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Digital health coach provider Noom shifts model to embrace outcomes-based pricing

By STEPHANIE BAUM

Noom, a digital health business that uses a virtual coach as part of a set of programs to prevent or improve the management of chronic conditions, has changed its business model so that customers only pay when they achieve their goals, according to a news release. It seems a risky move but one Noom views as achievable based on the data the company has collected.

Noom CEO and Cofounder Saeju Jeong said in emailed responses to questions that the company made the change proactively and not because of pushback from Noom’s customer base.

Jeong noted that 84 percent of participants in the company’s diabetes prevention program complete the course, and more than half of them (64 percent) achieve transformational weight loss — 5 percent weight loss or more. For the hypertension program, nearly half of participants (45 percent) improved their blood pressure readings toward a healthier range.

Noom’s previous pricing model involved charging when users hit specific milestones and actions that were predictive of positive health outcomes such as meaningful weight loss and improvements in blood glucose and in blood pressure. The new pricing model removes those milestone charges and zeroes in on user outcomes.

Like many digital health companies, Noom started with a direct-to-consumer model before adding an enterprise model three years ago once it had gathered enough data on users and outcomes.

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