The next “step”

The next “step”

Yesterday Apple once again dominated the tech news with the launch of their new iPhones and much anticipated Apple Watch. A key component of the Apple watch is its ability to track health related data such as heart rate and steps taken. Many believe, Diabetic Investor is not among them, that one day these “smart” watches will also track glucose.  Our lack of belief stems from 20 years covering this sector and the many technical hurdles associated with measuring glucose from a watch like device. It’s possible that Apple, Google, Samsung or some other high tech will actually make non-invasive glucose monitoring a reality; still we have serious reservations this will happen.

A much more realistic approach may have been lost in the Apple news cycle. A less well-known company Livongo Health has a glucose meter that also functions as a pedometer. Better still this systems sends this to data … wait for it … to the cloud. The In Touch system is not the first nor will it be the last system that transmits data to the cloud. TelCare has a glucose monitor that transmit data to the cloud, soon Dexcom (NASDAQ:DXCM) will have data from their CGM transmitted to the cloud as will just about every other company with a diabetes device.

Diabetic Investor suspects it’s just a matter of time before the In Touch or some other system will add even more features, i.e. communicating with a scale, blood pressure device, etc. The fact is this technology exists today to make this a reality. This is the essence of interconnected diabetes management (IDM), first gather data, and get this data to healthcare professionals so they can analyze it, who then in turn can communicate to the patient – through a device like the In Touch which allows for two-way communication- suggestions on how to better manage their diabetes.

The difference between a company like Livongo and Apple, other than the obvious differences, is that Livongo is taking a more realistic approach. The fact is nearly every high tech company has fallen in love with whiz bang technology  They have fallen for the biggest myth in diabetes, that patient’s will actually use a true non-invasive glucose monitor. That non-invasive glucose monitoring is the Holy Grail when in reality it’s a fool’s paradise.  We hate to be redundant but we’ll say it again – the reason patients don’t test their glucose on a regular basis is they don’t value this information, that for many the result of the test is not followed by action.

To Diabetic Investor this is the why IDM could be valuable as the patient with the help of their healthcare team will begin to understand the value of this information. Put simply, the patient is being educated and as hundreds of studies have proven educated patients test their glucose levels more frequently even it means so-called painful finger sticks.  The fact is without understanding the value of this information it doesn’t matter how it’s gathered.  Even if a true non-invasive system became a reality it wouldn’t change diabetes management one bit if the data gathered is not valued by the patient.

We also see the Livongo approach more realistic not just from a technology perspective but also from a regulatory and reimbursement perspective. As we have noted with regularity the tech world is about to cross paths with the FDA, an agency not exactly known for speed or innovation.  In the tech world 6 months is a lifetime at the FDA it takes 6 months just to get a meeting set up.

More importantly In Touch has a built in reimbursement model to follow. Yes it’s true that reimbursement for test strips has fallen dramatically these past few years, however reimbursement still exists. There is no need for payors to reinvent the wheel. This will be a major issue for tech companies as with a true non-invasive device without a disposable component how will they make money. What tech companies are banking on is the payback will come when we switch from a fee for service reimbursement model to an outcomes based model. Diabetic Investor does not disagree that we are moving in this direction we just see Livongo making money today and in the future.

The fact is tech companies and their fascination with whiz bang, unproven, technologically challenged systems – systems that may never see the light of day- give companies like Livongo a chance for David to topple Goliath. Put more simply Livongo is moving forward step by step while Apple and their tech counterparts are attempting to make a giant leap over the Grand Canyon of diabetes hurdles.

As we have noted with regularity this quest to develop a truly non-invasive glucose monitor has been going on well before Diabetic Investor came into existence.   A quest which has seen investors bilked out of millions of dollars. Even when these efforts aren’t a scam; they have yielded nothing, zilch, nada. Apple, Google and Samsung with all their technological prowess, their ability to innovate and huge cash balances cannot overcome some very difficult issues with making non-invasive actually work.

The simple fact is Apple, Google and Samsung are looking for a quantum leap when it’s not needed.  Patients with diabetes need are systems that work, systems that are available now not years from now.  They could care less about quantum leaps preferring instead to take the next step forward; Livongo just might give them that chance.