Industry Update - 26 Feb - Remote Patient Monitoring

Omada Health Closes $192 Million Series E Financing to Bring Virtual-First Care to Millions

• Company: Omada Health’s mission is to solve the problem of chronic care treatment in the U.S. There are so many inefficiencies in the healthcare system that hinder individuals from truly managing their health. Omada Health delivers integrated, virtual care across chronic conditions, a top clinical need for employers and health plans
• Founders: Started by 2 people in May 2011.
• Adrian James started his career as a technical person and got interested in healthcare during his almost a decade long career at Ideo. This is also where he and Sean worked together.
• Sean Duffy on the other hand had a formal medical training but got invested in tech. Also worked on award winning med-tech blog.

• The science: It is not a novel scientific breakthrough lead to commercialization company.
• The technology: 
• The Traction: Showing recent growth in business activity certainly makes a funding pitch appealing
• Currently serves 1,700+ customers and 550,000 members – up from 1,000 customers in 2019. 
• has access to over 18 million covered lives across employer and health plan channels
• more than 3.5 million covered lives added through new deals in 2021,
• Multi-product contracts accounted for 32% of Omada’s 
• The digital health company also earned preferred status on the Evernorth Digital Health Formulary for its cardiometabolic digital chronic care programs. The preferred status expands Omada Health’s reach to more than 100 million members.
• Future plans: Compared to many other companies reviewed on this blog, this is a more reactive fund raising but also grounded in reality. The recent $192 M would be used for
• Accelerated hiring at all levels to meet growing customer demands
• Accelerate technological roadmap for care and coaching personalization to further improve on delivering better health outcomes
• Increased investment in the Omada Insights Lab to unearth the most innovative, cost-effective interventions.
• Customer segment: Proven Virtual Care for Chronic conditions. 
• The healthcare industry has reached a tipping point when it comes to chronic disease. 
• There are 96 million U.S. adults diagnosed with pre-diabetes 
• 37.3 million diagnosed with diabetes
• 47% of U.S. adults have hypertension 
• more than 50% struggle with musculoskeletal issues
• Who pays? Based on their website it looks like employers and payers (health plans). Since the focus here is on chronic issues it makes sense. Employers want have healthy employees (or employees better at managing chronic issues) boosting the productivity and also position this as a benefit. For payers maybe they might wanna see it coming before sh*t hits the fan and also this gives them a lot of longitudinal data on chronic conditions further refining their decision making algorithms.

Interestingly Omada started as prediabetes management company focussed on preventive care and slowly expanded into virtual chronic care. A lot of companies start with a very noble reason only to realize their idea might not be commercially sustainable without getting one of the 800 pound gorilla (providers, Pharma, payer, employers) paying their bills.

• Competition: In healthcare industry everybody seems to be getting up in everyone else’s business. Payers expanding into provider territories (employers direct contracting with providers, or creating employer-owned hospital), online pharmacies are building virtual clinics and in-home care platforms (Roman/Ro), front door companies (for pharma) are expanding into remote monitoring and so on. At least at this moment the investment community seems to believe the pie is so big that even if company x gets a small slice, it is enough. At the same time it becomes to identify the competition.
• Analysis: Chronic conditions care market seems to have its own unique characteristics. For example, solution provider will be involved for longer duration with patient's lives, making it easier collect significantly more data on effectiveness and outcomes, leading to thorough evaluation of these virtual care solution. From commercial point of view also this generates a long-term stream of revenue per engagement.

Story Health has raised $22.6 million in Series A funding

• Company: Story is among several remote patient monitoring (RPM) startups focused on extending care for severe conditions into the home. They currently focus on heart conditions, Story aims to expand into other issues that are treatable with virtual coaching and remote monitoring.
• Founder: Tom Stanis after spending nearly a decade building the virtual care offering at Alphabet life science spinout Verily joined forces with Ashul Govil (MD, MBA, Cardiologist), Nikhil Roy (started with entrepreneurial stint and then a decade long product management experience)
• The technology: Like several other RPM companies, Story Health partners with health systems to help patients with severe illness return home without disrupting their care.

• Integrating with electronic health records systems Epic and Cerner allows Story to crunch patient data, such as vital signs and medications, and help guide clinicians' decisions about their care.
• Story's RPM tools include connected blood pressure cuffs, heart rate monitors and weight scales.
• The company is currently enrolling patients in a clinical trial focused on studying its effectiveness in heart failure.
• Future plans: Currently focused on patients with heart failure, the startup plans to expand into other heart-related illnesses later this year, such as aortic aneurysm and dyslipidemia.
• Customer segment: care for severe conditions in remote setting (for now heart failure)
• Who pays? Based on their website it looks like providers and patients. I was a bit confused why a provider would pay for a remote patient monitoring service. My only guess is because it frees up hospital capacity (in terms of physicians or beds) making it available to patients who need it. Assumption here is the hospital is operating at full capacity on most days, RPM will basically create additional source of revenue for the hospitals. Wonder if this can become a double-edged sword. Since RPM is comparatively inexpensive (at least on the slide of sales pitch), could that drive the provider occupancy down?  
• General Notes: The approach is similar to the one taken by several other other Silicon Valley-based digital health startups, including:
• Athelas, which began with immunocompromised patients and earlier this month raised $132 million.
• Livongo, which got its start in diabetes and was acquired by Teladoc in 2020 for $18.5 billion.

Athelas, another remote patient monitoring company, raised $132 million

• Technology: Athelas' flagship product, the Athelas One, uses a finger prick to draw blood and share metrics like white blood cell count with providers. It also offers a connected glucometer, blood pressure cuff, scale and medication-tracking device. The data collected by Athelas’s remote monitoring devices integrate with major electronic health records systems, and the platform is supported by clinical staff who can assist providers in rolling out the program among their patients.
• Traction: Athelas now serves more than 40,000 patients with chronic conditions like hypertension, cardiac disorders and immunosuppression, making it the largest provider of remote patient monitoring services in the U.S., according to the company.
• Who pays: While many chronic care management platforms partner with employers or health plans to deliver remote monitoring services, Athelas works directly with providers, which founder and CEO Tanay Tandon sees as the company’s market advantage.
• Future plans: The goal in Athelas co-founder's Tandon's words is to offer all the sensors possible and then some, to offer the baseline of what exists today and then push on what’s possible by building their own sensors. The company plans to announce partnerships with more health systems in the next few months as their team hopes the FDA will clear the use of tests for hemoglobin and platelets on Athelas One.
• Other notes: Athelas started as a clinically-validated rapid blood diagnostic system. Eventually they added more products (trackers) which help monitor patients more continuously. 

General notes

• Virtual Care vs Telehealth vs Remote Patient Monitoring: the generally accepted hierarchy seems to suggest Remote Patient Monitoring is a subset of Telehealth, and Telehealth is a subset of Virtual Care. So it would not be surprising if a company trying to raise pitches as parent or grandparent category (RPM startup pitching as Virtual Care).

source: McKinsey and Company

• Pain-points in adoption of Telehealth (and by definition RPM)

source - American Medical Association Webinar 2020

• Total market size and CAGR: These reports can vary widely (maybe wildly). As per ResearchAndMarkets

• $7 billion. The global remote patient monitoring market will reach nearly $7.4 billion by 2029 — a significant increase over the 2020 market size of about $2.2 billion.
• 16.4% CAGR. To reach the forecast of more than $7 billion, it would require this impressive compound annual growth rate (CAGR).

          On the other hand some conservative estimates put it around $1.7 B by 2027.

source: Business Insider

• Party of Unicorns: According to CBInsights, by June 2021 there were 27 telehealth unicorns valued in aggregate at $55B globally. 

• Cost to patients: A study conducted by Intermountain Healthcare leaders and published in the Journal of Telemedicine and Telecare showed that the total cost for some of the most common virtual diagnoses was sharply lower than in other care settings. The study, which looked at SelectHealth (a nonprofit health plan serving 900,000 members in Utah, Idaho and Nevada) claims between April 2016 and March 2017, reported that the $429 total cost of virtual care for the most common telehealth diagnoses was $232 less than urgent care, $278 less than primary care and $2,974 less than diagnoses delivered in the emergency department.