The promise, the problem
“Our findings suggest that technology-assisted self-monitoring of lifestyle behaviors and diabetes-related health indicators helped the study participants understand the importance and rationale of selecting healthy choices and behaviors, and helped to make sense of why certain lifestyles must be adopted to control blood glucose,” the researchers said in the study. “Health providers, such as diabetes educators, can incorporate this into clinical practice and encourage patients to adopt self-monitoring of their lifestyles and health indicators for better diabetes management.”
We found this quote in a story posted on the mobihealthnews website regarding a study done by the University of Texas Health Science Center at San Antonio. The study examined the role technology plays with patients with Type 2 diabetes.
To us this quote captures both the promise and problem with all this whiz bang way cool technology, the toys in the toy chest. As we consistently state when used as designed these toys can be a valuable tool in helping patients more effectively manage their diabetes. However as we also state consistently the problem comes in getting patients to play with these toys on a regular basis.
The problem as we see is not that the technology doesn’t work, the problem is continual patient engagement. We have seen other studies that have similar findings, findings which note that when engaged patients experience better overall outcomes. Yet as critical as continual patient engagement is companies are still focused on the toys in the toy chest and not getting patients to play with these toys on a regular sustained basis.
Recently we have been researching all these new wearable devices which track everything but glucose. Yep you can’t swing that poor dead cat without hitting one company or another that is building sensors into some sort of wearable device. Many have speculated that it’s just a matter of time before the Apple Watch adds glucose monitoring or that the new smartwatch from Fitbit will have this functionality. Others are taking a slightly different approach incorporating glucose data captured by either the Dexcom CGM or Libre into their apps which connect with their particular wearable device.
The thought process and it’s a good one, is that glucose data alone as valuable as it is does not tell the whole story. That by incorporating other data points such as exercise, food intake and cardiovascular monitoring a more complete picture emerges. That by incorporating these additional data points into algorithms these apps can provide even better recommendations to the patient.
Yet what none of these toys can do no matter how sophisticated they are, no matter how cool they are is motivate the patient not just to use them but use them on a regular basis. This is the reason we have long maintained that incentives are needed to keep the patient engaged with their diabetes management. That by giving the patient real skin in the game it increases the chances they will remain engaged. Incentives do not guarantee continual engagement however they are sure better than no incentives at all. The fact is and we’ve said this a million times it’s easy to give the patient the how to manage their diabetes the hard part is getting them to WANT to manage their diabetes.
Now at this point many of you are thinking here he goes again. Why can’t Dave be happy that the Chicago White Sox are in first place or that the weekend protests in Chicago were peaceful or that today is National Cabernet Sauvignon Day. (Ok that last one isn’t for Dave as he doesn’t drink wine it’s actually for his beautiful wine consultant.)
Some might be thinking its time for Momma Kliff, who celebrated her 89th birthday yesterday (Happy Birthday Mom) to tell her son that it’s time to get off the damn soapbox.
Well believe it or not this push to add incentives has a real and practical business rational behind it. That any company smart enough to add incentives to their way cool whiz bang patient coaching platform will have an edge over the competition. That adding incentives will help them make money given that the future for patient coaching platforms isn’t the per patient per month revenue model that’s in place today. That in the not so distant future revenue will be made from producing real and verifiable improvements in patient outcomes.
Listen we know that everyone is still going gaga over the $18.5 BILLION Teladoc paid for Livongo. That thanks to COVID digital health remains hotter than Georgia asphalt. Yet during all this irrational exuberance everyone seems to have forgotten this is a business and that making money does matter. Last week Verily announced they were entering the insurance business and Verily also owns Onduo which happens to be in the diabetes coaching business.
According to a story on the Reinsurance News website;
“The new insurer will combine innovative health technology solutions with novel insurance and payment methods, leveraging Verily’s strengths integrating hardware, software and data science. Coefficient will also make use of Swiss Re CorSo’s risk knowledge, distribution capabilities and position in the employer stop-loss marketplace.”
In another story on the Verge website;
“Insurance could be a more reliable source of income for Verily, as the company’s history in technology and health care could make the new Coefficient subsidiary an intriguing partner for insurers. For example, Coefficient claims its “analytics-based underwriting engine” will help employers better understand risk that they’re taking on. And down the line, Coefficient wants to integrate Verily tech to help employers better control their costs.
Many insurance companies already give customers rewards if they hit goals set by wearable devices in exchange for sharing their data. That data is valuable to insurance companies so that they can know whether or not they are paying too much to cover an individual. Verily’s tech could help insurance companies triage even more data to offer specific types of policies for certain people.”
We have long maintained that it was just a matter of time before a Livongo competitor went nuclear and offered their program for FREE. That instead of a per patient per month revenue model make money from producing real and verifiable improvements in patient outcomes. Given their vast resources Onduo could be that company and they have another advantage over Livongo other than very deep pockets. Unlike Livongo which uses an old fashioned out of date glucose monitor to collect data Onduo is partnered with Dexcom and collects data from state of the art CGM technology.
Yet Verily isn’t the only insurance company who could do this as UnitedHealthcare also has a diabetes coaching platform that also works with Dexcom and this programs includes … wait for it … incentives. United also has something that Verily does not yet have, a large installed base of existing clients and years of experience in the business. Just as Onduo/Verily could offer their platform for free so too could United. The difference being that rather being paid for producing real and verifiable improvement in patient outcomes United will make money the old-fashioned way by add more clients to their already large installed base.
What does all this mean? It means that the business model Livongo was built on that the $18.5 BILLION Teladoc paid for Livongo could be one of the biggest miscalculations EVER. Teladoc/Livongo may have some synergies but what they don’t have is the deep pockets of Verily or the huge installed user base that United has. Just how will Teladoc/Livongo compete when the per patient per month revenue model goes bye bye? How will they make money?
Listen for a company that promotes itself as way cool whiz bang Teladoc/Livongo isn’t even using way cool whiz bang diabetes technology. While Verily and United are using state of the art diabetes technology Livongo will try and compete in a smartphone world using an old-fashioned land line. Explain that one.
The bottom line here is this $18.5 BILLION merger is by no means a slam dunk money maker and could well end up as one the biggest most costly blunders EVER. Just as diabetes management isn’t about the how to, the business of diabetes coaching isn’t about way cool whiz bang it’s about money. The fact is this business and how money is actually made is changing rapidly. The combination of Teladoc and Livongo may seem like the right thing at the right time but at $18.5 BILLION combined with the developing competitive dynamic this deal keeps looking worse not better.