Today, Europe has become an attractive healthcare market for digital health providers. Getting a digital health solution reimbursed is still the gold standard for monetization. But how to get a digital health solution into the reimbursement system in the continent and what makes a digital health solution attractive for an insurer to pay for it?
At GIANT Health European Health Tech Innovation Week, Research2Guidance’s team together with renowned speakers from Oviva, OnlineDoctor, SilverCloud Health, ORCHA and CSS, discussed the current status of the reimbursement opportunity in the EU countries and why is getting reimbursed the number one go-to-market channel for digital health solutions, is DiGA a valid option to enter the European market, should other channels be prioritized in the next few years, and what are the key factors to win insurance companies to partner with a startup?
On May 18th 2022, Research2Guidance hosted a virtual panel discussion on “How to get a digital health solution in the reimbursement system in Europe?” with global thought leaders.
The market opportunity in Europe is big. The healthcare spending amounts to 1.3 trillion EUR, which on average represents around 10% of GDP of the European economy. One of the specifics of the European market and culture is that Europeans do not like to pay out of pocket for healthcare. According to WHO the share of out-of-pocket spending is roughly 16% which ranges between different countries, the lowest end in France with 9% and the highest in Bulgaria with 39%. Because of these nuances digital health companies are eager to get and be paid one way or another by the healthcare systems.
The European market is very fragmented and one of the biggest challenges that digital health companies are facing is that they must be familiar with different health systems, regulations and consider various market entry options and select appropriate distribution channels to achieve higher outreach among HCPs and patients in the selected European markets.
Germany is the first country in the EU to have implemented a standardized process for digital health apps to be prescribed by a physician / psychotherapist and reimbursed by the statutory health insurance. DiGA is a great opportunity for digital health providers aiming to enter the German market, as it opens the door to 73 million public health insured German residents and provides both a reimbursement model and a quality stamp. As of today, several EU countries have implemented, like Belgium or want to implement, like France a similar assessment framework to evaluate digital health apps and to provide a direct access to the public reimbursement system. Still the majority of EU countries have not yet shown an interest in providing a standardized process for digital health services into their statutory health insurance system. In these countries different go-to-market strategies must be selected to enter the market and have a successful adoption of the solution.
The extensive research conducted by Research2Guidance’s team, categorized EU countries into 4 groups based on the reimbursement process status by the public health insurance system and showed that Germany, Belgium and France have more than 149 million public health insured citizens and are the most attractive markets to enter the reimbursement system in Europe.
These are just some of the opening facts and food for thought shared by the moderator Ralf Jahns, MD of Research2Guidance.
A spontaneous discussion evolved thanks to thoughts, market views and business cases from
that demonstrated unique business models and service offerings, as well as a payor view on benefits it sees from partnering with digital health innovators and challenges currently facing in the market.
To set up further the scene and spark an engaging conversation in his presentation Ralf also touched upon
THE FOUR KEY PATHWAYS FOR DIGITAL HEALTH COMPANIES TO GET DIGITAL HEALTH SOLUTIONS INTO THE PUBLIC / PRIVATE REIMBURSEMENT
Digital health companies have 4 main channels that they can choose from to make money with their digital health solutions.
Selective contracts – it is one of the most popular and used channels to get a digital health solution reimbursed.
Digital health codes – introduced by the regulators specifically and mainly throughout the pandemic. Most of these codes refer to telehealth services and in some cases to RPM. Those codes will allow to be paid for the actual service and remote consultation but also for the software that has been used in order to provide the service.
Reimbursement code engineering – Making use of existing codes and building a digital health solution around them.
Regulator listing – different approaches organized by country regulators to create a standardized process to have digital health solutions reimbursed by the healthcare system. In Germany, there is DiGA, and in Belgium there is a health pyramid.
The German DiGA process started 2 years ago and today we are looking at 33 digital health apps that could be prescribed by doctors and first reports are showing that the uptake is rather limited. One reason for that is the expected slow adoption among HCPs, who must incorporate digital health solutions into their daily routines.
“DiGA is hyped but after almost two years listed companies report just a few DiGA prescriptions per day. This will grow but digital health companies must be aware of other channels into the reimbursement process of a country” Ralf-Gordon Jahns, MD, Research2Guidance
In Europe almost every person is covered by health insurance. For a lot of companies reimbursement is seen as the only option to get their application monetized. But is it so?
On this panel leading digital health companies have chosen different business models and market entry options to enter specific European markets successfully. Let’s see what they are!
Oviva, a top European digital health market player that digitizes the treatment of type 2 diabetes and obesity through a unique behaviour change platform
The company is active in 4 countries, such as the UK, Germany, Switzerland and France.
“Oviva is about delivering better patient care & outcomes while reducing healthcare costs. If you do that well, reimbursement is accessible over time.” Kai Eberhardt, CEO, Oviva
More than 300 000 patients are treated by Oviva. The solution is prescribed by doctors and provide fully remote app-based care and a hybrid solution combining digital and in-person coaching care.
It is a perfect example showcasing successfully all four of the above-mentioned market entry pathways and in each case their digital solution is reimbursed. The company has managed to adopt itself to current healthcare codes, has a DiGA Oviva Direkt, it works with existing budgets, and it has selective contracts, one of their partners is in fact CSS in Switzerland. According to Kai “one has to go with the formats that are available rather than hoping to somehow reshape the system”.
OnlineDoctor, the foremost provider of teledermatology in DACH region
The asynchronous approach of the “store and forward” technology which is the teledermatology service offered by OnlineDoctor is not covered by the regulator currently in Germany. The company key reimbursement path is via selective contracts. In Germany the company works with over 50 statutory health insurers that make their service available to their members. Hence more than 25 million patients can already use OnlineDoctor free of charge. The contracts with private health insurance are straightforward from a regulatory perspective as they are forced to fully reimburse the service towards the patient which provides roughly additional 10 million patients that can use the service again free of charge.
“OnlineDoctor is successful in winning health insurance companies as customers because we position ourselves as a long-term development partner and take the individual strategies of the health insurance companies into account.” Dr. Philipp Wustrow, Co-Founder, OnlineDoctor
From a strategic perspective and unlike some teledermatology companies, OnlineDoctor has an exclusive partnership agreement with Professional Association of German Dermatologists. As of today, more than 600 experienced specialists / dermatologists use on daily basis the platform. It is also the only teledermatology provider classified as a medical device.
In Switzerland the skin check can’t be covered by the basic insurance. The solution found by OnlineDoctor was a supplementary outpatient insurance product where the digital skin check is integrated. In this case the service could be available at discount to up to 90% towards the patient. Many insurance companies that the company partners with provide the service at reduced cost and advertise it towards their members. One of the partners of OnlineDoctor is CSS.
SilverCloud Health, a prominent and trusted on-demand virtual mental health platform – delivering proven clinical outcomes at scale in UK and Ireland, part of Amwell
The company is the leader in digital mental health space covering 12 million lives in half dozen countries. With over 18 years of academic and clinical research, SilverCloud is the industry leader in internet-delivered CBT (Cognitive Behavioral Therapy) solutions.
The UK system is different. On a local, regional and national basis there are different ways to sell to the NHS. SilverClouds partners with different NHS Foundation Trusts. The company is also currently offered through corporates and insurance – private medical insurance, private health providers, employers, etc. And this is just in the UK.
Speaking of the UK and moving from the digital health innovators on the panel we heard from
ORCHA, a global leader in providing access to trusted digital health technologies, having reviewed more digital health products than anyone in the world
The company has built an agile end-to-end technology that allows them to review and certify digital health technology at unmatched speed. ORCHA works with different organizations and governments and provides safe, accredited, compliant and trusted digital health libraries, which today hold 9,000 assessed products for health and care professionals to accurately prescribe to patients. Some of their clients are Public Health England, MHRA, NHS Digital, Mental Health Commission of Canada and the American Telemedicine Association.
“The work we did at a national level was to help the NHS to create a reimbursement model. So really, what would be the gateway conditions for Digital Health Technologies to go through an application process that would narrow down the applicants to a manageable level.” Tim Andrews, Chief Operating Officer and Co-Founder, ORCHA
Having a quality stamp from ORCHA could act as a differentiator and position better digital health startups in front of health systems and insurers.
The lively market picture was completed by an interesting insights and payor perspective from Switzerland,
CSS, a leading health insurer regarding the size in Switzerland and industry leader in innovation.
The Swiss health system is different from other countries. Payors see a great potential in DTx for patients and for the entire health system. But there are no digital health codes and there is no regulator listing like DiGA. The basic insurance is mandatory for everyone and covers an emergency, regular doctor visits and most medications. Within the basic insurance a payor, CSS is restricted to what they reimburse and at what amount. On top one can have supplementary insurance which covers various spectrums of benefits, like alternative therapies, higher standard of in-patient care, medication, etc.
In Switzerland there is a creation of national wide ecosystem platform where different payors are providing platform for digital health applications. And potentially this provides opportunities for startups.
THE WAY TO GO FOR STARTUPS IN SWITZERLAND RIGHT NOW
The way CSS successfully partners with digital health companies, like Oviva and OnlineDoctor is via selective contracts. There is a payment by supplementary health insurance. For a startup the issue could come from scalability. There are 60 health insurance companies on the market. CSS has 15% market share.
At this moment the hurdle for payors is to find and design the reimbursement reengineering. There are a lot of initiatives going on about reimbursement and basic insurance, that are broad to a political level and directed to regulators. No matter whether there is a Pharma, a startup or a payor, there is a need for pathways with applicable criteria for reimbursement in the basic insurance, whether it will be digital codes or regulator listings.
“In order to leverage the great potential of DTx for patients in Switzerland, we are currently exploring options of reimbursement with other payers, start-ups & health service providers.” Michèle Mühlemann-Hasler, Innovation Manager, CSS
Final thoughts …
Getting their digital health app prescribed by an HCP and being reimbursed by health insurance and health systems is what digital health market players want. The opportunity that DiGA in Germany offers a nearly universal reimbursement is unique worldwide.
The model is a smart and innovative way that tries to achieve the right thing to integrate digital services into the health system while making sure that there is significant evidence that the solution is working and will bring positive health outcomes.
“DiGA is not just a market access as an FDA regulator in the US, but it is also reimbursement for 90% of the population and this gives a basis to drive patients flow in a fundamentally different way and that is very attractive.” Kai Eberhardt, Oviva
Today in Europe, there is also a standardized process in Belgium, and one is coming in France which is a positive matter. In all of it, the role that doctors play is a key. If they do not prescribe the solution to the patient, no one is going to use it. For OnlineDoctor, which is outside DiGA, doctors are a key lead channel and their collaboration with them leads to their solution being recommended by the doctor to the patient and used by the latter.
“DiGA is a very interesting concept although you still need the gatekeeper – the doctor to prescribe DiGA. And when it comes to selective contracts patients can immediately access those digital health services free of charge.” Dr. Wustrow, OnlineDoctor
Europe is an attractive market for digital health market players and a market that offers great opportunities, but it is a fragmented market. Companies will therefore have to develop comprehensive market entry strategies and select appropriate distribution channels for each desired European market to achieve success and higher adoption of their solutions / services.
At R2G, we would like to Thank our speaker guests for their insights and business cases. We welcome any opportunity to discuss and exchange opinions about innovation and partner integration, actionable market entry strategies and building profitable digital health ecosystems.