Quit Genius made a full-risk payment model standard for its digital B2B addiction treatment services.
In the past, the New York City-based digital addiction treatment provider tied 50% of its revenue in B2B contracts to performance goals. But now the company is going all in on value-based care and will put 100% of its contract fees at risk going forward.
Quit Genius hopes to woo clients with its dedication to real care outcomes, CEO Dr. Yusuf Sherwani told BHB. The B2B mental health market is becoming more competitive.
“If we don’t hit those goals, we’re going to lose some of our fees, all the way to 100% if we miss all of our goals,” Sherwani said.
Quit Genius piloted the full-risk strategy in the first quarter of 2022 with a handful of “high profile” clients. Sherwani didn’t offer names. Based on that pilot, the company found the full-risk model was a winner.
Quit Genius serves health plans, employers, health systems and individual patients.
“It was a big part of why [they] procured Quit Genius,” Sherwani said. “Then we made the determination that it should become the new standard of care for all of our contracts.”
Founded in 2015, Sherwani said Quit Genius has always had a focus on value-based care. It would even propose value-based care measures when pitching to companies that didn’t specifically require it.
Quit Genius treats alcohol use disorder (AUD), opioid use disorder (OUD) and smoking cessation. It offers a number of self-administered services to track care and well as telehealth services.
So far, the company has not had to payout against its performance guarantees, Sherwani said.
Presently, Quit Genius doesn’t have any additional incentives for using the full risk model. For example, the company doesn’t have a shared savings program with any of its partners.
“That’s not to say that that isn’t on the horizon for us,” Sherwani said.
Going where others won’t
Quit Genius has moved beyond fee-for-services models. These models are typical of the company’s digital health competitors, Sherwani said.
Quit Genius hopes to stand out because it has “real skin in the game,” Sherwani said.
There are good reasons for other companies not going all in on value-based care. Developing companies able to operate in value-based care require a lot of time and risk.
“[Some programs] might be overly focused on medication management but not a holistic picture,” Sherwani said. “That comes at the benefit of revenue and gross margins, but not necessarily actual clinical outcomes.”
He also said it’s “not that difficult to put together a great user interface. … It’s also not that difficult to actually post great engagement metrics.”
What is difficult is generating, tracking and durably improving outcomes. This is Quit Genius’ “true north,” Sherwani said.
Quit Genius sets expectations
Quit Genius requires its business customers to act as reliable collaborators.
The Quit Genius model focuses on use and engagement, rather than covering lives. This requires close engagement on several fronts. Quit Genius and partners must provide data to help identify and track the right goals. Quit Genius also needs partners to help make people aware of Quit Genius’ work.
“Everyone is very well calibrated from the start as to what we are all working towards,” Sherwani said.
Quit Genius sets specific goals for it to hit with employer customers. These include clinical, engagement, operational, satisfaction and performance metrics.
The model appears to be calibrated for success at Quit Genius.
Today, the company partners with over 100 employers and covers 2.5 million people. In the last 18 months, Quit Genius has grown “an order of magnitude higher” than where it was 18 months ago.
Sherwani said Quit Genius has grown 10x in that timeframe. He attributes this growth to “being able to prove the follow through in what we’re initially promising.”
Looking back, Sherwani said he believes that Quit Genius is still at the beginning of its journey. Quit Genius still focuses exclusively on the addiction treatment space. In July, the company raised a $64-million Series B round led by the firms Kinnevik and Atomico.
This is a strategic focus as well as a moral focus.
Quit Genius doesn’t plan to branch into fields with a population focus such as diabetes.
Sherwani pointed to the need to reverse the increasing rate of drug overdose deaths in the United States. An estimated 108,600 Americans died from drug overdoses in the 12 months ending in January, according to CDC data.
“Doing something incredibly well and then integrating with the people who are best in class [in other areas] is a better strategy and exactly what our customers expect us to be able to do,” Sherwani said.
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