Why Should Payers Spend Money on Digital Diabetes Solutions?

PHTI’s recent report is rubbing salt into the wound. But as the report’s limitations surface, ROI for the customers of digital diabetes solutions comes under scrutiny. Vendors must make their ROI statements more transparent. Diversification strategies for digital diabetes businesses become an essential lever.

The recent report published by PHTI argues that digital diabetes management solutions are not living up to their promises regarding cost savings and long-term health outcomes. The report took a look at 8 digital health companies with Type 2 diabetes (T2D) management services, including DarioHealth, Omada Health, Glooko, Perry Health, Livongo by Teladoc, Onduo by Verily, Virta Health, and Vida Health, and scrutinized the clinical evidence and health economic outcomes of their solutions for T2D management.

While the research has conducted a valuable deep-dive analysis and proposed several valid points for the payers to pay attention to when evaluating digital diabetes solutions, it is important to note that it has several limitations:

• Small sample size and predictive models: The study, as noted by the DTx Alliance, relies on small sample size and predictive models for cost savings, disregarding readily available real-world evidence.
• Missing the long-term cost savings: Research2Guidance also points out the report’s lack of rigorous analysis of the long-term cost savings of digital diabetes solutions. These solutions typically take a holistic approach to metabolic and cardiovascular health, to adopt and sustain healthy behaviours to continuously decrease HbA1C levels. This approach also reduces costs associated with other chronic conditions in the Type 2 diabetes population in the long term, which is neglected in PHTI’s report.

What are the next steps and options for service-play digital diabetes solution providers?

The long-term positive health outcomes of digital diabetes solutions have been multiple times proven by the industry’s frontrunners.

Nevertheless, the service-play digital diabetes solution providers (offering data tracking, educational modules, coaching, digital therapeutics etc.) must make their return on investment (ROI) cases more transparent and sharpen their business cases for the payers to remain competitive in the evolving digital diabetes market.

There are 5 diversification strategies that can be explored by the service-play digital diabetes solution providers to improve their ROI cases for payers and other clients:

Expanding with GLP-1 focused care offers:

One promising avenue is to capitalize on the increasing trend of tailored services for users of GLP-1 drugs. GLP-1 medications, while effective in managing diabetes and supporting weight loss, can be highly expensive for health plans and employer-payers. By implementing a service model as a gatekeeper, digital diabetes companies can collaborate with payers to ensure that these medications are recommended for the members, if necessary, thereby optimizing the solutions’ cost-effectiveness and ensuring better patient outcomes.

Several service-play digital diabetes solution providers like DarioHealth, Welldoc, and Lark Health have already launched their GLP-1 focused services. Omada Health and its partner Express Script have also shared some of the early success results from Omada’s Prevention program members who used Wegovy or Saxenda. (Refer to “Are GLP-1 Apps the Breakthrough for Companion Solutions?” if you like to learn more)

Diversifying with other chronic conditions:

Another option is to expand service offerings to address other comorbidities associated with diabetes, as also mentioned by Allis Health’s article. Many individuals with diabetes also suffer from conditions such as hypertension, heart disease, chronic kidney disease, and mental health issues. By broadening their scope to include comprehensive care for these conditions, digital diabetes solution providers can offer more holistic and personalized solutions to their payer clients and their members.

This approach may involve partnerships with other digital health service providers (Onduo by Verily & Sword Health in 2022) or Pharma companies (Health2Sync & AstraZeneca in 2022) specialized in these areas. Furthermore, companies can also consider strategic acquisitions. For example, DarioHealth has expanded its diabetes-focused platform to other disease areas through acquisitions of several companies in mental health and MSK.

Capitalizing on the extensive digital biomarkers datasets:

In 2021, One Drop announced AI-powered programs designed to help with predicting trends in glucose and blood pressure levels in advance, thanks to the vast amount of data points One Drop has collected. In the same year, Omada Health announced the launch of its Insights Labs, leveraging billions of data points collected from Omada members, to innovate its platform and offerings across 5 health conditions. Using the already existing biomarker datasets to launch new services for other conditions or improving the existing ones allows service-play digital diabetes solution providers to enhance the value proposition for clients and expand their market reach.

Exploring new business models:

Digital diabetes service providers must explore innovative business models to further diversify their offerings and revenue streams. One avenue is to focus on remote patient monitoring, leveraging connected devices and real-time data analytics to provide proactive and personalized care for the members of their clients. Additionally, considering prescription-based business models, particularly in European markets with favourable reimbursement policies for digital therapeutics, presents an opportunity to monetize solutions in different country markets, and diversify client portfolios while enhancing accessibility for patients.

Developing deployment processes for the solutions:

Companies must prioritize effective deployment strategies to facilitate clients in realizing the full benefits and cost savings of their digital diabetes solutions. This involves implementing state-of-the-art processes for patient authentication, onboarding, coaching, program extension, and closure. Streamlining these deployment procedures ensures seamless integration and utilization of digital diabetes solutions, ultimately maximizing their impact and value for clients.

Vendors must keep refining and improving the ROI cases for digital diabetes solutions and their clients, to ensure an increasing number of contracts in the future. Together with the long-term positive health outcomes of digital diabetes solutions, the benefits from diversification must be taken into the ROI calculations.

Research2Guidance has been constantly monitoring the global digital health industry since 2010. We provide strategic advice for how to build and grow a successful digital health business within all therapeutic areas, business models, and regions. We are happy to talk and share our experience! For more information reach out at [email protected]