The pandemic led to the rapid acceleration in the adoption of telehealth services. In February of this year, there were 38x more outpatient virtual visits compared to February of 2020. Now the landscape is poised to expand on the earliest iterations and specialized care is one of the primary avenues. Oshi Health is a virtual-first care platform targeted for those with gastrointestinal (GI) conditions. Users of the platform have access to a suite of professionals including licensed gastroenterologists, practitioners, mental health professionals, dieticians, and health coaches. Under the unified care plan, patients that require in-person services are connected with a network of pre-vetted providers. Those with newly diagnosed chronic conditions can work hand-in-hand with experts to understand the impact of triggering behaviors in real-time; something that’s just not possible when you need to schedule an appointment and see someone in person. Oshi works directly with employers and health plans to offer their services to employees and members, ultimately leading to long-term savings and improved patient outcomes.
AlleyWatch caught up with Oshi Health CEO Sam Holliday to learn more about how Oshi is bringing much-needed care to those with GI conditions, the company’s strategic plans, latest round of funding, and much, much more.
Who were your investors and how much did you raise?
This was a Series A for $23M. Flare Capital Partners, Bessemer Venture Partners, and Frist Cressey Ventures co-led the round with a strategic investment from CVS Health Ventures. Takeda Digital Ventures, which has funded the company since its inception, participated in the round along with several noteworthy health industry veterans, including author and Athena Health Cofounder Jonathan Bush, Nat Turner and Zach Weinberg of Operator Partners and Flatiron Health, serial healthcare entrepreneur and IBD patient advocate Eric M. Stone, and Russell Glass, the CEO of Headspace Health.
Tell us about the product or service that Oshi Health offers.
Oshi Health has completely redesigned GI care delivery with our integrated, virtual-first model to address two core tenets: increasing access to the care that solves the patients’ needs and lowering the total cost of care for patients and purchasers.
Oshi Health surrounds each member with a personalized integrated care team, working together from a unified care plan. Members work with gastroenterologists, nurse practitioners, mental health professionals, and dietitians – all assisted by health coaches that support lifestyle change and care plan compliance. All care is delivered via telehealth and we coordinate any required in-person care with local, high-quality, cost-effective providers.
We support people living with confirmed GI conditions such as inflammatory bowel diseases (IBD) like Crohn’s or Ulcerative Colitis, irritable bowel syndrome (IBS), Chronic Constipation or Diarrhea, GERD (acid reflux), etc. We also help diagnose people experiencing chronic GI symptoms such as constipation, abdominal pain, bloating, diarrhea or acid reflux and identify the appropriate whole-person treatment plan.
Our care delivers significant reductions in unnecessary procedures (colonoscopy, endoscopy), reduces reliance on high-cost medication use, and avoids symptom escalations that often lead to emergency room visits and expensive acute care diagnostics. This whole-person, proactive approach lowers the total cost of care and improves outcomes, while our close alignment with employers and payers ensures that patients do not bear the brunt of these expenses.
What inspired the start of Oshi Health?
My first exposure to the struggles caused by gastrointestinal conditions was through family members. I saw firsthand what they faced interacting with GI providers, what they had to figure out on their own with little support, and how the current system can fail people. This collided with my experience working in diabetes and seeing how new virtual care options were transforming that space. I saw the opportunity for redesigned, virtual-first GI care to better solve the needs of people like his family members.
From an industry perspective, GI is a massive and woefully underserved patient population, and a category marked by enormous avoidable spending and unsatisfactory care. Payers are seeing GI as a top-three specialty care cost category, and employers continue to pay more each year for GI care with little evidence of improved outcomes.
The root cause of these gaps is the healthcare industry’s traditional payment model. While we know that dietary and psychological interventions deliver great patient outcomes, they are too difficult for patients to execute alone and instead require an investment of time and resources from specialized clinicians that is not covered or encouraged by providers. The current fee-for-service reimbursement system incentivizes GI clinics to perform procedures like colonoscopies and endoscopies rather than invest in proven dietary and psychosocial support. This leaves patients wanting these services, unable to find them at GI clinics, and forced to source and pay for their own specialized providers.
How is Oshi Health different?
Oshi Health’s whole-person, virtual-first model and emphasis on proactive interventions is a transformational change from the reactive approach used in traditional medicine. Our unified care team includes dieticians, mental health professionals, GI experts, and more to help patients gain control over symptoms and avoid expensive, unnecessary tests and over-prescribed medicines.
At the same time, Oshi Health’s ability to diagnose and treat patients is fundamentally different from the handful of digital solutions that can only provide GI education and symptom tracking. We see a significant population that has never been diagnosed but struggled for years with chronic debilitating symptoms. We’re even seeing patients coming to us with a preliminary diagnosis, but still searching for answers about what triggers symptoms and how to manage their condition when medications alone are not working. Our ability to get those patients a diagnosis is unique, as is our ability to treat them using the right mix of dietary, psychosocial, and medication interventions.
What market does Oshi Health target and how big is it?
Gastrointestinal conditions affect tens of millions of Americans. One in five working-age adults suffers from a diagnosed GI condition, and many more living with undiagnosed or untreated illness. GI care in the U.S. costs more than $136 billion dollars per year. Even worse, the onset of chronic GI symptoms is usually at a relatively young age — in the 20’s and 30’s — closing a person’s world at a time when they should be most active. And because it is a “silent” epidemic with many people too embarrassed to seek health or properly classify their issues, many cases go unreported. All of this creates an enormous burden on patients and leads to loss of productivity and escalating medical costs for employers. This is worsened by an outdated fee-for-service medical system that leans towards expensive testing, does not provide proven dietary and psychological interventions, and that over-prescribes medications that often don’t solve the problem.
Gastrointestinal conditions affect tens of millions of Americans. One in five working-age adults suffers from a diagnosed GI condition, and many more living with undiagnosed or untreated illness. GI care in the U.S. costs more than $136 billion dollars per year. Even worse, the onset of chronic GI symptoms is usually at a relatively young age — in the 20’s and 30’s — closing a person’s world at a time when they should be most active. And because it is a “silent” epidemic with many people too embarrassed to seek health or properly classify their issues, many cases go unreported. All of this creates an enormous burden on patients and leads to loss of productivity and escalating medical costs for employers. This is worsened by an outdated fee-for-service medical system that leans towards expensive testing, does not provide proven dietary and psychological interventions, and that over-prescribes medications that often don’t solve the problem.
What’s your business model?
Our ‘customer’ is the employer or health plan that takes responsibility for funding care for a population. They’re the ones who have been seeing the financial impact of poorly managed chronic gastrointestinal health – increasingly realizing that GI is one of the most expensive specialties. For them, we’re a win-win-win: Improve people’s quality of life and workplace productivity, lower overall costs and avoid urgent care escalations. We’re also a perfect fit alongside progressive benefits like virtual primary care, digital mental health offerings, virtual diabetes care, and women’s health programs.
What are your post-COVID office plans?
We always planned to have much of our staff working remotely from home and are now considering the right mix of remote and in-person work given our expansion plans and ensuring we get the best possible talent to achieve our mission. We expect to have one or more offices in the coming years, including one in NYC, but have not yet formalized these plans or determine how often our team members will work in person.
What was the funding process like?
We had been building relationships with leading healthcare-focused VCs since we launched Oshi Health, which really helped us when it was time to raise this Series A. It also helped that virtual care has become such a critical component of the future of healthcare and we have a unique opportunity to be the first in a high cost and underserved specialty with gastroenterology. It took a few months for everything to come together, but we are very thankful for the confidence and excitement of the investors that are backing us and we ended up with a very oversubscribed round.
What are the biggest challenges that you faced while raising capital?
One challenge is that gastrointestinal conditions have not received as much focus, because they are often hidden and obscured when employers and payers look at claims data. It can take years for people to get a diagnosis so that their healthcare cost is attributed to their GI condition(s). Many people give up on finding care for their symptoms and conditions because the experience has not been good and prior attempts to see providers have not solved their needs, which means they stop showing up in the claims data until things escalate and land them in the emergency room. And even that ER visit often isn’t coded in a way that relates it to a GI condition. Yet, once we started showing the market and investors the real picture of this population and its cost, we got a lot of interest and excitement for our care model and the potential to truly transform this specialty.
What factors about your business led your investors to write the check?
We believe this funding and the backing by a stellar group of investors is a spotlight on the need for better gastrointestinal care. It’s been an enormous area of spend defined by an unsatisfactory care experience for far too long. We’re excited to show the world a new version of GI care that is a great experience, improves outcomes and quality of life, and reduces the total cost of care for patients and purchasers.
What are the milestones you plan to achieve in the next six months?
We’ve shared publicly that we’re working with a national payer and we have several additional customers launching in the coming months. We have worked with hundreds of patients since launching less than a year ago and have seen very strong satisfaction and early outcomes. The exciting thing about this funding is that it brings together a tremendous group of investors who are aligned behind our approach, energized by our early results and ready to help scale our care across the country. We expect to reveal new partners and share our early results over the coming months.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Be bold. Stay focused on your mission that solves a big problem and aim to do the hard things that others are afraid to try. This is what creates big, compelling opportunities that attract early employees, customers, investors, and partners. Have a learning and growth mindset and constantly iterate your story, positioning, and business model until it clicks. Then network to find the investors that will see your vision and the big opportunity and want to be part of your mission.
Be bold. Stay focused on your mission that solves a big problem and aim to do the hard things that others are afraid to try. This is what creates big, compelling opportunities that attract early employees, customers, investors, and partners. Have a learning and growth mindset and constantly iterate your story, positioning, and business model until it clicks. Then network to find the investors that will see your vision and the big opportunity and want to be part of your mission.
Where do you see the company going now over the near term?
The Series A funding will help us gain new employer & payer coverage so that we can reach and help more people suffering in silence with GI conditions around the country. We will continue investing in our clinical team and technology platform, to give the best information and tools to our members and clinicians to achieve great outcomes with an equally great experience.
What’s your favorite outdoor dining restaurant in NYC
My amazing wife enjoys cooking and makes us great home-cooked meals. That, combined with busy work schedules and our kids schedules, means we don’t often get out to eat, so it’s hard to pick one!
