Who will get it?

Who will get it?

This morning we noted that Dexcom (NASDAQ:DXCM) was one of the few diabetes device companies that gets it. Dexcom is not just successful because they put the needs of the patient first or that they have the best product in their category. What separates Dexcom from the crowd is they understand that it’s not about the data, it’s about turning this data into patient relevant, actionable information. That if all this data is to be truly transformational it must result in better patient outcomes.

As we have noted for some time getting the data is actually the easy part of the equation. The hard part is making this data impactful for the patient. This is exactly where Dexcom is headed and their partnership with Google is a huge step in that direction. Many look at the partnership as means to bring continuous monitoring to the masses, to develop an ultra-low cost, easy to use system that would be used by all patients with diabetes and not just those using insulin. This is just half the story.

The fact is it really doesn’t matter what therapy option a patient follows if this data is not impactful. The real value in the Google partnership is what Google brings to the table in terms of data analytics. Google understands the value of data or more appropriately how to monetize data. Google did not just make searching the web easier, heck Yahoo can do that. What made Google the preferred search engine is their ability to transform data into action.

In the old days diabetes device companies basically made money by selling more stuff. It was a product driven business. Back then data didn’t mean all that much as long as the patient bought more test strips, insulin pen needles, and infusion sets, etc.

Yet as we move towards outcomes based reimbursement selling more stuff will be directly tied to data, or as we noted transforming data into patient relevant, actionable information which results in better outcomes. This has always been the promise of interconnected diabetes management (IDM), that with the data now in the cloud the patient’s healthcare team could not just interrupt the data but relay back to the patient recommendations on how they can better manage their diabetes.

What Dexcom and Google are developing aren’t just better tools to gather and transmit data but a diabetes ecosystem which will transform all this data into actionable information. Now many, including Diabetic Investor, have noted that this ecosystem will be the most impactful for insulin using patients as they can take immediate steps based on the recommendations they receive. Yet the information can also be impactful for non-insulin using patients just in a different way.

One of the biggest problems facing diabetes is the treat to failure mentality. This is particularly true for non-insulin using patients as physicians tend to rely on A1C readings to measure whether a therapy option is working or not. However as valuable as A1C readings are they don’t tell the whole story. A1C tells the physician nothing about a patients glycemic variability nor does it reveal when therapy options are failing as it is basically looking at the past not the present. Additionally to get an A1C requires a blood draw which means a visit to a clinic or the physician’s office.

Think what it would mean to a physician if they knew without an A1C test that a patient’s therapy regimen wasn’t working. Could they not then intervene with the patient before a small problem becomes a big one? Would it not be impactful if the physician could review this data with the patient and not have to wait for tests results? A review which does not need to face to face but could be handled via email, text message or Skype. Would the physician not prescribe tools that help with this process?

Far too often when people look at IDM they forget that communications aren’t just sent to the patient but also can be shared with the physician. Now here some may say the physician does not have the time nor are they compensated for interrupting the data, a very true statement. This is why in the future data won’t be the only thing transmitted to the physician. No in the future IDM will identify problem patients plus provide recommendations to the physician. Simply put the diabetes ecosystem will do most of the heavy lifting for the physician. This ecosystem leaves the physician in the loop and understands that all therapy decisions are made between the physician and the patient. All the ecosystem really does is make consultations between the physician and patient more effective.

This is the truly exciting part of the Dexcom Google partnership as they are building not just the tools but the ecosystem which includes advanced data analytics. Simply put they are using data to sell more stuff.

The future for diabetes device companies is understanding that they only way they can sell more stuff is to turn data into patient relevant actionable information. That they can no longer just sell the hardware that gathers the data that they must sell a systems which uses the hardware they make.