A startup for diabetes patients rolls out a new model: Insurers only pay if the service works

SAN FRANCISCO — An ambitious startup that uses digital coaching and monitoring to try to help patients reverse type 2 diabetes, is making a big change to the way it makes money: Insurers and employers will now only pay Virta if its service works.

Under Virta Health‘s new business model, announced on Wednesday, a health plan or employer will pay Virta a fee only if the patient is sufficiently engaged with its program after one month. The second payment comes after a year, only if patients lower their A1C, a measure of glucose in the blood, to a certain level determined on a case-by-case basis.

“If we don’t deliver results, and make our patients healthier and in most cases reverse their type 2 diabetes, we don’t get paid,” Virta CEO and co-founder Sami Inkinen said in a phone interview with STAT. “Literally, we can enroll a patient, and get paid $0, on an individual patient level.”