Thomas Goetz, founder of digital health startup Iodine, recently took to Inc.com to suggest that healthcare disruption may never happen. Far too many entrepreneurs have learned the hard way that “healthcare is different,” burning through their venture capital without achieving even modest change. Now the rusted-out carcasses of the shiny objects they tried to peddle litter the long, desolate, mirage-filled road to healthcare transformation.
Goetz notes that digital health innovations that do stick tend to fill a niche. One is improving access to doctors, as is witnessed by the steady growth of retail health, telehealth, urgent care, and doctor-finding apps such as Healthgrades, Vitals, and ZocDoc. Another is chronic condition management, which happens to be a major concern of all key industry stakeholders (providers, payers, employers, government agencies, and patients) but arguably a core competency of none of them.
Over the last year or so, Chilmark Research has seen substantial activity in the market for condition management solutions. These apps and devices help people manage both the day-to-day symptoms and the long-term lifestyle changes associated with asthma, diabetes, hypertension, and mental health diagnoses, among other conditions.
Market activity shows little sign of slowing, given the confluence of the following factors:
- The certification of the 16-week Diabetes Prevention Program and the extension of the DPP to cover digitized versions.
- Growing employer and payer interest in managing chronic conditions – especially those that can be staved off or even prevented through lifestyle change – in order to control costs.
- Increasing skepticism about the effectiveness of workplace wellness programs, which has led employers to look for solutions with more demonstrable outcomes and savings.
- The omnipresent impact of demographics. Americans are aging, and as we age our health diminishes and co-morbidities often increase, no matter what we may claim to the contrary.
- The ongoing shift to coordinated, value-based care – albeit on a small scale, at times at a glacial speed, and often involving primarily the most forward-thinking healthcare organizations (HCOs).
- The crushing cost of chronic disease treatment, which the Partnership to Fight Chronic Disease estimates at $2 trillion between now and 2030.
As our upcoming Market Scan Report describes, condition management represents a key opportunity to address patient engagement as payer and provider service lines continue to converge. Under value-based care and shared-risk models, both payers and providers want to better manage high-cost and high-risk patients in order to reduce costs while improving steerage and utilization management.
A niche, yes – but a big one
If there’s a reason for pause, it’s that condition management companies remain “vendors to the giants,” as Goetz put it. They sell primarily to large health plans, large employers, and large HCOs (who typically happen to be the aforementioned forward-thinking ones). Put another way, these vendors operate in the same business-to-business-to-consumer model that got healthcare into its bind in the first place.
In this model, it’s all too easy to misplace priorities or spread programs thin, as is evidenced by a recent stream of promotional emails from my insurer, asking why a 15-time marathon finisher and hiking enthusiast hadn’t signed up to participate in a well-known third-party prediabetes management program. Old habits – spray-and-pray outreach, volume-based enrollment goals, and messaging that’s equally generic, rigid, and halfhearted – die hard.
At the same time, it’s hard to blame vendors. For starters, healthcare needs practical fixes, not delusions of grandeur and the demonstrated success of pragmatic, methodical condition management will (hopefully) overshadow the short-term silliness of non-solutions with “business plans” and burn rates that would make a mid-1990s entrepreneur blush.
Condition management vendors may currently occupy a niche, but it’s a niche that’s only going to get bigger. (Remember, one in three American adults is prediabetic, but 90 percent don’t know it.) They aim to bring digital health to those who need it most, and they understand that success is much more than a diagnosis and a discharge, which is emblematic of the reactive approach to condition management all too common among HCOs and care management vendors under fee-for-service models.
It’s a value proposition that aligns with the tenets of value-based care, the Quadruple Aim, and payer-provider convergence – not to mention the wants and needs of patients who prefer honest-to-goodness solutions to one-off shiny objects. As condition management vendors continue to sell to the giants, they will prove their viability to HCOs and demonstrate that healthcare disruption is, in fact, possible.
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