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In this weekly series, CNBC takes a look at companies that made the inaugural Disruptor 50 list, 10 years later.
In 2010, Grant Verstandig founded Audax Health with a vision of putting more power in the hands of the health-care consumer and creating a digital interface to encourage and incentivize better health behaviors.
Like many entrepreneurs, Verstandig was inspired by personal experience, and frustration, with the health industry — a knee injury from his career as a college athlete had led to multiple surgeries. And he had some influential backers with deep experience in the health and consumer industries, including former Aetna CEO Jack Rowe and former Apple and PepsiCo president CEO Jack Sculley. Partnerships with big insurers, including Cigna, and consumer wearable companies, including Fitbit, spoke to the promise that a new era of digital health-care could result not only in better health outcomes, but lower costs for a national health-care sector that Warren Buffett has referred to as a “tapeworm” on the economy.
“All of health care has been built around the transaction model, but the reality is if we can find ways to engage people earlier, everyone can win from that,” Verstandig told CNBC in 2013.
Insurers were able to roll out digital tools through employers and Audax Health get paid for subscriptions on a per member basis in a business model that the founder told CNBC was, “threatening in some cases the same people we are working with.”
This disruptive theme led to Audax Health making the inaugural CNBC Disruptor 50 list in 2013.
The business was strong, and Verstandig believed an IPO was likely in the future for the company because being acquired by one of the existing stakeholders, in his view at that time, might compromise its level of trust among consumers. But a year later, the health-care industry had seen enough to decide it needed to lean into this idea and make it work within the existing business model: UnitedHealth acquired a majority stake in Audax Health in 2014, and Verstandig became chief digital officer at the major health insurance company, a position he only left in the fourth quarter of 2021. During his time at UnitedHealth, Audax was rolled up into a brand called Rally Health, a digital business wholly acquired by UnitedHealth in 2017.
Today, UnitedHealth has a major technology arm known as Optum, pushing all of its efforts forward at the intersection of technology and health, and while the Rally brand still exists, the evolution of digital health efforts has changed in important ways.
“The integration of Audax into Optum’s digital platform, which now serves more than 127 million people, continues to help us deliver new solutions that can make health care more precise, more effective and more equitable,” Phil McKoy, Optum’s chief information officer, said in an email statement to CNBC.
The field of digital health is consolidating, in moves that include other previous CNBC Disruptor…
Read More: Where one of UnitedHealth’s first tech start-up acquisitions is today