Published 2020.8.11
Last week, Teledoc purchased Livongo for $18.5 billion, creating a combined entity worth $38 billion. Many believe this deal represents the beginning of another round of digital health consolidation as others look to develop online offerings for payers and employers. The consensus is that Teledoc offers virtual care with primary care (including chronic care management) with acute care management and mental health and Livongo offers personalization with cognitive behavioral therapy and coaching and nudges to drive behavior change.
I am not qualified to talk about the financial fundamentals behind the acquisition. I do think the merger reflects a future where entities paying for healthcare may be seduced by technology-powered interactions without viewing the larger health information technology landscape.
In 2002, the Diabetes Prevention Program Research Group published the results of their randomized trial comparing patients without diabetes who had an elevated fasting and post-load plasma glucose concentration to placebo, metformin (850 mg twice daily) or a lifestyle modification program with the goals of at least seven percent weight loss and at least 150 minutes of physical activity per week. The individuals randomized to the lifestyle modification program were exposed to a 16-week curriculum covering diet, exercise and behavior modification taught by case managers on a one-to-one basis during the first 24 weeks after enrollment. Individuals also received individual sessions monthly with group sessions to reinforce behavior changes. Half of the lifestyle intervention participants achieved the weight loss goal of seven percent by the end of the 24-week curriculum with 38% retaining that level of weight loss at the end of the study. Individuals in the lifestyle arm had more weight loss initially and long-term compared to the metformin or usual care arms. The incidence of diabetes was reduced 58% in the lifestyle intervention arm compared to placebo (the metformin arm had a 31% reduction in diabetes incidence).
In 2010, Congress authorized the Centers for Disease Control (CDC) to establish and lead the National Diabetes Prevention Program (NDPP). The CDC lists a series of topics to be included in any Diabetes Prevention Lifestyle Change Program with separate elements in the first six months (at least 16 sessions) compared to the second six months (at least six sessions). The CDC also includes a personal success tool with videos, quizzes, games and other resources to increase program retention. Programs interested in being evaluated need to have delivered the content for 12 months and have at least six participants who have prediabetes who have completed at least 10 months of the program. The CDC requires all recognized entities to submit data to the CDC every six months including:
- Verifying organizational capacity including
- Program coordinator
- Lifestyle coaches formally trained to a CDC-approved curriculum
- Staff training and refresher training
- Ability to obtain weights via digital technology (e.g., Bluetooth-enabled scales)
- Participant demographics, weight, physical activity and prediabetes determination
- Delivery mode (in-person, online, distance learning)
Preliminary recognition requires at 60% of the eligible participants attend at least 10 sessions in months 1-6 with 60% of participants attend at least four sessions in months 7-12. Full recognition requires the average per-participant weight loss at the end of month 12 among participants eligible to be evaluated to be greater than five percent.
In February 2015, the NDPP began its virtual program. Patients have been shown to lose weight using telehealth and online tools instead of face-to-face encounters with similar results. As of August 9, 2020, there are 13 separate entities recognized by the CDC to provide the Diabetes Prevention Program to the public either online or via distance learning with another 52 awaiting full recognition from the CDC. There are even more programs that limit their offerings to employees or other eligible individuals. For the few programs that listed a website within the CDC directory, monthly program costs range from $30-45 with some programs strongly suggesting a Bluetooth scale, blood pressure cuff and glucometer.
Levine, Close and Gabbay reviewed 12 companies in the connected diabetes care space, including Livongo, as of late 2019. Only two of the 12 companies studied (Onduo and Virta Health) included prescribing providers on the care team. Each company’s evidence seems to highlight the performance of those who opted into the program with different methodologies, precluding head-to-head analyses. The authors acknowledge that the companies are only assuming upside risk (payment if A1C or weight reduction goals are met) without downside risk (penalty if A1C or weight increase). As connected care solutions extend into other chronic conditions (e.g., pain management, insomnia, mental health, congestive heart failure), programs not integrated into prescribing provider systems (primary care providers, specialists) risk providing conflicting advice to patients.
Livongo achieved full recognition from the CDC as a Diabetes Prevention Program in November 2018. They have suggested branching out into other chronic conditions (e.g., hypertension, mental health), but I was unable to identify any specific conditions on their website. At least a few competitors have made the pivot to include other conditions (Lark: hypertension, prevention; Omada: hypertension). None of the connected care vendors have made a claim that their technology platform (connected devices, superior coaching staff, artificial intelligence-powered prompts) is superior to any other vendor.
Which brings us to Teledoc acquiring Livongo. A telehealth company with a focus on low-acuity urgent care buys a patient-facing app with more outreach capabilities and feedback mechanisms to provide a unified platform to offer a vision of chronic care disease management with virtual primary care to address the multi-billion chronic disease management market. If Livongo restricts itself to behavioral modification without using prescribing providers, patients who require additional evaluation and medication management should be able to connect with a Teledoc provider for those services. The additional monitoring and coaching costs need to be offset by a reduction in healthcare expenses due to fewer office visits or fewer medications. Livongo’s studies that have been announced at national meetings, but not yet published in peer-reviewed medical journals, suggest that the company has been able to meet that requirement.
To make a more meaningful impact on healthcare value, I believe the Teledoc-Livongo partnership would need to reconsider the chronic disease care delivery paradigm. Patients who show signs of metabolic syndrome (i.e., increased waist circumference, elevated blood pressure, glucose intolerance) may benefit from some form of connected care if those patients believe that changing their behaviors can improve their health. Adding online smoking cessation tools would multiply the tool’s effectiveness in reducing long-term cardiac complications. The NDPP curriculum does not appear to include any information about smoking cessation, and that omission appears to have carried over into the development of private connected care programs that were originally created in response to the CDC’s request for assistance delivering diabetes prevention services to the American public.
For those patients who are diagnosed with hypertension or diabetes, engaging prescribing providers (either online or face-to-face) should help control risk factors to reduce the likelihood of developing complications. These savings would need to be identified from more efficient interactions (i.e., using low-cost resources for common interactions and higher-cost resources infrequently). For example:
- Use care teams to manage medications and laboratory values without an encounter,
- Use encounters with an independent ordering provider to recalibrate treatment plans based on changes in a patient’s expectations, functional status or quality of life,
- Refine patient engagement techniques to keep individuals logging onto online tools between encounters to report risk factors, symptoms and progress, and
- Use prior experiences with other individuals to consider tailoring advice or interventions to maximize engagement, health status or satisfaction.
Teledoc-Livongo will probably make a pitch to self-insured employers that their combined offering can address the majority of chronic care needs of their workforce. I suspect the company’s effectiveness will be restricted to those employees who are open to adjusting their behavior change with some help from tools that track their progress. Although the technology implications garner the most attention, the company’s ability to influence an individual’s propensity to change their own behavior long-term may be more important. Although I have limited their impact to cardiovascular disease, that domain includes billions of dollars of healthcare spending with various complications requiring emergency room and inpatient treatment. It remains to be seen if a virtual healthcare offering can reduce healthcare spending more than 10% compared to usual care.