January 19, 2023
Happy Friday Eve, Health Tech readers.
1 big thing: Knownwell debuts obesity medicine-focused primary care
Knownwell wants to change the way primary care providers treat people with obesity, starting with removing the stigma linked with the disease.
Why it matters: The Boston-based hybrid care company just collected $4.5 million in a seed round led by Flare Capital Partners, Knownwell CEO Brooke Boyarsky Pratt tells Erin exclusively.
Details: Additional backers include Flybridge LTV Operator Fund, Oxeon, Larry Summers, Mirror's Brynn Putnam, Dia & Co's Lydia Gilbert and Nurx's Varsha Rao.
What's next: Knownwell will use the funds to complete construction of its first clinic in Needham, Massachusetts, and to hire physicians and non-physician practitioners.
- The company plans to raise its Series A in 12 to 18 months, Boyarsky Pratt says.
What they're saying: One of Knownwell's core differentiators is its longitudinal approach to improving patients' health, whether or not that includes weight loss, the company's leaders and investors tell Axios.
- "If you look at obesity treatment options today, many treat it either like an episodic condition or a lifestyle," Boyarsky Pratt says. "It's a chronic disease that should be in a system that pulls together primary care and metabolic health."
How it works: Starting with its Needham clinic, Knownwell will provide in-person and virtual primary care and metabolic health services including obesity treatment, nutrition counseling, psychotherapy, stress and sleep management, and prescription medications.
- The company will accept all major insurance, will charge no membership fee and will partner with health systems that refer patients to its services, Boyarsky Pratt says.
- "Massachusetts is ahead of the curve when it comes to obesity medicine, and our services will be covered by Medicaid here, which is really important," she adds.
Yes, but: One challenge facing Knownwell is the reimbursement landscape for obesity medicine, which varies significantly by state.
- Traditional forms of Medicare generally cover screenings and counseling services (if performed by a primary care provider) and surgery, per a 2022 Urban Institute report.
- It covers weight loss programs only when prescribed as treatments for a particular disease, such as diabetes.
- Under the Affordable Care Act, commercial insurers are required to cover only screenings and counseling, the report found.
State of play: In the metabolic digital health sector, diabetes-focused heavyweights such as Omada Health and Virta Health have pulled in a collective $815 million over their lifetimes. Other firms focused on weight management have also cropped up in recent years:
- Instacart co-founder Apoorva Mehta in November raised $30 million for medical consulting venture Cloud Health Systems, whose initial focus areas include metabolic health and obesity under brand Sunrise.
- Digital weight loss service Noom in 2021 collected $540 million in Series F funding.
- Virtual weight loss provider Calibrate in 2021 pulled in $100 million in a Series B round.
- Weight management platform operator Found in 2021 raised $100 million in Series B capital at a $600 million valuation.
The backstory: Boyarsky Pratt first experienced obesity stigma at the doctor's office at age 10, and it has recurred throughout adulthood: She would visit the doctor with a primary concern, such as a sinus infection, and be told to eat less and exercise more.
- "It's the most stigmatizing experience," Boyarsky Pratt says. "We need to treat obesity like the disease it really is."
The bottom line: "On the advocacy side, we just need to do better as a country," Flare Capital partner Ian Chiang says.