UnitedHealth Group may be acquiring another digital health company, this time eying the wellness market and an app already in use by thousands of members at a rival health plan.
The Federal Trade Commission, through its premerger notification program, has granted clearance for United to acquire or make a large investment in the startup Audax Health, a Washington D.C.-based maker of web-based health risk assessment and patient engagement programs.
United is not commenting on the notification, but with its Optum technology subsidiary trying to work across the health ecosystem, the startup could offer the company a bridge to the corporate wellness market, health "gamification" and social media.
Audax's main product, available to Cigna members in a five-year deal inked last year, is a web-based wellness app and platform called Zensey, described as "your guide to healthier living--one small step at a time." The team at the four-year-old startup say they've "reimagined" the experience of health risk assessments and created one that's "dynamic and graphical."
In addition to a questionnaire-based HRA, Zensy (formerly called "Careverge") includes features to let employees or groups of friends compete against each other in exercise challenges such as walking, with the option to offer winning staffers prizes. The company says the website's health forum offers a venue to "find your tribe, and chat freely, because you pick an anonymous username, you can ask those touchy questions in a private, safe space."
Tapping into the quantified-self movement, Audax partners with the companies BodyMedia, FitBit, Polar and Withins to offer employees in its customers' wellness programs wearable devices that can track exercise, diet and more. The company itself tries to walk the wellness walk, recently hosting a walking challenge called "Hustle on the Hill" at its D.C. office and "Battle by the Bay" at its other location in San Francisco. The winning employees each posted more than 31 miles in three days.
If United does end up buying Audax, it would make the founder one of the youngest success stories in American healthcare entrepreneurship.
The CEO, 25-year-old Grant Verstandig, started the company after suffering a number of injuries as a lacrosse player at Brown University and receiving seven knee surgeries and a partial knee replacement.
Unwilling to accept his doctor's prognosis that he'd never play again, he scoured the internet for evidence from other athletes, but found the experience lacking and thought he might be able to change it if he became an entrepreneur.
Even if he never played lacrosse again, Verstandig could have had a promising career in research. He interned with the National Cancer Institute in high school and was studying neurobiology at Brown, but dropped out to found Audax in 2010. He's since managed to garner more than $55 million in backing from Florida Blue subsidiary Navigy Holdings, New Leaf Ventures, Cardinal Health, Cigna and former Aetna and Apple executives.
In January 2013, Cigna announced a five-year "strategic alliance" with Audax to develop a customized digital engagement platform. Cigna CIO Mark Boxer also took a place on the Audax's board. "The power of Audax Health is that digital personalization, social networking, gamification and analytics can turn a mundane or onerous task into something positive, fun and rewarding," Boxer said at the time.
The startup's board chairman is Richard Klausner, MD, the CMO at Illumina -- a company that seems to have the first technology able to sequence a human genome for $1,000 -- and until recently a managing partner at the Column Group, biotech-focused venture firm.
Audax has several UnitedHealth connections in its leadership and staff.
Its chief customer solutions officer, Brian Dolan, is an insurance industry veteran who worked as business development senior vice president in United's group insurance unit when it was called Uniprise, and more recently was customer solutions officer for Active Health Management, a population health company acquired by Aetna in 2005.
Phil Harker, Audax's senior vice president of client development, spent 10 years with United's Optum, going back to when it was called Ingenix, in risk management and payer services. And until recently, Dogu Celebi, MD, a clinical epidemiologist who worked as CMO at OptumInsight, was Audax's informatics senior vice president for about a year. He's now head of product and market strategy at the Boston-based chronic care support startup Wellframe.