Looking for clues

One of the biggest perhaps the biggest question being asked right now is what will life look like after COVID. When it comes to healthcare everyone is wondering whether after COVID is over will patients continue to use digital health tools, i.e. virtual physician visits or will they go back to actually seeing their physician in person. Early data and it’s very early seems to indicate that while virtual visits gained in popularity during COVID in the post-COVID world patients seem to prefer physical visits.

Another question is just how many of the digital tools adopted out of necessity during COVID will remain in place when COVID is over. Will patients continue to be comfortable with being monitored remotely, sharing their data via a smartphone or will they begin to opt out after COVID is over.

These questions have huge implications for all the digital diabetes players, companies whose entire business model is built upon the premise that the post-COVID world won’t be much different than the COVID world. As we have stated before many already believe that the old way of doing things has passed that digital health/digital diabetes is here to stay. That COVID was such a transformational event patients have become comfortable with sharing data and being coached.

Given that COVID is still here everyone is looking for clues for what life will be like after COVID. Are the initial surveys correct, surveys which seem to indicate that in a post-COVID world digital health is here to stay but not used as frequently as it was during COVID. Or has new era truly dawned with digital health becoming the standard of care with in person visits becoming the exception. Our position has always been and remains that while digital health is here to stay in a post-COVID world life will go back to somewhat what it was like before COVID. Simply put digital health will become a supplement to care NOT the standard of care.

This position has been reinforced by the results released by UnitedHealthcare, who reported third quarter results yesterday. Results which seem to indicate that patients are once again getting out and seeing their physician. It appears that as restrictions have been lifted, that with patients no longer sheltering in place life is getting back to the way it used to be. That patients and their physicians have adapted to COVID with new procedures and guidelines making in person visits safer.

Keep in mind these early clues are still very early and COVID has not yet gone away. Still we can’t help but think that just as people began to go back to restaurants, grocery stores and other public places they also went back to their doctor. Facemasks have become commonplace, as has having your temperature taken plus social distancing have all contributed to people feeling ok with getting out. We are by no means anywhere near what life was like before COVID and quite frankly its difficult to imagine getting back to anything near what life was like before COVID. But as we have been saying all along people are adapting just as we adapted to life after 9/11.

Lost in the hoopla over digital health is a few of those pesky facts. First and foremost this transformation to digital health was happening before COVID. COVID just threw gas on a small fire and made a huge fire. Let’s be very honest here does anyone seriously think Teladoc would have valued Livongo at $18.5 BILLION had COVID not happened.

Second digital health is not new although many want you to think it is. For many patients with diabetes things like remote monitoring were already in place and being used before COVID. Coaching platforms were also being used. COVID may have temporally increased usage of these tools but we suspect that once COVID is gone the diabetes management world will go back to the way it was before COVID, with a small motivated group of patients who were using these tools prior to COVID continuing to use them, while a fair of percentage of patients new to remote monitoring and coaching discontinuing use after COVID is gone. Simple put the patients new to digital diabetes tried it out of necessity but didn’t really like it all that much.

Third and this gets ignored all the increased competition in digital health will drive profits DOWN not up. COVID may have changed many things but it hasn’t when it comes to how companies handle competition. Try as they might to differentiate themselves from each other when it comes to digital diabetes all the players do pretty much the same thing the same way. Listen for their fancy sounding terms there are only so many ways you can manage a patient.

Like so many other aspects of our wacky world diabetes coaching has become basically a commodity. And in a commodity market price trumps performance. This happened with BGM, insulin, insulin pumps is coming to CGM and will hit digital diabetes as well. This is the reason companies like Teladoc/Livongo are rushing to sign as many deals as possible before their competitors drop the big one. The big one being when Teladoc/Livongo competitors go 100% at risk offering their programs for FREE and only getting paid for verifiable improvements in patient outcomes combined with REAL cost savings.

Right now with COVID still here all the digital health players are enjoying unprecedented valuations. Each time they announce a new deal they play up the fact that a health plan has X amount of covered lives understanding full well that doesn’t mean X amount of lives with diabetes. We have seen this with the diabetes device makers and are seeing it again with digital diabetes. You would think by now that investors and analysts would have caught on to this game, but somethings just don’t change.

Keep in mind with each deal announced all this really means is that a company has access to patients with diabetes. Getting the deal is the easy part as the health plan and/or employer pays nothing until patients/employees begin to sign up, start using the program and remain on the platform. These deals make for great press releases which in turn drive share prices higher, but truth be told mean very little as the heavy lifting hasn’t begun.

There is no question it’s been a great ride for digital health, but this ride will NOT last forever and like the bubbles that have burst before this one will also explode. As Momma Kliff would say enjoy the good times while they last but keep in mind that good times as much as we want them to last forever always come to an end.