Fortune Article

Hello and happy hump day, readers!

Digital diabetes platforms have been among the biggest beneficiaries—and practical success stories—of the digital health revolution, as we’ve covered on a number of occasions. Now, one of the major players in the space, Virta Health, is really putting its money where its mouth is, tying financial reimbursements directly to whether or not its all-digital diabetes prevention and reversal system actually works.

“Under Virta Health’s new payment structure, employers and health plans pay an enrollment fee only after an engagement milestone is met, ensuring patients stay active during the critical early stages of treatment. After that, every dollar, and the majority of overall payment, is at risk and tied to health improvement based on diabetes reversal metrics such as HbA1c reduction—without per-member per-month payment or implementation fees,” said the company in a statement.

Virta’s system involves a series of connected biometric data-collection devices that funnel data to medical experts who can provide advice on diet and lifestyle choices to customers in real time. That’s not a rare strategy in this particular space; but what makes it impressive, Virta CEO Sami Inkinen tells Fortune in a phone interview, is that this purely digital approach (which doesn’t involve surgery or medication) has shown the ability to actually reverse type 2 diabetes. And that’s what gives the company the confidence to pursue this “value-based” strategy.

“What has changed for us is two things,” says Inkinen. “We’ve now replicated our clinical trial results across different populations across the country and shown that we can reverse type 2 diabetes in multiple populations. And, two, while traditional diabetes management increases costs, we’ve now been able to show we can do better while eliminating the need for medication.” That is, Virta believes that fee-for-value will effectively set it apart from fee-for-service.

While Virta’s current service mostly focuses on employer health plans, the company would like to expand further into publicly financed programs.

Read on for the day’s news.

Sy Mukherjee

@the_sy_guy

sayak.mukherjee@fortune.com

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