Omada Health has scooped up digital health company Physera for a reported $30 million.

The deal adds virtual musculoskeletal care to Omada Health’s services.

Physera, launched in 2015, specializes in virtual physical therapy for muscle and joint pain and delivers interventions digitally and via telehealth.

Omada raised an additional round of growth capital from Perceptive Advisors, a life sciences investment firm, to finance the deal and support future company growth with the availability of $57 million, CEO Sean Duffy told FierceHealthcare.

CNBC’s Chrissy Farr reported that $30 million was used for the acquisition, citing a person familiar with the deal.

Duffy declined to disclose the terms of the deal.

Omada Health offers a digital care and coaching program for managing chronic disease, with a specific focus on diabetes prevention, Type 2 diabetes management, hypertension, behavioral health and now musculoskeletal issues.

Through the deal, Omada adds Physera’s musculoskeletal services to its digital care programs, which include video access to a nationwide network of licensed physical therapists for diagnosis and treatment. Physera also developed in-application animations, voice prompts, digital exercise therapy and other guidance designed to help patients reduce musculoskeletal pain.

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Physera and Omada Health both work with health plans and employers.

Employers have been persistently asking for a digital health solution that addresses musculoskeletal health, Duffy said.

The company also felt that Physera aligned with Omada’s philosophy to design software and technology around licensed professionals to amplify what they can do, he said. “What we call digital care made human,” he added.

The acquisition of Physera broadens Omada’s portfolio while extending a focus on depth of care and clinical rigor, according to the company.

Omada said it will begin offering the musculoskeletal program immediately.

Duffy also said he believed the timing was right for the acquisition amid the COVID-19 pandemic.

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Over the last three months, as the health crisis has necessitated shelter-in-place orders across the country, telehealth visits for chronic care, physical therapy, mental health and other care needs have surged. 

“There is a time where people aren’t very keen to walk into an in-person physical therapy clinic,” he said, noting that Physera offers a “PT clinic in the cloud.”

“The dam is cracked on digital care. We have never had a moment in the U.S. healthcare system like this where every single person is reflecting on, ‘Do I need to walk into an office or can I get care from afar?'” he said.

Integrating a digital physical therapy solution better equips Omada to meet the pressing needs of the current moment and accelerates the company’s progression toward a fully integrated care experience, Duffy said. 

According to Physera, its virtual services help reduce downstream healthcare costs by preempting avoidable treatments and procedures including prescriptions for opioids, specialist visits, imaging and surgery. 

“Omada has been a pioneer in developing evidence-based, clinically rigorous programs that deliver real-world results,” said Dan Rubinstein, CEO of Physera, in a statement.

RELATED: COVID-19 is changing everything. Here’s what that means for diabetes

Several startups have developed digital tools for musculoskeletal health issues, including back pain. Hinge Health offers a digital platform that uses wearable sensors and one-on-one health coaching to deliver in-home musculoskeletal therapy. 

Risalto Health uses artificial intelligence to help users find musculoskeletal health providers, and the company’s app acts as a digital concierge to help connect patients with appropriate care for their condition. Kaia Health is a digital therapeutics company that developed an app using AI and motion-tracking technology to treat a range of disorders, including back pain.

More than half of Americans report a chronic musculoskeletal condition in any given year, and nearly 1 in 5 healthcare visits are for a musculoskeletal issue. Total spending on musculoskeletal conditions in the U.S. exceeds $200 billion annually, with an average cost of $7,800 per person.

More than 75% of patients with Type 2 diabetes or obesity report having at least one joint mobility issue, making Physera’s musculoskeletal capabilities a natural addition to Omada’s chronic disease program, the company said.



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