Mountain View, California-based chronic disease management company Livongo Health has made a major play in behavioral health with the purchase of Denver, Colorado-based myStrength to bolster the offerings on its chronic care platform.

The reasons behind chronic care companies moving into behavioral health conditions is somewhat self-evident. There are long established relationships between behavioral health conditions like depression and anxiety and chronic conditions like diabetes and hypertension.

In fact, of the roughly 135 million people in the country with at least one chronic condition, around 20 million also are dealing with a behavioral health issue.

There’s also a business rationale: Leading companies in digital health increasingly take on a platform approach to appeal to employer and health system customers overwhelmed by the variety and volume of point solutions on the market.

To that end, Livongo purchases Retrofit last year, a Chicago-based startup that provides weight-management and disease-prevention programs. The new acquisition is the next step in the greater industry consolidation.

“Health care is getting more confusing and more complex and more costly all the time,” Livongo Health Executive Chairman Glen Tullman said in a phone interview.”

“(Our customers) say ‘we wanted innovation but I don’t want to deal with 20 different companies and have each go through my security, contracting, legal and privacy requirements. It’s a hassle. Can’t you just have one company that makes it easy for us?”

Denver, Colorado-based myStrength offers mobile and web-based resources and therapies to address conditions such as depression, anxiety, insomnia, substance use and stress with techniques like mindfulness and cognitive behavioral therapy.

Tullman said the decision to acquire myStrength came after a year long process to survey the space and identify the best candidate to bring on board. Key to the decision, according to Tullman, was myStrength’s strong clinical evidence base, high customer satisfaction and existing traction with more than 130 health plans and health systems across the country.

While Tullman refused to disclose the exact financial terms of the acquisition, he characterized the deals as in the tens of millions.

The myStrength news comes fresh off the heels of competitor Omada Health’s effort to add on similar services using technology developed by failed behavioral health startup Lantern.

Earlier this month, the San Francisco, California-based company announced that it would be launching new programs for depression and anxiety utilizing technology produced by defunct startup Lantern, which announced it was shutting down commercial operations last year after failing to find a viable revenue model.

“If you go to Lantern’s site right now it literally says ‘we failed,’” Tullman said. “That’s their entry. Compare that to our entry which has 135 partners using it, multiple years in business and provable results and you say to yourself ‘well, one of these companies is serious.’

In terms of venture capital investment, the company is ahead of its rivals. Since its founding in 2014, Livongo has raised around $240 million from investors including Kleiner Perkins, Echo Health Ventures, and Tullman’s own firm, 7wire Ventures.

The acquisition comes in what looks to be a period of rapid growth at Livongo, which recently brought on former Cerner President Zane Burke as CEO to help the company scale to its next stage. Tullman said in January alone, Livongo brought on board 250 new customers, adding to a roster that includes blue chip companies like Lowe’s, Target and Delta.

“This move will now allow us to focus on both the physical and behavioral health of our members and strengths our ability to bring our clients a broader, more personalized offering,” myStrength CEO Scott Cousino said in a statement.

Existing myStrength customers will continue receiving uninterrupted service and Livongo users will be offered the option to tack on additional behavioral health functionality as part of the Livongo software app.

“So all of a sudden without changing their app, without getting a new device, without any of that, they can get access to behavioral health,” Tullman said.

Alongside the incorporation of myStrength’s capabilities and the addition of the company’s nearly 50 employees, Livongo has also added two key executives with long histories in the mental health space to bolster its impact in the space.

Anmol Madan, the former CEO and co-founder of behavioral health startup Ginger.io has joined Livongo as its chief data officer. Julia Hoffman, who previously served as the national director of mental health services for the VA, has also joined Livongo as its vice president of behavioral health strategy.

Picture: Radachynskyi, Getty Images



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