Another Step Closer

Another Step Closer

Diabetic Investor has maintained that it’s just a matter of time before the cost of person’s health insurance will be directly tied to how they are managing their health. That just as safer drivers pay less for auto insurance so too will patients who better manage their diabetes will pay less for their health insurance. That just as drivers share their diving data with auto insurers so too will patients with diabetes share their data with health insurers.

Well the future is getting closer each day. Last week at the HIMSS show in Las Vegas Qualcomm and UnitedHealthCare announced they were collaborating on what else connected health solutions. According to a Qualcomm press release;

“The first program under this new collaboration is UnitedHealthcare Motion™, a health and wellness program powered by Qualcomm Life’s 2net Connectivity Platform for employers nationwide. UnitedHealthcare Motion is designed to help plan participants become healthier and more active, while helping them pay for the cost of everyday health care. Available on a select basis to companies with 101 to 300 employees with a fully insured health plan, UnitedHealthcare Motion helps employers address rising care costs by providing employees and their covered spouses with custom-designed wearable devices that track the number of steps each user takes throughout the day, calculating the total number, frequency and intensity of the steps taken.

The data acquired from the wearable devices is then sent to the UnitedHealthcare Motion app, which is powered with seamless and secure connectivity through Qualcomm Life’s 2net Mobile connectivity platform. Employees with these wearable devices earn Health Reimbursement Account credits that can total up to $1,460 per year, based on their usage, helping to save on health care costs. Employers can also obtain premium savings based on the combined results of their program participant.”

Given all the interconnected diabetes devices many of which are compatible with the Qualcomm platform, is it not just a matter of time before diabetes is next on the list. As we have noted in the past diabetes is the perfect disease state for just such a program as there is near universal agreement on the verifiable metrics which define control. It also true that employers save tons of money and increase employee productivity when their employees with diabetes are under good control.

Hey if United can offer lower premiums for tracking activity levels why not diabetes related metrics.

This is why Diabetic Investor sees a glimmer of hope for companies like Livongo, TelCare and iHealth as they not only have the technology but they were built to perform in this market. Unlike the big boys, and in actuality there is now just one big guy and three little guys, these companies are not dependent on formulary access. Their revenue stream comes from monthly fees plus bonuses based on outcomes, a world that is foreign to Johnson and Johnson (NYSE: JNJ), Abbott (NYSE: ABT), Roche and Bayer. This is the reason LifeScan did their deal with WellDoc as they see where this going.

Yet glucose meters are just the beginning.  As we noted just yesterday nearly every diabetes device now communicates with the cloud. Think of the possibilities should say JNJ partner with United and provide a suite of devices all of which communicate with the cloud, all of which impact how well an employee controls their diabetes.  Whether its JNJ, Medtronic (NYSE: MDT) or someone else this day is coming and will be here sooner than everyone thinks. This is no longer about technology that barrier was broken though long ago. This isn’t about patients concerns over the privacy of their health related data, just as drivers have been willing to sacrifice some privacy for lower auto insurance premiums so too will they do the same to save money on their health insurance.

Long ago we predicted that employers faced with ever rising health care costs would drive change in this market. That the missing element was not technology rather how this technology was applied. Yet the tipping point has now been reached as everyone is beginning to figure out what employers want more than anything is a return on their investment. They want to see real verifiable data that shows these programs are working.

It’s a whole new world folks and its time the old guard wakes up to this fact or risk being swept aside for these young bucks who will be more than happy to take their business.  This means the old guard must do something they aren’t used to doing, thinking outside the box. Getting away from their comfort zone and embrace the changes that are taking place. As we are now another step closer to the old way of doing business becoming obsolete.