Hinge Health, a telehealth startup focused on providing care for back and joint pain, raised $600 million in new financing, the company announced Thursday.
The latest haul boosts its valuation to $6.2 billion, making it one of the most valuable digital health businesses. Tiger Global and Coatue Management led the Series E funding round, while Alkeon Capital Management and Whale Rock Capital Management bought $200 million in existing equity. The company will use the new money to expand its operations.
“In 2021, Hinge Health more than doubled its customer base year over year,” the company said in a news release.
Eighty percent of employers and 90% of health plans with a digital musculoskeletal solution use Hinge Health, according to the news release.
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Musculoskeletal conditions represent one of the top-five highest sources of employer claims spend, according to a February report from UnitedHealth Group, Modern Healthcare reported earlier this year.
That’s led to massive investments in the digital physical therapy market, driven mainly by a high rate of unnecessary spinal surgeries, Tom Cassel, president of digital consultancy Rock Health said during an interview with Modern Healthcare last month.
Most telehealth musculoskeletal startups fall into two categories, Cassels said—those like Hinge Health and SWORD Health that employ providers and those like IncludeHealth and Kaia Health that focus primarily on providing tools that physical therapists can use to offer virtual care. Employers generally require that a startup hire providers so that they can guarantee some continuity of service. In contrast, insurers and health systems can use their tools to get their own physical therapists online, Cassels said.
The U.S. has the highest rate of spinal surgery globally, despite reporting a prevalence of spine disorders that are similar to those found in other countries, according to a study published in Spine magazine, Modern Healthcare reported. Medicare spending for inpatient back surgery more than doubled from 1992 to more than $1 billion in 2003. Patients living in areas with more local surgeons were more likely to have surgery, even if physical therapy or other pain management services may be more appropriate, according to a 2015 study from the Workers Compensation Research Institute.
Mobile health companies raised $1.4 billion during the third quarter in 2021, a 109% increase over the same period last year, according to data from Digital Health Business & Technology.