Virta Health has a bolder mission than most health-care companies. Rather than encouraging customers to follow their drug regimen, it aims to reverse chronic disease through lifestyle change — and ultimately to wean its users off their medications entirely.
Virta CEO Sami Inkinen initially had no intention of getting into health care. In 2014 his former company, Trulia, merged with Zillow in a $3.5 billion deal, which left him with a personal fortune. He wasn't planning on starting another company, let alone a virtual medical clinic, but he had a personal experience with health care that prompted him to get involved in the space.
In 2012, after some routine health tests, Inkinen was told that he was at high risk for diabetes. He was shocked. He was young and had regularly competed in Ironman competitions and triathlons. His doctors chalked it up to a combination of genetics and his high-carbohydrate, low-fat diet.
Disillusioned with the usual advice to lose weight, eat less, and exercise more (none were really applicable to him), he decided to do his own research and connected with UC Davis' Stephen Phinney and Jeff Volek, experts on the science of carbohydrate restriction and metabolic health. Together they launched Virta Health in 2014, which earned the No. 29 spot on the 2019 CNBC Disruptor 50 list.
Inkinen learned a lot about a nutritional regimen known as the ketogenic diet. The goal of ketogenic diets, which have become increasingly popular over the years, is to get the body to a state called ketosis, which requires keeping carbohydrates to less than 5% of daily caloric intake.
To test the theory, Inkinen and his wife, Meredith Loring, decided to row more than 2,000 miles together across the Pacific Ocean from Monterey, California, to Hawaii, while on a low-carb regimen. The trip took 45 days, and the pair ended up breaking a world speed record. While on the row, Inkinen primarily consumed veggies and protein, along with a slathering of fat with every meal, while nixing things like high-sugar energy bars and carbonated drinks.
"I did it because I was frustrated that people weren't aware of sugar as a contributor to health problems," he told CNBC.
Virta Health, which is now backed by more than $80 million in funding, offers virtual medical clinics for people with Type 2 diabetes to guide them to change their behavior and ultimately reduce their dependence on insulin. The Virta program involves helping users move from a diet that's rich in carbs to one that's rich in healthy fats, like butter and cheese.
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More than 100 million Americans suffer from diabetes and pre-diabetes, according to the Centers for Disease Control and Prevention. And 90% to 95% of those with diabetes have Type 2.
Virta's goal is to reverse disease in its target population, which includes more than 20 million people in the U.S. alone. That's a challenging business model, given that pharmaceutical companies reap billions in sales of diabetes drugs, including insulin.
But Virta has found success in convincing some health plans and employers to support its efforts, particularly after it shifted to a model in November of 2018 where Virta gets paid only if it can prove that it helps people's overall health and therefore lowers health-care costs. According to the American Diabetes Association, diagnosed diabetes costs the U.S. health-care system $327 billion per year.
Dr. Robert Ratner, former chief medical officer of the American Diabetes Association, recently noted that this kind of model is rare in the health-care industry, "where maximizing profits has historically driven costs."
One participant in the program is Kevin Swier, who's in his mid-50s and works as a pricing analyst for the restaurant supplier US Foods. Swier had been diagnosed with Type 2 diabetes, and he had been told by his doctors that he'd remain on a battery of medications for the rest of his life.
Then he received an email from his employer about the plan. Swier was skeptical, but he enrolled in the program, which his company paid for, to prove to himself that it wouldn't work.
Within four days he started to see results. His Virta-appointed physician reviewed his blood work and started slowly weaning him off insulin. Within a few months he was less reliant on his other medications. He also lost more than 40 pounds from adhering to the diet.
"Right now I'm saving between $400 and $500 in out-of-pocket fees for all these medications I was taking," said Swier.
Swier said a typical meal for him was a 12-ounce steak with a baked potato and a small portion of veggies. Now, as advised by his Virta health coach, he'll eat a far smaller portion of meat, heaped with butter, and several servings of vegetables.
Patients like Swier are huge proponents of the company's approach. But some health experts have questioned whether it's a sustainable program, particularly for low-income Americans who don't have reliable access to healthy food options. Yumin Choi, a health investor from Bain Capital, notes that it'll be a challenge to maintain engagement in the program. "It's a big change to people's lifestyles, and it's strict," he said.
Inkinen said the company is hoping to address that by publishing clinical-trial data to show that patients can stay on the Virta program for months and that most can be taken off insulin in 60 days if they stick with it. According to Inkinen, most patients can manage on their own after about two years.
The company reports that it has seen a sustained reversal in Type 2 diabetes in 60% of the patients who completed the treatment in one year.
The majority of patients will be covered by insurance, but there's also an out-of-pocket option for a few hundred dollars per month.
For Swier it's become easy enough for him to follow Virta's guidelines. There's no requirement around exercise, and he's learned how to order keto-friendly options at his favorite restaurants in Chicago, where he lives.
"I had some misconceptions about what was best for me to eat and not eat," he said. "Once I learned, I got a big part of my life back."