These Two Founders In Recovery Raised $118 Million For Their Virtual Addiction Treatment Startup
Workit Health cofounders and co-CEOs Lisa McLaughlin (L) and Robin McIntosh (R).
At 18 years old, Robin McIntosh was struggling with both alcohol and an eating disorder. When she entered rehab, she was forced to choose which issue to work on — the $45,000 inpatient treatment was an either-or proposition. “I worked for 45 days on my eating disorder, left, and drank on the plane on the way home,” she recalls. Eighteen years later, McIntosh is building the type of comprehensive treatment program she wishes she’d had. Workit Health, the Ann Arbor, Michigan-based company she cofounded in 2015 with Lisa McLaughlin, focuses on treating not just individual substance use disorders but all of the co-occurring issues. “We don’t know anybody that really only has one diagnosis,” says McIntosh, 36.
Work it was providing virtual behavioral health services long before the Covid-19 pandemic thrust online therapy into the national spotlight. Rather than focus on the abstinence-based approach of the traditional 12-step programs, the startup combines online individual and group therapy along with medication-assisted treatment (like buprenorphine and naltrexone). Workit also offers what the co-CEOs refer to as “precision learning” — thousands of online courses the company developed to augment treatment and help patients tackle topics ranging from social isolation to relationship stress. The goal is to use a virtual approach to reach the 9 out of 10 Americans with a substance use disorder who don’t seek treatment because of issues of access or affordability or stigma. “If we’re looking at an iceberg, we’re reaching all the people under the water that have never been reached before,” says McLaughlin. “It’s pretty game changing.”
The approach and the opportunity to help treat the more than 20 million Americans with alcohol and opioid use disorders (not counting gambling, smoking and other addictions that Workit offers to help) has garnered investment from top tier firms. On Thursday Workit announced a $118 million Series C led by Insight Partners ($90 million in equity and the remainder in debt). CVS Health Ventures, FirstMark Capital, BCBS Venture Fund and 3L Capital also participated in the round, which values Workit at around $500 million, according to a person familiar with the deal. The company has raised $140 million in equity to date.
More than 20,000 people have gotten treatment via Workit and the company has contracts with over 230 health plans, which helps solve one of the biggest hindrances to people seeking care: affordability. Even though health insurers are supposed to cover mental health services the same way as physical care, the high price tag of inpatient rehab means patients and providers confront obstacles and red tape when it comes to reimbursement, prior authorization and length of stay. The company says the average yearly cost for a workit patient is around $4,200 and it has around 6,000 active members. Workit’s internal data shows more than 84% of members staying in the program longer than 30 days with 41% receiving treatment for more than a year. The majority of Workit’s members are on Medicare or Medicaid, while around 30% have commercial insurance. Grant funding helps cover some underinsured and uninsured patients.
“It’s really amazing what their product can accomplish,” says Nicole Shimer, a vice president at Insight who joined Workit’s board, in terms of being a win for both patients and health insurers. “Folks with substance use disorder are often some of the more expensive patients for [health] plans to cover and just being in treatment is shown to dramatically lower the overall cost of that patient to the plan. Plans can provide better treatments and also save a lot of money while doing so. It really benefits both sides of the equation.”
One of the biggest differences Workit has from traditional programs is caring for the whole person, rather than just the addiction.
McIntosh met McLaughlin the first day she arrived as a Bay Area transplant in 2009 at a local Alcoholics Anonymous meeting. She worked as a design and creative director, while McLaughlin was in educational technology. Both had attended undergrads at the University of Michigan but in different years. “We’ve always had a strong connection around getting sober, getting into recovery really young, staying in recovery, committing to that path,” says McIntosh. “And then trying to help others along the way.”
While their own recovery pathways were rooted in the 12-step program, the pair also recognized the growing body of research supporting the use of medication, like naltrexone and the anti-anxiety and depression medications known as SSRIs, alongside peer support and therapy. Workit also uses an evidence-based approach called motivational interviewing, which involves “talking to someone about how much they’re using now, how much they’d like to be using, and what are the near term steps for getting there,” McLaughlin . “And sometimes that didn’t look like quitting.”
One of the biggest differences Workit has from traditional programs is caring for the whole person, rather than just the addiction. For example, workit has primary care physicians on staff so patients can receive medication not only for substance use disorder but also to fill prescriptions for issues like hepatitis, the liver inflammation that can be caused by excessive drinking or sharing syringes, or the HIV prevention medication known as PREP.
But one of the most important lessons McIntosh and McLaughlin took from the existing recovery system was the need for a local presence. “It is a delicate balance between having a national footprint, which we’re aggressively building towards, and ensuring that every market that we’re in has local representation,” says McLaughlin. This means directly hiring doctors, nurse practitioners and social workers in the 10 states the company currently operates in. While care is delivered virtually, workit members also have physical clinics to go to. The latest funding round will mainly go towards rapidly scaling up that geographic expansion with the plan of “opening a state a month in 2022 until we’re national,” says McIntosh.
The duo acknowledge neither of them have the traditional Silicon Valley pedigree of an Ivy League or business school degree of many digital health founders. But they had one major advantage that can’t be networked: personal experience in addiction treatment and recovery. “Although it took us a lot longer, I think the money found us, if that makes sense,” says McIntosh. The name Workit stems from a common recovery catchphrase: “It works if you work it.” The idea being that “if you put in the work recovery is available for anyone,” she explains. “Our job is to make sure whatever pathway you’re looking for, you can get to where you’re trying to go.”