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Healthcare entrants, primarily startups and tech incumbents, came to the forefront of discussion at last week’s Rock Health Summit. As entrants emerge, healthcare is adapting to a proliferation of choice where patients may seek care outside of traditional services currently accessed through payers and providers. Central to many conversations at Rock Health was the underlying question of patient privacy and data ownership. In their recent report, Rock Health indicates that consumer appetite for sharing health data ranges widely from 73% willing to share with their doctors to 19% with pharma, and only 10% with tech companies. Ironically, consumers regularly share data on their social determinants of health with tech companies, including their zip code, socio-economic status, age, gender, and arguably even search history.
Stakeholders are working to understand how to balance the power of patient data as used in research with the patient’s right to control their own information. Patient data is invaluable in the development of new, life-saving drugs, but at what cost is this data obtained? Pharma R&D paradigms increasingly rely on purchasing “real-world data” collected in insurance claims, health records and molecular test reports. However, patients themselves do not have a central access point to their longitudinal health data, nor are they directly incentivized for sharing this data with big pharma.
The rapidly growing digital health space offers opportunities to any player able to solve the myriad of problems poorly addressed by our current healthcare system, ranging from chronic disease prevention and management, to data fragmentation, to misalignment of incentives. Though digital solutions often aim to deliver outcomes and reduce costs, key opinion leaders call on players to consider the digital divide and be mindful of closing, rather than widening, the gap in healthcare disparities. Below we highlight four key calls-to-action drawn from this year’s summit, building upon our insights from last year’s conference.
Digital therapeutics are well-positioned to capture patient-generated data that may inspire novel clinical endpoints. Stakeholders point to the CTTI’s novel endpoint recommendations as a resource for generating these novel endpoints, such as bothersome tremors in Parkinson’s Disease, ambulatory activity in heart failure, and total arm movement in muscular dystrophy. Digital therapeutics in particular may leverage software as an intervention and an endpoint, a distinction that is important to define in clinical trials. Vivante, an emerging adjuvant digital therapeutic, aims to reduce flares, decrease ER visits, and reduce Rx drug dependence in patients with GI disorders, and, in doing so, capture data that will be used to define endpoints for digestive health, an unmet need in the GI space.
As for the financial piece, existing revenue models that rely on cost-sharing between payers and patients, are often difficult to administer. Payers suggest exploring other revenue models, such as those that are subscription-based or per-patient-per-month. Sandra Clarke from Blue Shield of California emphasizes that payers forging digital health partnerships expect potential partners to demonstrate a clear value proposition on which they can deliver. It is important to note that digital therapeutics should design novel revenue models in alignment with current reimbursement structures. For example, Blue Shield of California partners with Solera Health, a digital chronic disease prevention program, which facilitates reimbursement for social service providers through the same avenues as traditional providers.
Although the digital therapeutics landscape is ripe for innovation in endpoints and business models, evidence generation remains paramount. The “wild west” landscape for digital health companies of the past decade will likely see a crack-down driven by payers and regulatory bodies demanding clinical and/or financial evidence for digital interventions. When defining an evidence generation strategy, startups should consider partnerships with pharma as an avenue to access knowledge or capital. For example, Livongo, a chronic disease management company, established a partnership Eli Lilly to tap into their knowledge base in order to conduct a retrospective analysis of 10,000 patients. Using claims data, this study allowed Livongo to demonstrate that their diabetes program yielded a 21.9% decrease in medical spending, or $88 per person per month.
AI is often portrayed as threatening to replace human interaction in healthcare. However, several players at Rock Health highlight strategies that use AI in order to facilitate, and even improve, the patient experience. Marigold Health, a peer support group chat application, uses AI/NLP to screen patient conversations and flag potentially concerning messages for providers. This allows patients to have serious conversations on difficult topics in a safe space without requiring physicians to spend their time as moderators. Likewise, Honor works to provide the best experience for their in-home care professionals and the patients they support by using AI to analyze factors that impact employee retention and satisfaction. They found that, by accounting for things as simple as travel time to patients, they can improve retention rates and enhance the patient experience.
Other players including Collective Health have also successfully used AI/ML to facilitate patient communication and improve patient experience. Like Honor, Collective Health matches patients with the same representatives over call and email in order to foster relationships and build trust. When it comes to patient care, AI is not a replacement for human interaction, but a tool to facilitate more efficient and meaningful conversations with providers, care professionals, and other patients. These interactions ultimately help to improve care experience and return value to the patient.
The digital health market sees an increasing number of players moving from B2C models to B2B models, where solutions are contracted with payers, employers, or health systems to deploy across a given patient population. This is evidenced by Helix’s announcement earlier this year that they are moving away from their direct-to-consumer business model and beginning to partner with health systems directly, increasing their ability to scale. Within the payer market, self-insured employers arise as a key customer segment of interest for digital health solutions. Self-insured employers tend to face an especially high “innovation tax,” as dubbed by Collective Health’s VP of Platform Partnerships and Strategy, Shauna Kashyap, due to the time and expertise needed to evaluate and select program partners.
Stakeholders emphasize that there is room for disruption in measuring hard ROI, rather than VOI (value of investment). VOI is typically seen as more abstract than ROI and is usually discussed in the context of fewer sick days, improved productivity, and employee retention. While VOI can be attractive, demonstrative ROI is key to driving adoption by payers and employers. Virta, a digital health company with solutions for T2 diabetes reversal, demonstrates ROI based on hard dollars saved in prescriptions and medical costs. Virta deploys an outcomes-based revenue model where 100% of its fees are at-risk, such that payment is not required unless patients see reduced A1C levels, lose weight and reduce insulin dose needed.
Many of the predominant issues bogging down healthcare today are not the ones grabbing headlines. Prema Shah, founder at Ciitizen, draws attention to the need to address these unsexy, “janitorial” problems, such as inefficiencies with faxing patient records, reading CD-ROMs, and integrating EMRs, that providers face on a day-to-day basis. Although gamified treatments and wearable sensors are exciting, they often layer on top of existing, bloated systems and do not solve the core problems that result in inefficiencies. Like the crude oil behind luxury cars, the janitorial elements of healthcare may not be flashy, but they drive the system.
Tech companies and start-ups alike should look to these more mundane issues as a starting place for where health tech can have an impact. With communication inefficiencies costing upwards of $11B annually and as many as half of all patient records being transferred incorrectly between hospital systems, there is a lot of room for digital health to influence overall costs and patient outcomes by starting at the bottom. Although these solutions may not get the most airtime, they will ultimately result in better care for patients.
Rock Health Summit 2019 showed that the digital health landscape is growing and maturing, and we will continue to track developments in this space closely. DeciBio will be at HLTH 2019 – to connect with us there, contact [email protected]
Fanny Anderson is an associate at DeciBio, with experience in competitive assessment and strategy development for disruptive players in oncology diagnostics and digital health. Connect with her on LinkedIn to learn more about her expertise in health technology consulting.
Katie Gillette is a senior analyst at DeciBio with experience in Clinical Diagnostics, Health IT, and Novel Techs. At DeciBio, many of Katie’s projects are related to digital health and oncology. Connect with her on LinkedIn.
Disclaimer: Companies listed above may be DeciBio clients and/or customers
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