Is it a big deal? Maybe
This past Monday Glooko announced they had raised another $35 million. Per a story that appeared on the MassDevice web site;
“This additional funding will help us to further our mission: to improve the lives of people with diabetes,” CEO Rick Altinger said in prepared remarks. “With this capital, we will accelerate our investments in clinical solutions that aim to increase medication adherence, provide personalized insights and prompts that drive behavior change for people with diabetes, and deliver clinical decision support to thousands of clinicians and coaches so they can better support people with diabetes in between office visits.”
What made this latest financing round interesting was the addition of new investors Georgian Partners, Insulet (NASDAQ: PODD) and Mayo Clinic. These new investors were joined by existing investors Medtronic (NYSE: MDT), Samsung, Canaan Partners and Social Capital.
Is this a big deal? Maybe.
The key for all these interconnected diabetes management (IDM) companies is simple; drive cost out of the system. Now most of these companies and Glooko is among them attempt to do this by marrying patient data to data analytics which when combined with sophisticated algorithms help their patients more effectively manage their diabetes. As we have noted in the past most also go after the low hanging fruit for cost savings targeting insulin using patients. The key being keeping these patients out of the emergency room.
However, the bigger fish in the pond, more like the whale in the ocean, are all the patients who do not use insulin, non-intensively managed patients. Now don’t get us wrong here we think more than likely Glooko will eventually get bought by a bigger player in the diabetes sandbox. Whether they do an IPO before as a liquidity moment for their investors is almost immaterial. Glooko won’t be bought because they have the very best solution, no they will be bought because whoever does buys them knows it’s cheaper and quicker to buy an existing franchise then to start from scratch.
Yet the real value in IDM is not with insulin using patients, no the real value is with non-intensively managed patients. Hence the reason why the Glooko CEO noted they want to “increase medication adherence.” This my friends are the key that will unlock the treasure chest. It is also the most difficult hurdle to overcome.
The biggest problem as we see it as almost every effort put forth to increase medication adherence involves changing the behavior of the patient. Behavior change is all the rage with IDM companies, change they believe they can bring about by combining data with coaching. That these non-intensively managed patients will become more engaged with their diabetes management because they have help. While that sounds good in theory that’s all that it is a theory.
Now we will not relist all the reasons why non-intensively managed are so different than intensively managed patients. What we will add today is that perhaps it’s time that these IDM companies start thinking out of the box. That instead of attempting to change the patient’s behavior why not instead the patient experience. Make diabetes management not a daily chore which these patients dread but something they enjoy doing. Change the experience, the environment these patients operate in.
Think of it this way, most people hate working out. Sure, they like the benefits but to get to those benefits they must do the heavy lifting, they must put in the effort. They need to take time from their busy schedules and most importantly they must make their work out a priority which means they must give something up. Places like SoulCycle and health clubs for example have solved this problem using the strength in numbers approach. Their participants do not toil in anonymity. The workout goes from being a job to an enjoyable social event.
Facebook does this for intensively managed patients. We’re not exactly sure how many diabetes related Facebook groups there are for insulin pump patients but the ones we’ve seen do the same thing. These groups give these patients a chance to share, to bitch and help each other. This shared experience helps these patients feel better about all the heavy lifting they do every day. They do not feel alone that they are battling their diabetes by themselves. There is something comforting knowing that others feel the same way, that they too are fighting the fight.
The problem for non-intensively managed patients is that so far no one has created such an environment. Granted this is no easy task but it is a task worth the effort. These people need the same support, understanding and compassion that intensively managed patients get. They need to know they aren’t alone that there are others just like them. Others who also struggle managing their lives and managing their diabetes.
Here is the most important thing they must get something other than better outcomes as the benefit for all this hard work. They must get something tangible, something they can see, feel or touch. We’ve said it before and we’ll say it again a patient with diabetes does not walk into a room and have someone come up to them and say; “Boy your A1c is great keep up the good work.”
Until now most approaches aimed at non-intensively managed patients have been overly clinical. Based on the premise that these patients will respond to the clinical aspects of better diabetes management. Well these approaches just don’t work because the patient does not get anything tangible for doing all the heavy lifting, there is no medal placed around their neck when they cross the finish line. They are told to do all this work because sometime in the future they “might” avoid a leg amputation, kidney failure or blindness.
This ignores the basic aspects of human nature as quite frankly these patients aren’t thinking about what might happen years from now. These patients are thinking about what’s going to happen tomorrow and they aren’t thinking that their diabetes management impacts tomorrow. Something that would change if they knew that tomorrow they would pay lower premiums or have a lower co-payment by more effectively managing their diabetes.
The fact is most IDM companies through no fault of their own were designed with intensively managed patients as their target. This is understandable as it is the shortest distance between two points. However, if we are ever to see an increase in medication adherence the paradigm needs to change. Yes, the distance between the two points is longer but it is a journey that is worthy of the effort.