In the United States, more than one-third of people prescribed medications fail to take them as directed. Not only does this have a negative effect on their health and well-being, but it also costs the nation’s medical system at least $100 billion each year in additional treatment that is avoidable.
Wellth, a startup based in Los Angeles, believes they can make a sizable dent into this problem by paying people for taking their medications regularly with their Wellth app. Behavioral economics has been found to be an effective tool for addressing noncompliance issues like these because it taps into what motivates people to behave differently.
The key is understanding how incentives work by rewarding desired behavior while penalizing unwanted behaviors or opt-outs. Behavioral economics has been used to increase compliance with all kinds of treatments, including smoking cessation, blood pressure control in diabetes and asthma care. Wellth is using the same approach by incentivizing people for taking their medications correctly on a regular basis while also tracking any noncompliance that could lead to more serious problems down the line.
What is behavioral economics?
Behavioral economics focuses on how the decisions of people and organizations are influenced by psychological, cognitive, emotional, cultural, and social variables as well as how those decisions deviate from those predicted by traditional economic theory.
The behavioral economics paradigm focuses on the limits of economic actors’ rationality. Behavioral models frequently draw from psychology, neuroscience, and microeconomic theory. The study of behavioral economics entails looking at how market decisions are made as well as public choice mechanisms.
We’re intrigued by this, so we get in touch with Matt Loper, the founder, and CEO of Wellth to learn more. He oversees strategy, sales, business development, and finance for the company. Matt is inspired by the chance to create scalable positive behavioral change in patients with chronic diseases and is grateful that he gets to collaborate with some of the finest healthcare providers and insurers in the industry.
For Matt, Behavioral Economics is the key to understanding what makes us do things. What it has done for him is help understand why people make certain choices and how he could inspire them to change their behavior in order to achieve better results. Wellth helps users optimize medication adherence by rewarding them with cash-back through its innovative mobile app that rewards healthy behaviors like taking medications as prescribed or visiting doctors on time.
This incentivizes patients into adopting positive behaviors which can improve health outcomes greatly – not just physically but also financially! Wellth’s vision of making healthcare more affordable for everyone aligns perfectly with its belief in using Behavioral Economics to empower financial wellbeing.
Meet Matt Loper, Co-Founder, CEO at Wellth
LA Startups (LAS): Tell us a good story about how you personally started – maybe one of your early struggles and how you overcame that challenge? A ‘From the Trenches’ type of story that you may not have thought you would survive.
Matt Loper (ML): When we first got started in 2014, the digital health space was still being established, so raising early-stage money was a lot more difficult. I was a first-time founder—a young kid really—that knew nothing about what we were getting into.
Without market validation, and the industry norm of a year to sign a contract, we had very little money to pay the initial team that was working for us. Trying to keep the initial team motivated and bought in was hard.
Really leaning into our mission—and the underserved populations that we were helping—was critical to staying excited about what we were doing. Having firsthand direct experience with vulnerable populations, seeing what they needed, and how we could support them, we were able to get the validation we needed to keep going until we got to the funding stage.
LAS: What’s the first job you had, that’s not on your resume, and what did you learn from that experience?
ML: When I was in high school and college, I used to coach youth baseball and youth basketball camps in the summer. While I loved teaching the younger kids, I quickly learned that once kids get to seventh grade, they get “too cool” to play and begin becoming more worried about how they look than how they play the game.
Applying that to what we do today, there’s a point in life where we all start becoming influenced by external forces. And at that point, it’s important that we’re making those forces positive—ones that nudge us to do better and be better—rather than forces that get in the way of our health and wellbeing.
LAS: Tell us about the inspiration behind Wellth?
ML: My aunt and uncle were both diagnosed with type 2 diabetes within a few years of each other. One quickly adjusted—taking medications and glucose readings daily and committing to healthy diets and now lives a healthy life.
The other struggled to adhere to their care plan, no matter how hard they tried. After years of complications from the condition, they passed away.
Watching two people with the same condition and genetics have two vastly different outcomes made me start thinking more seriously about human behavior—and why we do and don’t do certain things, even if we know it’s important. And this question led to the creation of Wellth.
LAS: What problem are you trying to solve?
ML: Chronic conditions impact almost half of Americans, and yet there’s still so much missing when it comes to providing adequate support for them.
The solutions that do exist tend to help those individuals that are already health-minded — the people that try to eat organic or track their steps or have a Peloton bike—but overlook vulnerable populations. When individuals from minority groups or low-income populations are significantly more likely to have social determinants that lead to a higher risk of chronic conditions, not being able to support these populations is just not acceptable.
LAS: Tell us why you are so passionate about Wellth.
ML: Watching family members that I love struggle to navigate chronic condition care plans—especially at a time when they’re new to the diagnosis and stressed about it for many other reasons—made me want to find a way that helped individuals build good habits and feel better, too.
Since that catalyst experience, watching our Wellth members—many of which come from vulnerable communities—thrive has reaffirmed that passion even more.
LAS: Are your products/services designed with a specific target audience and positioning in mind? Who are they and why?
ML: When it comes to our target members, we very intentionally decided that we wanted to find the hardest cases. We look for those who are Medicaid-eligible, Medicare-eligible, have serious mental illnesses, or multiple chronic conditions, and are the least adherent. We want to help those with the highest risks.
LAS: Describe how you would assess the competition?
ML: A lot of our competitors focus on one-time behaviors. This is really important for many health plans when it comes to improving certain quality metric scores—like a yearly eye exam for individuals with diabetes—but at the end of the day, our health comes down to daily, not one-time behaviors. It’s those breakfasts you eat every day, taking prescribed medications on time.
Combining the one-time behaviors offered by many competitors, along with the daily habits, creates the best chances for not only hitting the “letter of the law” quality metrics we tend to focus on in the healthcare industry but also hitting the “spirit of the law” aim of better health and wellness.
LAS: What is your approach to making big-picture decisions?
ML: I’m very data-driven.
I believe that a lot of bad decisions get made in business because people aren’t able to be objective about the data and let personal biases get in the way. So I always try to go back to the data whenever possible. I’ll have a thesis or hypothesis of what I think is the right decision, but then I go in with the data to attack that hypothesis to try and prove it wrong. If it stands up to the data, I know it’s the right decision and can move forward.
LAS: How do you make sure you have the right people in the right jobs?
ML: I’m very fortunate to work with amazing people, and—for me—it’s been easy to see clearly who we want on our team. Starting from the interview process, when I find a great fit, my biggest focus becomes giving them a clear directive, necessary resources to be successful, and then the ability to make their own decisions.
LAS: What are common things founders overlook?
ML: At the early stages of a business, there’s so much potential—it’s easy to get so wrapped up in the excitement and dreams that you overlook how hard it’s going to be.
Everyone will tell you “It’s going to be really hard and take longer than you expect,” but since you see mostly success stories, you don’t realize how true that is. Even for those success stories, many had near death experiences and challenges right up to the top.
LAS: What personality traits make a good leader? Especially in times of crisis.
ML: I am trying to learn more about this topic.
I really like Jocko Willink, a former Navy SEAL who has written a bunch of books about leadership. His main principle is ownership, and he shares how as a leader, you should never blame the failure of an objective on external factors. You should take ownership for what went wrong, saying “I should have done this… and this is what we’re going to do going forward to make the situation better.”
I’m not perfect at this, but I am trying to learn more about it.
LAS: If you were able to go back in time 10 years, what would you tell yourself about leadership that you didn’t know then?
ML: I used to think I knew a lot about business because I had worked in an investing role, and my job involved determining a good business from a bad business. But I actually knew nothing about what business actually is—I just knew how to read spreadsheets.
Now, I know that business isn’t a spreadsheet. It’s running a company with people that you really care about. It’s seeing that you only have a month of cash on the balance sheet, and you have to figure out how to make it work right so that your employees and their families can pay rent. Real business is about people.
LAS: What kept you up last night? Why?
ML: When we first started out, the big existential questions used to keep me up. Is this working? Are we ever going to do anything that works?
Now, most of those questions have been answered, but it’s not any easier. Now, the questions are how big can we make this? How do we make this the best team possible? What are the trade-offs we have to make? There are always going to be hard decisions to make, but they’re more fun than the initial ones, so I’m getting more sleep now than in our earliest days.
LAS: Describe your proudest achievement?
ML: I’m not sure if there’s a specific moment, but I’m proud of the fact that we’re still here and still alive, and still helping tens of thousands of patients and continuing to grow quickly.
LAS: What Big Piece of Advice would you give to new entrepreneurs who are looking to start a startup?
ML: Work with people that you really like working with—because it’s going to be hard. There will be days you have to wake up and fight really hard battles, but if you actually enjoy working with your coworkers and you trust them, that journey to your final destination will be more enjoyable. (Cliche… I know… but true.)
LAS: Finally, what’s next for Wellth?
ML: High level, we’re focused on continued growth as we strive to meet one million members. That’s our goal. So continuing to strengthen and expand our partnerships both on the insurance and the provider side to meet those goals and support more patients in reaching better outcomes is our “what’s next.”
Check out Wellth’s pitch at TechCrunch Disrupt
Good luck Matt and Wellth!