Will outcomes finally matter?
The big news today is the report that Amazon, Berkshire Hathaway and JP Morgan are teaming up to form an independent healthcare company to serve their employees in the United States. It goes without saying that this effort by these three heavyweights could alter the landscape and forever change how employees are covered. According to a New York Times article;
“The three companies provided few details about their new entity, other than saying it would initially focus on technology to provide simplified, high-quality healthcare for their employees and their families, at a reasonable cost. They said the initiative, which is in the early planning stages, would be a long-term effort “free from profit-making incentives and constraints.”
Listen it’s no secret that Amazon is making the deep dive into diabetes. Nor is it any secret that Amazon has the power to turn markets upside down. The company has already teamed up with Merck (NYSE: MRK) to bring Alexa into the mix. They also have the infrastructure in place to deliver diabetes medications and supplies right to the doorstep of their employees with diabetes. Many have speculated that it’s just a matter of time before Amazon does to retail pharmacies what they done to traditional brick and mortar retailers.
Fans of disruptive technology Amazon and their partners could be the first employers to offer their employees with diabetes financial incentives when they achieve better control. It would not surprise us at all that to help these employees these powerhouses embrace interconnected diabetes management in a way never imagined.
Even better these companies would not have to invent anything as the technology already exists to make this possible. The difference would be that unlike others they would embrace this technology plus add in incentives so that their employees would use it. We have long advocated the use of financial incentives to induce patients. That these types of incentives matter more to patients than the esoteric concept of “better” outcomes. As we have said many times most patients do not see, feel or touch “better” outcomes but they sure as hell see, feel and can touch saving money.
Think for a moment what would happen if these giants adopted CGM technology for all their employees with diabetes and not just those who use insulin. Think for a moment if they like us see CGM as the most transformative technology in diabetes. The benefits of CGM technology with insulin using patients is well documented. Yet, signs are emerging that this technology also benefits non-insulin using patients. And more data is on its way as Dexcom (NASDAQ: DXCM) has partnered with UnitedHealthCare to examine CGM usage with Type 2 patients.
We could imagine these players eliminating co-payments when their employees hit certain targets. We could further imagine lower premiums paid based on these same targets. The real difference here is one of perspective. With traditional payors decisions are not made for what’s best for the patient but what’s the lowest cost possible. For a payor and patients with diabetes it’s manage them as cheaply as possible outcomes be damned. These companies could change the paradigm making outcomes not cost their primary goal understanding full well costs will decrease as their employees achieve better outcomes.
Unlike a traditional payor these companies know their employees will be employed for long periods of time and the high cost of diabetes complications come after the patient has been out of control for an extended period. Since a traditional payor only has the patient for 24 to 36 months they are playing somewhat of game, banking that expensive complications will come after the patient has left the plan and is someone else’s problem.
It would ironic if these companies working together became the first to fully adopt a true diabetes management system. A system built on the premise that better outcomes not saving money in the short term is the goal. A system which understood the complexities of diabetes management yet gives the patient time to identify issues then gives them more time to fix these issues. A system which not only provides the patient easy access to the tools that will help them but also motivates them to do all the heavy lifting.
The biggest obstacle to interconnected diabetes management has never been whether it works or not. No, the biggest obstacle has been getting the patient to adopt this technology. Then keeping them motivated as they move forward. As Momma Kliff used to say; “You cannot solve long-term problems with a short-term perspective.”