Years ago, before the invention of CGM we conducted an experiment. We visited several local pharmacies told the pharmacist that we were a newly diagnosed patient and our physician told us to get a meter. We asked of all the meters available which was the best. After getting a response we then asked which was the cheapest and what the difference was between the one the pharmacist recommended and the cheapest meter. The answer was pretty much what we expected that there really wasn’t that much difference between the meters as they all do basically the same thing the same way.
It was at that point we knew the conventional meter market was doomed as it was basically a commodity market and in a commodity market price trumps performance.
Although CGM hasn’t yet replaced conventional BGM that day is coming but that hasn’t stopped conventional BGM from reinventing themselves. Today it is no longer good enough to deliver an accurate reading it’s now commonplace that the meter talk with an app and that app then helps the patient better manage their diabetes.
Livongo, OneDrop, My Dario and a host of others have built their entire business model around this concept. These companies are not just target individual patients but employers too offering diabetes management programs for employees with diabetes. The theory is companies will save money with their employees under better control. That their employees will be more productive as they won’t be missing work due to their diabetes.
Now we hate to burst anyone’s bubble, but this is NOT a new concept as these are the same programs, we used to call disease management. Back in the day before everyone had a smartphone and connected meter disease management companies would call patients reminding them to test their levels, take their pills, etc. As we have said many times these new companies are basically disease management companies using updated technology.
Companies that will run into the same problems these now defunct disease management companies ran into. Back then we noted that the cost savings promised by disease management companies came from keeping patients out of the hospital or put another way getting insulin using patients to dose their insulin properly. (Sounds familiar doesn’t it.) As we said way back in the day why would any company use these programs for all their employees with diabetes when they savings generated came strictly from insulin using patients who are easy to identify.
The second problem was for non-insulin using patients these programs could not solve the biggest obstacle between non-insulin patients and better outcomes. medication adherence. We know these companies want to make it seem like managing diabetes is complex, the truth is for non-insulin using patients it’s pretty simple. No amount of data analytics or coaching has been able to solve this problem. There is no hard evidence to suggest that these non-insulin patients are any better today than they were 5 or 10 years ago.
Frankly we weren’t surprised that employers quickly figured out there was no reason to pay for non-insulin patients to be part of the disease management program. Unlike insulin using patients there was no real return on investment. It’s also the reason all these disease management companies have fallen by the wayside only to be reinvented as diabetes coaching companies who are about to run into the same problems.
It’s no secret that we think companies like Livongo and OneDrop are incredibly overvalued. That just as disease management companies came and went, these diabetes coaching companies will come and go. Here’s why;
1. CGM – Insulin Dosing Algorithms – Whether it’s a Tyler or insulin pump CGM and insulin dosing algorithms will do for insulin using patients what Livongo and OneDrop are attempting to do. Why any employer would pay Livongo or OneDrop to do what this technology does remains mystery to us.
2. GLP-1’s – There is a reason the GLP-1 market continues to grow as it’s an effective and very patient friendly treatment. As we accurately predicted GLP-1 usage would increase with each improvement which is exactly what happened. What was once a twice-daily injection has now become a once-weekly injection. Soon we will have an oral GLP-1 plus systems like the Intracia exenatide micropump which will make this therapy option even more patient friendly.
3. Medication adherence remains the biggest obstacle of all and even with all this way cool whiz bang technology combined with coaching that problem has not been solved. Even with text messages reminding patients to take their drugs medication adherence remains the biggest problem. What these companies never talk about but what’s very true with non-insulin patients is you can lead them to water, but you cannot make them drink it.
The reality here is that employers have fallen in love with the toys in the toy chest. Like so many others they think that whiz bang way cool technology is the answer. Yet what they will soon discover is all the way cool whiz bang technology in the world cannot solve a problem that has been plaguing diabetes since the discovery of diabetes. That no amount of technology improves medication adherence. That no amount of technology can help patients who have a chronic disease they do not understand, do not want and takes work to manage properly.
Making matters worse with so many companies offering these programs costs are likely to decrease. Soon companies like Livongo will not only have to contend with the issues we have already identified but increased competition which will force them to lower prices or take on a greater share of the risk. Already companies are moving to outcomes based contracting only getting paid for results.
A move which is great for employers but not so great for the providers. A move which forces the provider to concentrate more on insulin using patients as they are the low hanging fruit when it comes to delivering cost savings. Yet this is also the same group of patients which will actually benefit from newer more sophisticated cheaper technology therefore making coaching unnecessary. Again, why pay for something that isn’t needed it doesn’t make any sense.
As we said before Livongo will likely have a successful IPO as everyone is enamored with the technology. They see diabetes growing at epidemic rates and see that the majority of patients are not under good control. Yet what they don’t see is this isn’t a new phenonium nor are these programs new either. All this is, is old fashioned disease management put in a shiny new box. That even in a shiny new box it will run into the same problem’s disease management did.
Alternate site testing, faster test results and connectivity didn’t prevent the BGM market from collapsing nor will these programs. Market forces, good old-fashioned competition and more advanced more sophisticated technology will take away their target market, insulin using patients. This leaves the much larger yet much tougher group non-insulin patients. As GLP-1 usage continues to increase this will become a smaller group, leaving patients on orals alone as the sole group which needs help.
Try as they might none of these companies will find the true Holy Grail in diabetes, getting these patients to take their meds. This has been and continues to be the biggest obstacle standing between this patient group and better outcomes. And no amount of technology can or will solve this problem.
We’ve said it before and will say it again providing the how to manage diabetes is the easy part, getting the patient to WANT TO MANAGE THEIR DIABETES remains the hard part.