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Wellness-incentive company Engagement Health raises $2.4 million

The 2-year-old company follows the same path as businesses like Healthways and RedBrick Health by providing health assessments, coaching and customized programs helping with high blood pressure, cholesterol, nutrition and and smoking, among others. Engagement’s twist is that it offers clients a type of money-back-guarantee/I’m-not-paid-if-you’re-not-paid approach.

WESTCHESTER, Illinois — Engagement Health, which offers incentive-based corporate wellness programs, has raised $2.4 million to help with a technological upgrade and a broader, more aggressive sales strategy.

The 2-year-old company follows the same path as businesses like Healthways and RedBrick Health by providing health assessments, coaching and customized programs to help with high blood pressure, cholesterol, nutrition and smoking, among other things. Employees who participate get lower premiums and their companies presumably cut health-care expenses.

Engagement’s twist is that it offers clients a type of money-back-guarantee/I’m-not-paid-if-you’re-not-paid approach. It bills a company a fee for its services. But Engagement must earn that money by collecting fees on employees who don’t participate in its program, as well as a portion of money from employees who take part in its health programs and, as a result, pay lower premiums.

“The notion you should pay an (up-front) fee to a wellness or management company is next to absurd,” said Ted Theophilos, Engagement’s chief executive officer. “Tie financials to the success of the program.”

Engagement raised $2.4 million through company executives and private investors, Theophilos said. It will use the money to expand its sales staff and embark on a series of technological upgrades: better voice recognition software for employees who call in their health results, as well as iPhone applications and other online tools. The company expects to more than double its staff. It employs the equivalent of 21 employees. It wants to expand to 45 full-time equivalent positions, Theophilos said.

Engagement announced four new customers this year, including RMB Capital Management in Chicago and Arkansas’ Hendrix College. Theophilos said the company has a total of 16 clients with 9,000 employees entering their health data. By the end of 2010 he wants about 40 client companies with 30,000 employees in the system.

[Photo courtesy of Flickr user gregoconnell]