Find out what the “who’s who” of health innovation are talking about, and get the latest on what’s shaping the burgeoning health tech market and the future of health.
Presenter: Jessica DaMassa, Executive Producer & Host of WTFHealth
Hello, everyone. Good afternoon, good morning, depending on your time zone, I guess. Thanks for attending the George Washington University’s Online Healthcare MBA’s Live Talk Webinar with special guest, Jessica DeMassa, from What’s The Future Health. I’m Kira, your moderator for today.
So before we meet our speaker, let’s go over some housekeeping items. Our event is currently in listen only mode, so questions or comments can be sent to me anytime via the Q&A window, it’s the purple icon on your menu. Other functions available to you are the technical FAQs, slides, and media player, booking an appointment to speak with an admissions coach, and speaker bio if you’d like to read up on your presenter’s full bio today.
Now, I’d like to introduce you to our guest speaker, Jessica DeMassa, is a reporter who hosts a video interview series on healthcare innovation called WTF Health, What’s the Future Health. Her content runs on YouTube and a very popular healthcare business, technology, and policy blog, The Healthcare Blog. For a predominant B2B audience, she usually covers health technology and the business of healthcare innovation, however, is now working on a special series spotlighting healthcare organizations in response to COVID-19 which started with an interview with former CTO of HHS, Bruce Greenstein. Jessica has also spoken to more than 1,000 leaders in healthcare around the world over the past four years, including NG’s [inaudible 00:01:45] Molly Coy of AVIA, and investors from Venrock and Softbank, and the CEOs of all the most successful healthcare startups and so on. Her show is underwritten by sponsors like Guidewell, holding company for Florida’s BCBS Plan, Bayer, Teledot, and [inaudible 00:02:08].
So Jessica, welcome. Thank you so much, audience.
Hi, I’m Jessica DeMassa, nice to meet everybody. Kira, thank you for the introduction. I’ll introduce myself a little bit more first but before we get started, I… well first of all, it’s so odd to talk to just a purely digital audience and I suppose we need to get used to it, but I wanted to do a little poll here and ask you about how familiar you are, first of all, with the wide world of health technology and innovation. So I’m going to push out this poll here, hopefully I did this right, hopefully Kira will acknowledge if I have not, but if you guys will just let me know-
… how familiar you are with digital health. Thank you. How familiar you are with digital health and the health tech sector. I’m really curious to just know where you guys stand with this. Great, one person has responded. I know, I need you to click on something, this is terrible, right? We can watch those poll results come in, I’ll give you a few more seconds here to do that but like I said, I just wanted to get a sense, being as I can’t take a look at the room and see all of your smiling, nodding faces, how many of you have an idea of what’s going on in digital health and the health tech sector. We’ll give it two more seconds here. Two, one.
All right, we did about halfway here. So, I’ll push the results to this live here. So, basically what we’re looking at is, okay, so most of you are somewhat familiar, which is great. And for those you who this is all new to you, or you’ve only heard a few things about health tech and digital health, I’m hoping that I will give you enough of an insider view of this so that you have a sense of really what’s going on in this space. And thanks for jumping out of what you’re comfort zone is, and hearing about some of the stuff that’s new and exciting in terms of the world of health tech.
So, what I’m going to talk to you about is exactly that. Right? It’s the buzz of what’s happening in health innovation. As Kira said when she set this up and made that lovely introduction, thank you so much; I’m a health innovation reporter, and basically I have this amazing job where I get to go around the world. Here I am in Spain, and I get to talk to different people who are working on the transformation of health care. And, I last year went to, I don’t know, 15, 16 different health innovation conferences, seven different countries. And I’ve talked to, last year alone, I talked to about 150 different people who are working on health care and health innovation.
So, who am I talking to? I’m talking to the who’s who, I like to say, of the health innovation set. So, these are the movers and the shakers in terms of the people who are launching the businesses, or funding the businesses or working in the incumbent organization to help change the way that health care is being delivered, how it’s being managed, how it’s being experienced by patients. So, I talk to four major buckets of people, and I want to give you this context so that you understand what I’m talking about, the buzz, and what all the hot topics are in health tech. You know where our sources are coming from here.
My goal is to talk to the players, like I said, to kind of capture what’s going on while they’re playing the game. So, I feel like I’m, in a lot of ways, a sideline reporter in the game of health care, particularly as the market is concerned. And I’m really trying to capture state of play. So, I talk to four major categories of folks. I talk to start-ups. So, like Kira said in the intro, there’s any number of different start-up companies. I talk to little ones that have just received Angel Funding. They maybe have a pilot program in a big health care organization, all the way to those who are scaling, who are raising million dollar A Rounds, B Rounds, C Rounds, D’s. There’s a couple X I think I’ve talked to. Including those who I followed along and watched them go public. So, Levongo is one of those, watched their journey as it unfolded the last couple years.
Then, I also talk to what I would consider start-ups within some of these other health, either health care companies or consumer companies. Basically some of these healthcare verticals that have emerged out of some familiar consumer brand. So, Uber has a health care division. Lyft has a health care division. So, I talk to those folks who are leading those organizations that are kind of functioning as health care start-ups within an organization that may or may not have a health care background. Folks from CVS, some of CVS’ more innovative health care business lines, or Walmart, some of the things that they’re doing in health care.
I also talk to incumbents. So, these are the people who are like the establishment in the health care industry. I talk to people who have jobs at health plans, health systems, big pharma companies, life sciences companies. And usually the folks I talk to there are those who have an eye on business strategy. So, where is the market headed? How can we accomplish the triple aim of improving cost, quality and access to health care. Those who are helping kind of look at from a big population standpoint, how can we shift health care and move it forward, embrace more technology, adopt different business models, things like that.
I talk to investors, so those who literally have skin in the game. Lots of venture capital funds. Some of them focus entirely on health care, like Kira mentioned. And some that are not, so Softbank, Venrock. Some that have big technology platforms, and I talk to strategic investors as well. Those that are tied to maybe a health care incumbent organization. So, if a health plan has an investment arm, or a hospital system that has an investment office to it where they’re trying to specifically focus on funding the start-up companies that they’re working with and helping pilot.
I talk to accelerator programs, so those that have kind of a different way of taking equity out of a start-up in order to help them gain access to introductions, or some of those piloting opportunities. And then lastly, I would say I talk to a bucket of people I’ll throw into the health care influencer pile. So, these would be people who are helping to find policy. So, I talk to some government officials. I’ve spoke with quite a few people from HHS, Health and Human Services, specifically in their health IT vertical there, The Office of the National Coordinator for Health IT. I’ve talked to people who are influencing policy in terms of lobbying. Lots of patient advocates, I guess, would fall into that, or maybe we can consider them thought leaders. Other thought leaders who are kind of maybe analyst who are watching this space, people from consulting companies.
And then, the occasional futurist, and I always laugh when somebody introduces themselves as a futurist, because I’m always like, “I don’t know how, if that’s a label you put upon yourself or if that’s something that somebody bestow upon you.” But, I talk to the futurist to because of everything that they can bring to the table in terms of helping us understand where the health care market is headed from different directions.
And I want to say here just a little background on me. The reason I started to do this in the first place was I was sitting in an incumbent organization. I got my start at Florida Blue, which is a Blue Cross Blue Shield plan in Florida. And I had an innovation job, and I just could not learn enough about what was going on in health care innovation. Then, through a series of lucky breaks I ended up pretty much creating a position where I’m creating the type of content that I wish that I had access to so I could figure out what everybody everywhere was doing about innovation in health care.
So, like I said, I talk to all these people, and in case you are concerned that I will ever run out of content, I’m here to tell you that no, there is no way I will ever run out of content. So, in addition to all of those incumbents, and all of the people who are working on health care that may be nontraditional health care players, right now our start-up ecosystem is quite robust. If you look in Crunch Space, which is a platform that tracks not just health care start-ups, but all different kinds of start-ups in technology and different areas, retail; there are 7,611 start-ups that identify themselves as health care start-ups. So, I’ve got my work cut out to me.
And I’m talking to them so you don’t have to, and you might be wondering, “Well, what are all these people talking about when they get together?” So, I’m going to give you a high level look at some of these insider conversations just so you can get a breadth of what’s going on in the health care innovation space. And, what it is that you need to know to kind of get up to speed about what we’re talking about.
So, these are basically the under currents of every single conference, presentation, happy hour conversation, interview that I’ve done. These are the big things that people are talking about. And, the first one of these, this might surprise you, is the definition of digital health.
So, truly, we are still talking about what we are as a sector, and you’ll see I have a cute little asterisk there in the title of this because it’s digital health asterisk because there are different names applied to this sector. And really, we just can’t decide. Health tech, digital medicine, digital therapeutic, supplied health signals, telehealth, telemedicine, virtual care. The list goes on and on, and truly, I mean, some who have been in this space for a long time, I mean, will throw their hands up and say, “Forget it. None of these terms even exist. It’s all just health care. It’s all just health.” So, it’s interesting that we, as a sector, cannot even figure out how we’re defining themselves. And truly, this has become a real topic of conversation that has started to take a wonky turn here in recent times.
At the beginning of this, at this health care conference, JP Morgan health care conference, this is a big health innovation conference that’s held every single year. It used to be a bio tech conference. It started, I think, it’s over a decade old. And it started out with bio tech, and it would bring together all of the different investors who wanted to invest in the latest bio tech. Somewhere along the way this has morphed, and now it is really all of health care innovation. So, there’s a lot more digital health start-up, I think, in recent years than every before. And partly because that just, as a category, started to emerge as we started to use our smartphones more and more. And so, now this conference, it’s focused on bringing together all these different innovators and, Kristy Farr, a health innovation reporter for CNBC, publishes this article right after JP Morgan saying there’s so much confusion in hyper digital health, there’s a real danger here that the whole sector could be held back because it doesn’t know what it is.
And worst than that, those who are trying to invest in digital health, or at the health system or at the health plan, incorporate digital health solutions, don’t know what those are or what this terminology even means anymore. I mean, I think she captures the sentiment beautifully here saying, “The terms is so overused and over hyped, it’s no longer clear what it means.” So, it’s like by saying everything, we’ve said nothing at all. And I think this pretty much illustrates the point on this slide here.
So, what you’re looking at now, these are 150 digital health companies that were pulled out by CB Insights. And CB Insights is part of Crunch Space, which I showed you before. And what they’ve done here, this is the end of last year, top digital health companies. And if you look at some of these categories, the labels for each of the little boxes in the upper left hand corner in black, I mean, look at how diverse this is. I mean, you have everything from what’s digital therapeutics over there on the upper left. So, these are digital tools that may be smartphone apps that help people manage chronic conditions like diabetes or asthma, or high blood pressure. Some of these are mental health tools. You have everything from these digital therapeutics, all the way to the bottom right hand corner of this slide where you look at the drug company stuff. I mean, digital health companies are helping with clinical trials. So, helping match pharma companies with people who can trial their drugs, all the way to adding real life evidence into it. So, hey, in addition to getting the research done around whether or not the placebo is failed or working, you can augment in with wearable data, data that’s collected from [inaudible 00:14:54] or from an Apple Watch, things like that.
Then, all the way up at the top here, in the middle, you’ve got a health insurance. How is this… Oscar is considered a digital health company. So, I mean, the fact that this category, digital health, is lumped over basically anything that includes health and technology is really not doing us any favors. So, there’s been a scrambling to kind of carve out a place and what this is.
So, this is actually a definition. This is one of the first things I actually really saw published about what is digital health, is this came out from the Digital Therapeutic Alliance at the end of last year in November. And they’re looking to carve out digital therapeutics from digital medicine from the broader digital health category. So, the way they’re defining this, I mean, this is not easy here, right? This is like a nine column chart we’re looking at; is they’re looking at how do you define this in order to look at what kind of clinical evidence is required? And what kind of regulatory oversight is there? So, they want to carve out their little piece of this so that there are different strata within digital health.
Another definition issued, HIMSS, which is a huge health IT organization, they really provide… I would say they’re the professional organization for health information technology. So, really focused on the world of EMRs, and basically things adjacent to that, focus specifically on IT, data exchange, patient record, things like that. They’ve weighed in with a definition of digital health, which if you look at this, it’s basically anything that strategically leverages digital tools, technologies and services to transform care.
I mean, that could be me and an Excel spreadsheet, I mean, for all they know. I mean, they’re really providing… This is so broad. Everything falls into this bucket. Then, just the other day, this is the end of last week on this whole COVID-19 crisis, we’ve got the WHO, the World Health Organization, weighing in with a definition of digital health. And part of this is related to the fact they’ve issued guidance now on how health systems around the world can integrate digital health in order to sure up their traditional health care system. But, they had to start at the beginning and define what falls into a digital health solution.
So, if you look at this, they’ve got to go back, I mean, pulling up vocabulary terms I haven’t heard in years. So, they’ve started, they took a running start, here at E-Health, and then defined E-Health. And then, M-Health with an E-Health. And then within M-Health, now they’re saying, here’s where digital health is. And if you look at this, the last line of this, they’re basically looking at the things that are in E-Health and M-Health, plus any advance computing sciences, and big data genomics and artificial intelligence.
So, I mean, all three of these definitions, even now, completely confusing. And I mean, we’re lumping in a lot of disparate things and the problem becomes the definition is going to start to matter. In fact, it already matters. And the reason it matters so much, to me, is three fold. And it’s three linked ideas here. The first one is reputation.
So, what you’re looking at right now, this is a very controversial quote. So, Dr. James Madeira, he’s the CEO of The American Medical Association. I’m sure if you’re in health care, you’re familiar with the AMA. So, at one point, this is back in 2016, really a year that there was just an explosion in terms of digital health application. It’s like think back to where we were in 2016, it’s like the smartphone was the coolest thing. I mean, [inaudible 00:18:38] which version of the iPhone at that point.
But, basically Madeira calls digital health the snake oil of the 21st century. I’m in this sector of the industry, and he’s kind of right. And a lot of us had to do with the fact that there is just such a variety in terms of how much validation, how much clinical evidence there was to support some of these digital tools and the claims they were making. There’s such a gap on that. I mean, the range of that is just tremendous, and so the range in terms of ethicacy and validity, and regulatory over it, really, I think, put doctors in particular in a tough spot. Because patients are coming in and talking about this stuff, or they’re watching all of this stuff unfold, being curious and being interested in evolving health care, and helping take care of their patients better. And they’re left with just this tangled mess.
I think reputation is a key part of making sure that we have a clear definition of digital health. The other thing is regulation. So, I mean, tied right there with reputation is this idea of how are we regulating this massive collection of different types of technology without further defining what it is? So, I mean, you wouldn’t regulate 23 and Me, that’s doing genomics testing, the say way that you would regulate an app on your phone that provides guided meditation that helps you reduce stress. And yet, all of this stuff is considered digital health.
So, the FDA during last year, they published a digital health innovation action plan, which laid out how they were hoping to work with the digital health world, the broadly defined digital health world, in terms of providing regulation over it. So, their guidance outlines what categories are going to be subject to oversight. It lays out six different categories, and their categories are defined based on patient risk. So, how much risk is the pain being exposed to? So, they’ve got different categories that are like software as a medical device. If you are using an iPhone app in order to… the same way that you would be using a medical device as an intervention, that’s going to be looked at from a regulatory standpoint very differently than if you are just maybe providing a meditation app that does something but it’s not being used as a medical device would be.
Or, a clinical decision support software. This is stuff that’s running on the backside of an EMR, helping doctors and nurses make decisions about treatment for a patient that’s sitting right in front of them. That’s going to be regulated differently as well. So, these regulatory frameworks are shifting, and we even saw it yesterday, you know, some changes because of COVID-19 to the way that the FDA is planning to regulate mental health solutions, mental health digital health applications, just because the risk for those is relatively low compared to the benefit of providing broader access to some of these tools to folks that might need some extra mental health support via their phone during this pandemic.
So, I mean, this is all still shifting, but the fact that we need to define this is getting more and more important. And not only because of the regulation, but regulation is often times tied to reimbursement. So, this is an example of a timeline here. Like I said, I cover health care around the world. And so, there’s a lot to learn from other health systems.
So, in Germany, where their regulatory framework is tied directly to the way that health care is paid for because it is a government run health insurance scheme. The German health care organization got through parliament with the digital care act, which basically outlines a way to fast track digital health solutions, the broad definition, into the German health care system so that they can be used. So, this outlines the definition here becoming more and more important as we’re starting to define the different levels of regulatory in Germany, and then how those are tied directly to reimbursement.
Is an app on your phone going to be reimbursed the same way as a genomic test, or not? So, a lot of this is going to be sussed out, and so the definition, figuring out what we are as a sector and what goes in what bucket, this has been dominating the conversation in a strange way as we’re starting to kind of grow and morph into a bigger part of the health care economy.
Tied very closely to this is the next big topic of conversation, which is infrastructure. So, what do I mean by infrastructure? Well, I mean, you can read here the definition of infrastructure and this is basically what we’re talking about. And this was something that, to me, really has just become part of the conversation in health care, especially on the digital health side, especially on the start-up side. So, up until this point really, a lot of these start-ups and their health tech solutions have been piloting.
They’ve been working pilots in health systems, with health plans, maybe working with consumer health care companies like Walmart, or maybe working with Apple, or maybe working with Amazon. But, these have been pilots that have, over the last couple years, started to grow, and grow, and grow, and grow. A lot of these have turned actually into legitimate business, have lots of clients, are making lots of money, and they’re starting to grow in scale.
So, now, as these companies are scaling, they’re looking for better infrastructure, so that they can continue to grow and gain more access to reimbursement, as well as their client basis. And basically build the basic physical and organizational structures that they need for the operation of their enterprises. So, what does that look like in health tech?
I mean, this looks like this. The processes, the software and the networks that need to be in place in order for them to get their solution, or their platform, whatever it is, in front of the right people who are making decisions in health care. So, I mean, these are the questions that need to be answered, right? How does a patient know to ask for this? Yeah, this is really cool that I can monitor my complex chronic condition from home, but how do I even know that I can do that or that I even want to do that? And what are my options? How does the doctor know to prescribe this?
So, back to Dr. Madeira, I mean, how do I know that these are clinically valid that this is something that I really do want to give to my patient because look, the outcomes are so much better. And then, once all of that is taken care of, on the backside, how do the “pharmacy”, or the app store, or wherever you get this from, how does it know to fill the order for it? And how does the payer know to pay for it? And what’s the copay on this? We don’t know. So, the infrastructure is kind of being sussed out as well. So, this is a huge topic of conversation right now, is we’re past the point of piloting. We need some actual end roads. So, where are we at with this right now?
Well, here’s an actual live shot of people building the infrastructure for digital health companies here in health care. No, I’m kidding obviously. I can’t hear the uproarious laughter that I know came out, but I can feel it. This is actually a shot of the Panama Canal. But, like the Panama Canal building, I’m not far off on this, like the building of the Panama Canal; that massive undertaking. Not something that was going to be built in a day. It took a lot to… It took a lot of organization to get the equipment there, the machinery, the people, everybody on the same page with one plan. Panama, US united, I mean, it took a lot, right?
So, this really is kind of where we’re at right now from a health tech side, I would say, in terms of we’re all there. Everybody’s got an idea of where we want to go, and we are in flight in terms of building the infrastructure that we need to support the broad uptick of different types of health technology. Part of this is that we’ve moved to a digital first type of approach. And you might have heard more about that phrase, digital first, especially recently with COVID-19 as different health care organizations and governments are looking to keep people out of the overburdened health care system and keep them at home.
Looking at digital first actions like telehealth, and virtual care, remote monitoring in order to kind of offload that burden. Well, before this became a buzz word tied to this pandemic, we’ve been talking about it in the health innovation side of the industry for a while now. I would say, well, yeah, maybe since last year. It’s really started to get a lot. And part of it is that there’s been digital first health plans that have started to evolve, where the costs are allocated differently. So, this has become more of an industry topic.
And part of this is the idea that the stack has flipped within the way that we provide care. Now, these slides are courtesy of my friend, Matthew Holt, and his partner, [inaudible 00:27:52] who co-founded Health 2.0, and I would like to take a moment and acknowledge them here, in addition to acknowledging them on the slides. But this is really their concept and these two folks, Health 2.0, for those of you who are not familiar, was really, if you were to say, “What is the trade organization for all these different health tech companies? For all these different digital health companies?” The virtual care was like, “Where do they go to talk about moving the industry forward? To make their plans for how they’re going to attack the Panama Canal? Their part of building it.”
Health 2.0 was that conference, and is that conference. It’s now part of HIMSS. So, Matthew and Indu sold it to HIMSS a few years ago. But that community that they built is truly a global community of people who are in affiliate organizations, and who have really been around, I mean, I think over a decade of Health 2.0. Which if you think about it, in health care, is a really long time. So, that covered really that first area where they watched the implementation of EMRs and then all the things that started to get added on to it, as the tech scene boomed here in Silicon Valley, what went along with it from a health care side?
So, they’ve watched this unfold, and what they will say has happened now is that the way health care used to delivered is the main thing the health care system did was provide care delivery. And the health care system did this and they layered on top of it a bunch of services. So, those nurse phone lines you could call or some of those other services that they layered upon the face to face care delivery that they were offering via hospitals and doctor’s offices.
And then, on top of that or behind the scenes there was the tech, and the tech was just meant to support that. The tech was basically the EMR. And within that tech infrastructure, all of it was bundled into that EMR. This was how they were keeping track of what patient had… What the patient record was instead of using paper. What ended up happening that Matthew and Indu will talk about as a result of watching, really, this Health 2.0, health tech industry evolve was that that tech infrastructure kind of unbundled itself.
It became disaggregated, that’s the word that they’ll use. So, they’re in different layers within that tech bundle that existed within just the EMR, the big three EMR companies that are out there, [inaudible 00:30:18] Epic, All Scrips, maybe Athena Health; is that different pieces of the different layers of the technological support that the EMR provided started to break out as technologies kept evolving. And as the opportunity to access and own different blocks of data within that started to become bigger, really, and more available.
And so, there are different parts of this tech infrastructure now that are broken up and as a result of doing that, there are different types of organizations. So, there’s now Cloud storage, right? There’s a transaction layer where things are actually… where claims are submitted and paid for, and there’s data collected on top of that. There’s data exchange where it’s like across different types of EMR platforms. How do they talk to one another? How does your doctor’s office talk to the hospital system? How does the different hospital systems talk to a different hospital system at the data exchange layer?
There’s analytics on top of that. So, what kinds of population health insights can you glean from looking at all of this data and aggregate? And then, there’s an interface layer that’s been created too, where people can access this technology, get in through the technology side. So, the argument is, is that now, what’s happened is that that tech platform has created its own base, it’s created its own opportunity to become a care delivery platform. So, leveraging this opportunity to own the data and the relationship directly with the patient or the doctor. And building a care delivery platform, a new way of delivering care on top of that, where it’s tech first, service is layered on top of that. Maybe adding some people. And then, care delivery beginning added on top of that, whether it be face to face or even virtual.
All that’s great, and it’s truly… This is like a 100,000 foot macro view, and I encourage you, I have a great interview with Matthew Holt up on my YouTube channel where he explains flipping the stack in great detail. And it is awesome. Like it blows your mind. But I mean, what this did though is this took this idea of digital first and this kind of summarizes where we’re at as an industry, where the health care industry is at, I should say, in terms of integrating in different health technology.
The issue is still that the infrastructure for awareness, access and reimbursement, not so well built. We’re at that point right now. This is where we’re at in that live shot of the Panama Canal being built. There are so well worn paths for those three things to make sure that doctors, patients, health systems are aware that the reimbursement mechanism is with them. And basically, these look like this.
Right now, the most popular way a digital health company or a health tech company engages into the health system is through a large, self insured employer. So, I mean, and I’m talking here about those health care companies that actually provide maybe a digital therapeutic, or a digital health solution. This is nothing new. These have been around for a long time. You’re looking at Walmart right here. Everything you see on the right hand side is basically their employee wellness platform.
So, I’m sure you guys have this too, with whatever health insurance you have, whether it be through a plan, or through a large, self insured employer. It’s a way for the employer to take care of their population, and really help with some of the most expensive health conditions that they’ll have to cover. So, in an effort to reduce their cost of care, they’ve put together maternity benefits, or a suite of services that augment maternity benefits I should say. Or, if you see here in the upper left hand corner, we have the virtual visits. So, Walmart works with Doctor On-demand, which is a health tech company to provide telehealth.
Or, if you look at the very bottom right, Fresh Try. This is a behavioral, science based application that people can download, that Walmart uses with its employees, to help create behavior modification to lead to healthier eating, or to lead people to exercise a little bit more. So, it’s basically like the Walmart version of Noom, let’s call it. But it’s grounded in that approach, bringing in a health tech company to provide that.
They’re even using Grand Rounds, which is another health tech company, which they’re listed up there at the top of the middle column. But Grand Rounds helps you find different providers that would offer different health care services. So, you can price shop very easily. So, maybe you don’t need to get your knee surgery done at this hospital, but this other one is just as good and it’s half the price. But it makes that price comparison a little bit better.
So, these large, self insured employers, this is usually how a health tech or a digital health company will start out is that they’ll go to a large, self insured employer that’s managing the health of a large population of people. They’ll negotiate a one off deal. It used to start with a pilot. Sometimes it does. It doesn’t anymore. But they’ll negotiate some sort of a contract with them to test it out. And then, go from there. They’ll go to the next big self insured employer and on and on, to try to demonstrate their use case.
So, now, this is where the infrastructure is like, okay, we’ve demonstrated our use case enough for you, how do we scale this, right? But this has been one way in thus far. Another way in, the well worn path of payers.
So, payers have their own platforms, it’s similar. So, it’s like you have your large, self insured employer, but then the insurance companies insure smaller employers and their populations of people. Or sometimes they’re selling directly on the exchange, directly to people. And so, they’ve built their own platforms, and these have been around for a long time, too. This is probably no news for you. In fact, Wellvolution, the example here, which is coming out of Blue Shield of California. Wellvolution is in, really, Wellvolution 2.0. This is the second time they’ve rebuilt and rebranded their Wellvolution platform.
And now, what they’ve done, and I like this example. This is just, to me, it’s how crazy things are getting here; is that they’re getting kind of clever in their design. So, this Wellvolution platform now, what they’ve done is, instead of just pulling together this digital health solution and that digital health solution that Blue Shield has maybe invested in, they’re letting everybody sign up to offer their services on the Wellvolution platform. And no tier, this is published in an article about the platform in the San Francisco Business Times.
If the metrics that the digital health start-up says that their intervention are supposed to achieve are not achieved, then those digital health companies don’t get paid. Yeah, I’ll pause there for a second, because this, to me, is like wow. This is like a survival of the fittest now on this platform, at least on the digital health side of it. So, as you can imagine, this has been met with mixed enthusiasm on the digital health side of things.
But it’s interesting that the payer, I think, would take such a progressive look at this and just say, “All right, well let’s let the market decide. Let’s see if this really works.” Again, this goes back to that issue of reputation, right, for digital health companies.
The other thing that we’ve seen happen, and this is something I think really exciting probably because I’m a health plan dork from years ago. But PBMs, so the Pharmacy Benefits Managers, there are three of them that own 75% of the pharmacy benefits market here in the US. These are two of them. The one that’s missing is Optum, Optum RX I should say, the one that’s owned by United Health Care. But those big three negotiate all the deals for pharmacy benefits.
So, if you have your health plan and then, with it, you know how you have your pharmacy plan and what’s covered, generics or this, branded drugs or that. This and that. They’ve now added in a digital formulary. So, this is cool, and this is like you have to be so deep in this industry to even love this, and here I am. But, what they have done is they have pulled together a curated list, 15 from Express Scripts, six from CVS Caremark of the digital health solutions that they have negotiated their own reimbursement structure with. And they’ve gone through their own clinical validation process with, and they [inaudible 00:38:38]. And now, these are available to anybody who uses either of these PBMs to administer their pharmacy benefits.
So, this is a new way in, but only for those companies that have been vetted and selected by the PBMs. The last way in that has been a harder road in my opinion, has been direct to consumer. So, some of you might recognize these names. You may have seen 23 and Me, or you may have seen an Everlywell tested in Target. You may be familiar with HIMSS or Rowe or some of the other companies that are listed here, Noom, by just seeing commercials maybe on Netflix or whatever provider you’re using for streaming digital content. I know I’ve seen them.
But this is another way, and this is, I mean, not usually the chosen way for digital health companies, because of the fact that it’s expensive. So, all of this is still very much a topic of conversation because like I said, none of these paths are more than anything well worn.
Moving on, the next big thing that I just want to make sure that you’re aware of within this health tech ecosystem is data access and privacy. This is an issue that we’re going to see continue to dominate the conversation in health tech for years to come, I think. And part of this has to do with the fact that what we have considered health data is no longer just what we had considered health data. The definition has evolved.
So, I talked to Mona [inaudible 00:40:02]. She is the former Chief Data Officer at HHS, and I love what she says here; is that it used to be about your EHR records, but now health data, it’s more about whatever data it is that you’re looking at is going to be used. It’s about intention. And so, how did this come about?
I mean, if you’re looking at this picture right here, these are people who are uninsured. So, I’m sure many of you are familiar with the terminology social determinant of health. So, social determinant of health, it basically talks about the fact that there are all of these social factors, your income level, whether or not you have health insurance, how close you live to a grocery store even, that impact your health status. That couldn’t be any more true.
We’re even saying that your zip code at this point is a better predictor of your health than you genetic code. And if that’s the case, which we’re increasingly seeing that argument being made and proven out, when is your zip code then considered a piece of health data? And what happens with that? So, I mean the definition of health data is changing and evolving and we’re starting to look at that more and more and talk about it more and more in our sector of the industry.
Another key component here is that the ability to access different health data has now been made easier. So, HHS passed these new rules at the top of March, making medical information flow more easily between health systems and patients. But also, making it more accessible through APIs. So, some of these consumer facing tech companies that we know and love looking for the APIs, right? Google, Amazon, Apple, maybe even Facebook. We’re making the access to clinical data more easier, I should say. We’re making access to clinical data easier, providing guidance around that.
So, what’s going to happen as people start to look at different components of data, and add different pieces of data together? These rules, everybody on our side of the industry is very excited about them, obviously, because we get access to clinical data in a way that’s supposed to be a lot easier. It’s really cumbersome right now, and very much we’re also excited about the fact that there’s this patient ownership of data that patients are really going to be able to own their health data and be able to take it with them in an easy way because it is not easy right now.
And they’re hoping that what ends up happening here is that health care because… the way that we have health care interact with technology is the same as it is with banking, and travel, like calling an Uber. And really using some of these other ways that we’re able to leverage technology to make our lives easier; being able to access health care the same way. And so, that’s the intention for these rules.
There was a lot of controversy around them. Some of the big EMR companies, Epic in particular, not happy with the idea that they would have to share the data that they’ve had a lock on for all these years with all of these other different organizations. And even within the industry, this is a great series if you’re interested in this, talking about the data sharing dilemma. It’s the Goldie Locks dilemma, because you want to provide access to a lot of data, but at the same time, you want to protect privacy.
So, what’s the right amount of data that should be shared, would be shared, and if we’re defining health data by intention, as opposed to what’s in an EHR, what does all of this mean? There’s a lot of actual questions here, and we’re going to hear a lot more from health policy folks as this moves on in terms of trying to figure out what this all means and what’s best.
One of the issues that kind of set fire to this late last year was Google Ascension. So, Ascension is the second largest hospital system in the country, and they’ve got a partnership with Google. This is nothing unusual. They’ve got a vendor agreement that gives Google access to their data, which wouldn’t be so terrifying if Google didn’t also have their Project Nightingale, which is a massive data collection project of taking not only health data, but also de-identified health data, but also taking some of the consumer data or the data that they have on our location. Or the data that they have on your search records, and putting all of that together.
So, this started a question about HIPPA, which has been around since 1996. How is this protecting patients’ rights? This is not going to be the end of that, especially as we start to look at some of these other big companies that have traditionally been consumer tech companies, maybe consumer retail companies, or consumer telecom companies get into health care in a really aggressive and a really big way.
The last thing I want to talk about, the last think you need to be aware of about what’s happening in health technology is the bubble. Everybody has been talking about the bubble. We’ve been talking about funding, which has been going up, up, up, up, up for some of these start-up organizations for years. And it’s starting to kind of maybe come down. We may have hit our peak here as well.
Last year $13.7 billion, 727 deals. Last year was also huge because of the fact that it ended a three year drought of IPOs, so initial public offerings, for some of these companies who decided to go public. These were the four that pretty much did it. And everybody looked, I think, most at Livongo, which has been really considered the first digital health company to go public. So, the numbers you see there beneath them are their valuation at the time that they IPO-ed.
There was also an increase last year in MNA within digital health. So, $8.6 billion worth of mergers and acquisitions done last year. So, if you look at all of that together, where people are wondering, what the gossip was at JP Morgan. So, again, that conference that happens at the beginning of the year. I was there this year, interviewed a whole slew of people, eight of which were investors, and picked their brains on what was going to happen this year as far as the health tech market was concerned. And really what I heard was platforms, not point solutions, which is something that I also heard in 2019. And, that really speaks to this idea of MNA, is that people are starting to build more robust platforms rather than having one little company that does this, and one little company that does that.
So, yeah, we’re missing more MNA, that leads to the creation of those platforms. Maybe more IPOs, because those four that I showed you really were considered to have done very well. Then, the last thing is that the market was frothy. Man, did I hear the word frothy so much. I mean, not… It was like me and barista down the street. Frothy was where we were at.
But, what they were saying here is that there’s a lot of cash floating around. So, there was this idea that a lot of big funds that are health care focused ha re-upped and that there was a lot of money to be had. And investors were looking to fund the right things, they weren’t just going to throw their money away. But that there was this concern the bubble was about to burst.
Then, what ended up happening? Well, here we are now, right? So, I want to give you kind of like… I’m going to wrap up with a rapid fire look at how all of these four things that I just talked to you about, the four topics of conversation, have just been playing out through the beginning of this COVID-19 pandemic.
So, we talk about infrastructure. Well, the first thing that happened here for us, that we were just freaking out about, was that our infrastructure changed. We’ve got crisis infrastructure now, specifically related to virtual care. So, virtual care is just a fancy way of talking about things that are related to telehealth, more or less. And a lot of the restrictions that were in place on telehealth were lifted, and telehealth has really been kind of the most, I would say, the most mature part of digital health in the sense that it’s been around for a while. It’s been adopted by traditional health care players pretty well, but still use has been down. The number of people using it has been low, and it has had trouble kind of growing.
Now, basically Medicare set the tone here by lifting up a lot of the regulations that prevented the broad scale adoption of telehealth. So, the ones that we were most excited about lifting was the fact that clinicians could practice across state lines, because before they couldn’t. So, if you were a psychiatrist in New York, you could not deliver care in New Jersey. And now, you can during this crisis infrastructure.
Then, also, they other thing we were really excited about is that reimbursement rose up to be at parody with an in-person visit. So, before, telehealth was being reimbursed at a fraction of the price of an in-person visit, and it often required an in-person visit first with the doctor before you could have a telehealth visit with that same doctor. Now, there is no in-person requirement first, and the visit is being reimbursed the same as an in-person office visit.
So, this is here and we were very excited about this, and you’ve seen numbers for telehealth go up as a result. And in fact, it seems like Google are making it easier so that infrastructure about, how do you even access this stuff? Patients can find this easier. Even though they’ve had it in their health plans probably all along, now you can Google it. If you Google find an emergency care center near me, for the first time ever a virtual option will pop up. You might get an ad for Teladoc, or it might be listed with the doctors that are actually physically located near you.
And the big question everybody has now is are these changes going to stick? Is virtual care being looked at, are these digital solutions being looked at as crisis management tools, or have we gone too far and the genie is out of the bottle? Definitions are becoming more important than ever. So, while virtual care is now being reimbursed as parody, some of these… The Digital Therapeutics Alliance that I mentioned before with some of these digital therapeutics that create behavior change or have some sort of clinical outcome is tied to them; they’re not getting paid yet. And this, I think, might be changing over the next, I mean, who knows? The FDA has been changing some stuff really quickly here.
But what’s going to happen as people are looking to get care in the home because they’re trying to stay out of the health care system, are digital therapeutics going to be reimbursed? And if digital therapeutics are being reimbursed, what about digital medicines? And here we are back in my definition conversation yet again.
Privacy concerns, still a topic of conversation. Only now, let’s dial the heat up on this, because look at the names that are on this slide. I see Google, I see Facebook, I see Zoom, I see Apple. So, what’s happening here as these contact tracing apps are coming. I’m sure you guys have seen this in the headlines yourself. But this is a health data privacy issue, the same one that we’ve been talking about all along, only now the spotlight is on it. And even with Zoom, with virtual care, I mean people are using that for telehealth visits. And if those can be Zoom Bombed, what does that do to patient privacy?
So, again, these conversations are continuing. It’s just what we’re talking about has changed. Our market, is our bubble bursting? Eh, it depends. These were the stock prices. So, Livongo, who I said just went public in 2019, over on the right, our first digital health IPO. Doing great during all of this, because now, they’re looked at as a remote monitoring option for people with diabetes and high blood pressure. And Teladoc, doing awesome. Their stock was pretty low before, and now it’s been on a pretty solid upward trajectory. Maybe a little volatile but headed upward.
Up until this point, where has digital health funding lacked off? Well, if you look at those first three months it just stopped dead in its tracks right there, but it was on pace to be a great year. So, we’ll see what happens. The investors at Rock Health has kind of… Rock Health pulled a pool of investors, I think it was about 15 or so, and asked them what they were invested in. And so, look, of course, this has changed. Telemedicine, remote monitoring, symptom checkers, and some of this other stuff is kind of falling by the wayside.
There have been a lot of layoffs in digital health companies. Some of them are not weathering it so well. And meanwhile, others are saying that we’re overwhelmingly… we see this as a positive. Those restrictions, the infrastructure that’s being created, the president that’s being set, some of the reimbursement strategies that have been employed. This might not be a bad thing for us, but if you look down at the bottom here, look at who their buyers are, the health plans, the health systems.
They see COVID-19 as a negative impact on their business. In fact, there was a big round of layoffs announced today at Beaumont Health System, which is a big health system in Michigan. And it’s like, what’s the appetite going to be for some of these digital solutions as we get further away from the immediate impact of this crisis, and down the road toward recovery?
So, I say now, more than ever, it’s a perfect time to ask, What’s The Future, Health? You can check up with where I’m at tracking COVID-19 by watching my video interview series on it. It is on my website. It is also on YouTube. And, I want to just stop right there and leave a few minutes for questions. So, thank you very much. I’m going to stop there, and Kira, I’m not sure the best way to handle Q&A. So, please take over.
Yeah, of course. Thank you so much Jessica. Yeah, so to our audience, feel free, I know thank you to sending your questions over while the presentation was going on. So, we’re going to be picking some of them up. And for those who have not already provided questions, you can do so by activating the Q&A window. And then, just send them over to us. That’d be great.
So, the first question, and this occurred I guess when the presentation was around slide number 32 or 22 or so. And it’s in regards to the single payer system. How does it help with infrastructure? And please let me know [crosstalk 00:53:29]-
Around slide 22.
I think so.
I kind of do. Is there more to it? Let’s see.
Were we talking about…
It was around the Panama Canal construction.
Oh, my Panama Canal slide. Okay. [crosstalk 00:53:47] the question, sorry, can you repeat it? Is it how does single payer impact infrastructure?
Well, [crosstalk 00:53:53] based on a different infrastructure so… okay.
So, a single payer, if we look at other countries, like if you look at Europe. So, right now, Germany is the one that had passed that digital health act, basically to kind of streamline the process. So, their process, it actually is kind of a riff off of the FDA process here where it lets the digital health companies operate in the market, theirs goes for 12 months. They can operate, collect data and at the same time, it’s like the regulatory process happens concurrently with that. So, they’re looking at some of the data that’s being collected in real time. Then, once they hit the end of it, they decide how much they’re going to reimburse that digital health solution at. So I think maybe I’m going to push this… Yeah, I am just real quick.
So, if this was the slide that you were talking about. Okay, so yeah, that’s how that works there. And then, different countries have different versions of this. So, in Europe I think, Finland has a version of this as well, but I believe that what they have done is that their government has made some blanket decisions about what will be brought in and what will be reimbursed. And so each one of them is kind of tackling it in a different way. But it each has those core components.
And so, I mean, it just depends. I mean, here in the US our health system is obviously so different from this because our payment is separated from it. But this would be like if Medicaid had decided to provide their own regulatory around the digital health solution, and they decide a reimbursement scheme for it. Right now, that’s separated out with the FDA taking the wheel for that. I hope that answers that question.
I think, I hope so. And if not, please audience let me know. So, the next one question is-
Send me an email.
Yeah, yeah, that’s right. So, huge thanks. Great [inaudible 00:55:34]. Do you foresee a shift toward a more direct to consumer models, like HIMSS, HERSS, [inaudible 00:55:41] in light of the pandemic? Or do you think most patients, caregivers will continue to visit their IDMs and existing treaters who are getting more comfortable with tele med? Just curious for your opinion.
Oh, that’s a great question, and you know what? I think that is the question here, right? So, I think the opportunity that the pandemic has provided is that there’s more awareness for digital. So, I think lots of people before, patients and providers, consumers, everybody who had maybe varying awareness of what was out there that could be delivered digitally is starting to take a closer look at it, and look at it in a more serious way.
I think that there’s always going to be a certain group of people who will [inaudible 00:56:24] like the direct to consumer stuff will work. And usually what they say, at least in the industry, those are the people who are young and healthy with disposal income, which is kind of like what HIMSS or Rowe or some of those other organizations like Parsley Health, which is kind of like a separate little primary care office that does some extra testing and extra things like that around it, or like the Everlywell’s of the world. I think you’re always going to have that consumer base, whether or not that will hit a more general American consumer base; I’m not exactly sure.
I mean, I think of my parents and I think of where their limitations are; we’re lucky they’re using FaceTime. I don’t know, I think that they would use a telehealth thing. I don’t necessarily know if they would trust using, or if they would have the appetite or the interest to use a digital therapeutic that guides them through a nine month program to bring their blood pressure down. I don’t know if that’s something that they’ll ever be in to.
But I do think that providers need to be… It would be great if they could, if they’re interested in this topic, to learn a little bit more about what’s out there in health tech, because I do think that they’re going to be asked a lot more. And I think as they get more comfortable delivering care virtually… It takes a different set of skills, right? And I think that as they get more comfortable with it, and as people get more comfortable using those services, I think the conversation will then turn to what else can we… “Great, my in-person… what used to be an in-person visit, I did over my phone. It was so convenient. Now, what else can I do using my phone and using my own time and being at my own convenience, that’s easier for me to access. What else can I do?”
So, I think that that will eventually lead to some growth in the demand for some of these services and the way they’re taken off by the traditional health care system. I’ve heard anecdotally a lot of it’s going to depend on what’s paid for. And we all know that, so it’s like are those who have the checkbook still going to reimburse the same way? I think that’s what’s going to end up making a difference on the backend of all of this.
Wonderful, and the next question is are there data about patient compliance rate with in-person or virtual health platforms?
There are, and so if you go to any of these health innovation conferences you’ll see, I mean, different organizations, different health start-ups have done their own research or have worked worked with organizations to supplement some of the work that they’ve been doing to get kind of that third party agnostic perspective. So, Livogo has published studies I know. Other organizations that are bigger that have been acquired, like Rez Met acquired Propeller Health. They’ve done studies to show the different rates of adoption and compliance and whether or not things are changing some of those bio metric factors that they say they’re going to change.
So, it really depends and this is where that range of stuff that’s being lumped in under digital health. Some digital health companies further along have more money, have more bandwidth, have more ability to do those studies. And then, others, the smaller ones especially, they’re still piloting. And so, while they’re trying to collect that data, it may not be as robust or viewed as independent and valid as some of the data that they’ve been collecting on their own. But yeah, it certainly does exist, and there’s mix results, right?
Absolutely. So, we’re coming into the hour mark now. And we have a number of questions that are coming in. So, I do apologize if we don’t get to address them during this presentation. And we promise we will be in touch with you to answer them just following this webinar.
And, for the last question that we have is, if the market works to decide what technology works for the patient, why wouldn’t we reduce the role of payers to guide the market and free that premium money to allow for direct consumer choice?
I feel like this is a Medicare for all kind of question, right? I mean, so, I think there’s a movement for that, right? But, the way that the health system works right now, the way it’s funded is just that’s not the way it is. So, I mean, even… I would love to see that happen. I would love to see the market myself personally, my personal opinion, I would love to see the market decide on a lot of these things, because I think that that would be where you see a lot of the costs of delivering health care cut. And you would see the system right itself where the sick care stuff is done in-person and done in hospitals. And all that higher equity stuff that cost a lot is done by specialists who could really focus on doing that and doing that well. I think that there are some of these higher tech, lower cost solutions that are out there that can really change how much money we spend collectively on health care in this country.
But right now, the infrastructure for that type of reimbursement and the way the money is spread out is just not exactly there. But it would be cool if it was.
In my opinion.
Looks like we’re just wrapping up to the hour mark, and I just want to thank Jessica for presenting on this important topic of innovation in digital health and the impact on patient care. Your knowledge on the topic is astounding. Your delivery is so highly engaging to our audience.
And to everyone who dialed into listen today, as many of you are health care professionals on the frontline of the current crisis, we want to thank you for spending your precious time with us. We hope you found today’s topic to be informative, intriguing. If you want to continue to be part of the discussion and solution on the [inaudible 01:02:10] of health care, I invite you to look at becoming part of GW’s online health care MBA program. And, you can find information on the application, on your screen as well, upcoming starts. We are currently accepting application.
There might be time for summer. It begins May 18th, and for the fall, especially, August 31 and contact for our admissions coaches are also on your screen. But you will be receiving a recording to this webinar and I really appreciate your time. And thanks again Jessica, and everyone for spending time with us today. And please, please stay safe.
And if you have time before dialing out, if you could maybe complete this quick survey. There’s just two quick questions. And then, we’ll be closing out. So, Jessica, do you want to have a final remark to our audience?
Yeah, I’d just like to say thank you to everybody. And, it’s so hard to do this when you can’t see people and see if there are puzzled looks or excited looks. So, hopefully you’re all excited and I hope that by listening to kind of what’s been going on in health innovation that you want to take a look yourself. And, want to get a little bit smarter on the topic, and find out what’s going on. So, if you like me, and you like my high energy style, please check out WTF.Health, and if not, there are a number of different resources out there that you can follow and read up on the subject. I just hope that you do because I think it’s exciting to learn about the future of health. So, thank you so much for having me. It’s been a pleasure.
Wonderful. Thank you so much everyone and Jessica. Have a safe day and the rest of the year as well.
Thank you very much.
See you again, soon. Thanks so much. Bye, bye.