Hinge Health, a prominent musculoskeletal company, made headlines this week with news of its $105 million acquisition of Cylinder Health. The deal is notable because it allows Hinge to expand into an entirely different disease state: gastrointestinal disease.
Whether that strategy will resonate with employers is up for debate, according to a leading investor and a Cylinder Health competitor.
Michael Greeley, cofounder and general partner of Flare Capital Partners, believes the deal could be a major benefit for employers, who are struggling with point solution fatigue, and could position Hinge as a healthtech company with a multi-disease platform in the future should similar deals follow. But a Cylinder competitor believes employers may still evaluate other gastrointestinal companies if they offer stronger clinical outcomes, even if they already contract with Hinge for MSK.
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Both Hinge and Cylinder primarily serve employers, and this deal allows them to manage one vendor instead of two separate vendors.
“There are many dozens of virtual care companies that tend to be very disease-specific, indication-specific, and there should be some natural consolidation of those,” Greeley said in an interview. “And Hinge has been a terrific public company. The team is excellent. You may see them catalyze some consolidation, and maybe this is the first of those transactions.”
He added that he could see Hinge or other similar companies potentially expanding to other disease states in the future, specifically those that are a major driver of spend for employers, such as cardiovascular disease and mental health.
However, a competitor of Cylinder, Oshi Health, has a different view. While this deal may be attractive for employers due to its ease in contracting, Oshi’s CEO believes employers may still opt to contract with a separate gastrointestinal company with a proven track record. In other words, they might sacrifice convenience for the best solution in the disease being tackled.
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“The counter to the whole point solution fatigue piece is [that employers are] also fiduciaries of their plan, and you’re seeing more and more lawsuits saying, ‘Hey, my employer is not actually generating the best value for our plan.’ If you have that kind of risk, you really need to pick solutions that are proven to save money. … Ease of contracting should be outweighed by the risk,” said Sam Holliday, Oshi Health CEO, in an interview.
He noted that a recent report from the Peterson Health Technology Institute evaluated both Cylinder and Oshi. The two were separated into different categories, with Cylinder listed as a wraparound solution and Oshi listed as a clinician-led virtual care provider. PHTI concluded that clinician-led care was effective for both IBS and IBD, whereas wraparound solutions’ evidence supported its use mainly for IBS.
“Wraparound solutions deliver clinically meaningful improvements in symptoms and quality of life for patients with IBS. However, the limited available evidence examining wraparound solutions for patients with IBD shows no clinical benefit over usual care,” the report said.
Holliday argued that employers are likely to choose the strongest GI solution rather than expand with an existing digital health vendor.
“Some of the companies that have multiple conditions already — like musculoskeletal and have added on mental health — lots of their customers don’t pick the second offering just because they have the first. They go with whoever the best solution is in that category,” he said. “I think GI is a big enough category and a meaningful enough amount of spend that they’re not going to just pick the easy solution; they’re going to do the right analysis and pick the best.”
It’s worth noting that Flare Capital Partners is an investor in Oshi Health.
An employer group, meanwhile, seems to agree with Greeley that a consolidation of disease-specific platforms could be beneficial for employers.
“Providing a solution that focuses on both of these expensive conditions makes sense from both an employer and patient perspective. A partnership like this can provide less vendor management for employers with the potential for better health outcomes for the employees and their family members,” said Jenny Goins, chief of staff at the National Alliance of Healthcare Purchaser Coalitions, an employer advocacy group.
The transaction details
Hinge’s interest in digestive health began due to feedback from members and clients, according to Daniel Perez, co-founder and CEO of Hinge Health. Gastrointestinal conditions affect about a quarter of U.S. adults and drive about $135 billion in annual medical spend, he said. In addition, roughly 69% of U.S. counties lack a gastroenterologist.
Perez said the company chose Cylinder due to its “strong product foundation and clinical expertise in digestive health,” as well as its scale. The company has treated more than 150,000 people.
“They have also built valuable relationships with health plans and partners that we can build from,” he told MedCity News. “They’re a strong fit for the broader unified platform we are building at Hinge Health, where digital care, specialist access, and in-person evaluations work together to deliver better care for members and lower costs for employers.”
Cylinder’s existing clients and members will receive care through the current Cylinder product, Perez said. At the same time, the companies will develop a GI program that will be integrated into Hinge Health’s platform, with a planned launch in summer 2027.
Cylinder’s CEO, Terry Boch, will be joining the Hinge Health team to support the transition and integration.
According to Perez, the plan was always to expand beyond MSK.
“Our vision is to scale and automate the delivery of care,” he said. “While we started in MSK, our vision has always been broader than that. We’re building toward a goal where our members can get their care across multiple conditions from one platform — be it digital, specialist, or in-person. We launched our Migraine Care Program earlier this year, and with this acquisition, we are now expanding into GI with an 18-24 months headstart compared to building from scratch.”
Hinge’s trajectory echoes the path that Omada Health took over many years before it became a public company last year.
Like Hinge starting with MSK and moving to migraine and GI, Omada started with prediabetes and moved to hypertension, weight management and physical therapy. But their approaches to care aren’t alike.
“Hinge Health focuses on high-margin, clinical point-solutions (traditionally musculoskeletal care, expanding into neurology and GI),” said Michael Abrams, managing partner of consulting firm Numerof & Associates. “Omada Health takes a more systemic orientation, focused on metabolic health as a path through which multiple chronic conditions can be addressed.”
Photo: Kritchanut, Getty Images