by Alexander L. Fogel and Joseph C. Kvedar | NOVEMBER 14, 2016
Businesses that are serious about reducing health care costs — and improving the health and well-being of their employees — should take a serious look at digital therapeutics, which have the potential to provide effective, low-cost ways to prevent and treat chronic diseases and their consequences. Digital therapeutics are technology-based solutions that have a clinical impact on disease comparable to that of a drug. They primarily use consumer-grade technology such as mobile devices, wearable sensors, big data analytics, and behavioral science and can be delivered through web browsers, apps, or in conjunction with medical devices. They can also be deployed in real time and at scale, which is critical for intervention in chronic diseases.
These broad applications now include artificial-intelligence-driven smartphone apps that monitor patient activity and social interaction to detect and intervene in episodes of clinical depression, pills with ingestible embedded sensors that can tell patients and doctors whether a medication has been taken properly, and asthma inhalers that connect with networks of air-quality sensors to provide personalized feedback on the connections between patient behavior and environmental factors. (Full disclosure: One of us, Joseph Kvedar, is an advisor to several companies involved in the digital therapeutics space, including Claritas Mindsciences, Mavericks Capital, PureTech, and MD Revolution.)
Why Now?
Chronic diseases now affect more than half of all Americans. They undermine productivity and account for more than 85% of health care costs — a big reason premiums for employer-sponsored health care have increased by 123% since 2000 while wages have increased by only 43%. More than two-thirds of large businesses now offer disease-management programs, but most of these are bricks-and-mortar services that can be converted to better-studied, cheaper, and more effective digital therapeutics.
Insight Center
Digital therapeutics are being increasingly validated in clinical trials published in peer-reviewed medical journals and are available or are being developed for most chronic diseases. They include diabetes, hypertension, hyperlipidemia, obesity, smoking and chronic respiratory disease, and chronic pain. The Centers for Medicare and Medicaid Services (CMS) now reimburses for digital therapeutics for diabetes prevention and management. Enrollment in digital therapeutic programs is growing: A digital therapeutic is now the largest diabetes-prevention program in the United States recognized by the Centers for Disease Control and Prevention (CDC), and millions of people have downloaded digital therapeutics apps for medication adherence.
Here are just a few examples of the scale of the problem and the possibilities offered by digital therapeutics:
Diabetes prevention. Diabetes affects 9.5% of the U.S. population, and a diabetic employee costs his or her employer $4,500 more per year in lost productivity and higher medical costs. An additional 32% of the population has “pre-diabetes” – meaning that they are at high risk of developing diabetes.
The best treatment for diabetes is prevention, which requires many continuous behavioral interventions, support, and education. Digital therapeutics are now offering these solutions. One example is Omada Health, which modeled its product after the landmark Diabetes Prevention Program study. Omada offers a 16-week, online, interactive, behavioral-intervention program that combines health coaches, social networks, and personalized plans to reduce the development of diabetes in pre-diabetic patients through weight loss and increased physical activity. Studies show that the average participant loses nearly 5% of his or her body weight, keeps it off, and is less likely to develop diabetes. Omada’s programs are now recognized by the CDC and CMS.
Smoking cessation. Seventeen percent of U.S. adults smoke, and they cost their employers nearly $6,000 more per year in direct and indirect medical costs. Smoking cessation is difficult, requiring minute-to-minute support and behavioral change. Digital therapeutics are being developed and clinically validated for smoking cessation. One is 2Morrow’s SmartQuit, a smartphone, app-based, smoking-cessation therapy that has demonstrated effectiveness in randomized clinical trials and is two to three times more effective than unaided smoking cessation.
Medication adherence. More than 83% of all prescriptions are filled by patients with chronic diseases, and the average patient with one or more chronic diseases fills more than 20 prescriptions per year. More than half of medications prescribed for chronic disease are not taken as directed, and between 20% to 30% of all prescriptions are never filled. This problem contributes to worse health outcomes and greater spending. Digital therapeutics are emerging to combat this problem.
One example is MediSafe’s cloud-synced smartphone app that sends patients reminders to take medications at their scheduled time, along with a “virtual pillbox” with images of the size and shape of the patient’s pills. MediSafe can then send summary reports to patients and doctors. Users report substantially greater medication adherence across a number of chronic conditions.
An Adoption Strategy
Here is a basic framework that employers can use to develop a strategy for introducing digital therapeutics.
Analysis. The health characteristics of your workforce are distinct and vary by industry and region, as well as by employee age, race, educational level, and many other factors. Analyze which chronic diseases are responsible for the majority of your costs now and in the future.
Goals. Develop big-picture targets suited to your company and workforce. These may be as simple as “reduce year-over-year health care spending” or as specific as “help employees with chronic disease improve medication adherence”.
Metrics. Decide how you will evaluate the success of your digital therapeutics strategy. These may be generalizable to all employees such as “reduce the average employee BMI by 1 kg/m2 over the next two years”or may be specific to certain subsets of employees like “decrease the average medical expenditures in patients with diabetes by 10%.”
Based on the above analysis, you’ll need to choose between multiple providers. Pay attention to the following information in deciding.
Sales venue. Solutions may be available directly through digital therapeutics companies, payers, or care-delivery systems. Some firms may find it easier to handpick particular providers; other may opt for a distributor-like solution to allow for more options and easier selection. These solutions are new to market and some of them may not be included in the standard offerings of your health insurer or third-party administrator.
Evidence. Look for providers that can back up their claims with support from unbiased national medical organizations and studies published in peer-reviewed scientific journals. Pilot programs with big-name medical organizations are not enough — ask for the results.
Cost structure. Some digital therapeutics providers will offer pay-for-performance contracts, others may have lump sum or per-member-per-month fees, and some may have hybrid models that combine fixed fees and performance bonuses. While pay-for-performance is an attractive structure because it generally aligns incentives and ensures that resources are allocated efficiently, it may not be a feasible model for all diseases and services. The best cost structure may vary with your firm’s goals and metrics.
ROI. Return on investment is often used to justify the go-ahead decision, but be careful to choose a time horizon that is long enough to achieve the clinical outcome your firm is seeking. Choose providers that focus on bottom-level metrics like ROI and health care spend; avoid providers that focus on top-level metrics like engagement.
Ease of use. Ensure that your target user will be able to obtain the full benefit of the digital therapeutic. Training programs, pilots, or short-term trials may be available.
Regulatory and compliance. Data used by digital therapeutics providers must be appropriately secured and compliant with health care regulations such as HIPAA.
Integration. Can the digital therapeutic integrate with a user’s doctors or electronic medical record? Can multiple solutions be integrated together? Understand how to achieve synergies when choosing.
The epidemic of chronic disease requires prevention and continual intervention that brings about behavior change on a massive scale. We need research-based tools that can prevent and treat chronic disease effectively and at a low cost. For businesses looking to build a healthier workforce and reduce health care costs, digital therapeutics should be a major part of the solution.
