Digital addiction clinic Quit Genius is moving to a full-risk payment model for employers and health plans as enterprise customers show an increased interest in value-based care arrangements.
Through the payment model, the company gets paid only if it meets strict clinical, engagement, satisfaction and operational performance goals, according to executives.
The startup offers a virtual clinic for treating tobacco, alcohol and opioid addictions. Built on the evidence-based practice of medication-assisted treatment (MAT), Quit Genius combines virtual behavioral therapy with approved medication and connected devices to help employers tackle the high cost of addiction in the workplace.
The company integrates with health plans, pharmacy benefit managers and wellness platforms to deliver a turnkey implementation experience.
"Since founding Quit Genius, every contract we have signed has included fees at risk, so moving to a full-risk model is a natural evolution in our mission to help 100 million people conquer their substance addictions,” said Yusuf Sherwani, M.D., co-founder and CEO of Quit Genius, in a statement.
In an increasingly uncertain economic environment, value-based care models will become more important to health plans and employers, he said. Employers and health plans spend about $46 billion a year on substance use disorder (SUD) treatment, according to Quit Genius.
"How do you actually move the needle in a meaningful way? It's actually shifting the goalposts on incentives, recognizing that we should be charging less and being held more accountable," Sherwani said.
Moving to a fully at-risk model better aligns incentives and holds the company accountable for achieving meaningful clinical outcomes, he noted.
"One of the consistent points of feedback we've had from our customers is, 'We see what digital health programs can achieve, but we have also seen that many vendors have really over-promised from the policy and cost reduction perspective.' In an uncertain economic environment, we want to reduce the time to value and hold our providers accountable to delivering the service that they're promising," he said.
"It's really just reading the winds of where we think the industry is headed and seeing if we can accelerate that transition," he noted.
"It has always been clear to us that improving access to preventive SUD treatment is not just the right thing for members, but also a responsible business decision and one that will lead to a clear reduction in healthcare costs," he said.
Previously, Quit Genius offered 50% fees at risk, alongside a bundled case rate fee.
Under the new fully at-risk model, if Quit Genius misses performance goals, clients are eligible to receive up to 100% of the total fees paid, according to the company. Performance guarantees are measured annually, but clients also receive quarterly performance updates to measure whether Quit Genius is on track to meet them. Since launching to employers and health plans in 2020, the company has never missed a performance goal, the company claims.
More than 40 million Americans, or about 1 in 6 adults, struggle with an SUD addiction (PDF).
"Only 10% of those people actually treat it and have access to evidence-based treatment, which, of course, means when people get no treatment that actually turns out to be incredibly expensive and constitutes three times more from a healthcare cost perspective," Sherwani said. "People that do get treatment, often what they get, isn't actually ideal and doesn't follow evidence-based practice."
Substance abuse costs the U.S. more than $600 billion annually, and treatment can help reduce these costs. Drug addiction treatment has been shown to reduce associated health and social costs by far more than the cost of the treatment itself.
Quit Genius "rethinks the underlying care delivery model," according to Sherwani, by partnering with enterprise healthcare organizations, including self-funded employers, to offer comprehensive virtual treatments for tobacco, alcohol and opioid addiction across the continuum of care.
"It's a best-in-class digital treatment that combines human-led clinical care alongside remote monitoring, digital cognitive behavioral therapy, support and end-to-end medication management," he said.
Quit Genius executives say the average success rate for people in the Quit Genius tobacco program is 52%, far higher than traditional methods. Members enrolled in the Quit Genius alcohol program have a 62% reduction in alcohol use frequency within the first 30 days of care. And, on average, 51% of members that participate in opioid MAT programs report negative opioid tests after 20 days in the program, the company reports.
"One of the things I saw early on in the healthcare space was how misaligned incentives can actually affect patient outcomes in the very long term," Sherwani said.
"Since the start of Quit Genius, we've been laser-focused on member experience and member outcomes, metrics and we've always had a value-based care component of our program," he said. "That has actually been a huge part of our growth story to date. It's been a big reason why we've seen such a high growth rate because employers and health partners really look to their performance guarantees as being highly aligned with what they're looking for."
Founded in 2017, Quit Genius has raised $78 million from venture capital investors, according to Crunchbase.
The company grew revenue by 10 times in 2021 and now partners with more than 100 employer and health plan clients covering 2.5 million lives. Its head count grew by four times in the past year.
The company has completed nine peer-reviewed studies and a randomized controlled trial demonstrating best-in-class outcomes, executives said.
Other behavioral health and SUD treatment companies have gone all in on value-based care. Addiction and mental health services startup Eleanor Health was designed to use a value-based delivery and payment model for substance abuse treatment delivered on an outpatient basis.
Groups Recover Together, founded in 2014, provides group-based MAT for opioid use disorder, and the company is performance-based rather than private pay for fee-for-service.