Soda Health, a new digital health company aiming to reduce health inequalities by creating a technology framework that allows health plans to reimburse for goods and services not supported by traditional medical claims, launched today with $6 million in seed funding.

The company’s lead investors are Lightspeed Venture Partners and Define Ventures, with additional support from Qiming Venture Partners USA.

Soda Health is based in Bentonville, Ark., and was founded by a group of healthcare, retail and consumer experience veterans from companies such as Walmart and Rally Health.

The company’s offering gives consumers health plan debit cards to purchase items related to the social determinants of health, such as healthy foods, over-the-counter medications and transportation services. But instead of charging health plans for the cards upon distribution, Soda Health defers the expense until the benefit is redeemed.

For health plans, Soda Health has created a technology platform to manage and administer benefits.

“We are building an organization solely dedicated to eliminating health inequities,” Robby Knight, Soda Health cofounder and CEO, said in a statement. “We accomplish that by making the healthcare transaction and experience more like retail purchases using debit cards.

“Until now, the healthcare industry has relied on legacy payments technologies which have left both health plans and consumers with a less than optimal solution. Our architecture will meet customers’ evolving needs in a way that until now no one thought possible.”

WHY THIS MATTERS

It’s been well established for years that external factors like housing, education, access to healthcare, social inequities, institutional inequities and other social determinants of health play a significant role in a person’s overall health.

In fact, it’s estimated that between 80% and 90% of a person’s health is determined by environmental and behavioral influences, according to the National Academy of Medicine. Meanwhile, the majority of healthcare spending goes towards direct medical services – which often don’t address those external factors.

The COVID-19 pandemic has helped many realize this disconnect, and in turn, has increased demand for innovative SDOH programs.

THE LARGER TREND

Today, many digital health startups are working to increase health equity while mitigating health disparities.

Unite Us has a platform for connecting community-based organizations to health organizations, insurers, governments and nonprofits. The company recently acquired Carrot Health to deepen its data analytics capabilities, and earlier this year closed a $150 million Series C funding round.

Cityblock is focused on addressing the SDOH by using technology to help create support teams. The company developed a platform, called the Commons, that integrates primary care, behavioral health, social services and 24/7 virtual care. It landed $192 million in a Series C extension funding round this March.

There’s also Medorion, an Israeli startup that designed a tool that uses AI to go through both medical claims and social determinants of health data and evaluate factors driving a patient's healthcare decisions. It scored $6 million in funding this July.