Slotkin, M.D., chief medical officer of Contigo Health and vice chair of neurosurgery at Geisinger. “Of the care journeys driving employer-sponsored healthcare spending, 34.2% is spent on MSK conditions—a greater amount than any other category including cancer, diabetes, and behavioral health.”
Competition in the virtual MSK market has been heating up in the past few years, with investors pouring big bucks into startups and companies making strategic M&A moves.
Sword Health, a virtual provider of MSK care, reached health tech unicorn status back in November with an additional $189 million in funding.
Hinge Health, a digital health company with a virtual MSK clinic, announced a $600 million series E round in October, sending its valuation to $6.2 billion.
In other market moves, Omada Health acquired virtual physical therapy company Physera for a reported $30 million, and telehealth company chronic condition management company DarioHealth also expanded into the virtual MSK market in October with its launch of a new physical therapy program for non-acute MSK pain.
Google and ProMedica Health System jumped into the rapidly growing virtual care market to get a piece of the $213 billion that's spent annually on MSK care. The two companies announced a partnership last fall with IncludeHealth to launch a MSK operating system that any provider can use to offer integrated virtual physical care for MSK patients. The platform is hardware-free and device-agnostic, according to the companies.