Omada Health: A Leader in the Digital Health Revolution

Introduction

Nearly everyone has interfaced with the healthcare system. Though our normal lives are punctuated by periodic clinic visits, our fundamental health needs do not vanish between appointments.

This is especially true for individuals with illnesses that require behavioral modification and health maintenance efforts. Because healthcare professionals are not present at all times, the onus of ongoing health efforts traditionally has fallen on the patient– a very individual and lonesome task. With that in mind, combined with the expansion of digital healthcare efforts, many entrepreneurs and companies have seen the value in remotely connecting patients to healthcare professionals and also to each other. Omada Health is one such excellent effort.

Context:

Currently, chronic disease affects nearly 3 out of 4 adults, and is responsible for more deaths than infectious disease [1]. The management of these conditions also accounts for more than 85% of health care costs in the United States [2].

Diabetes is a prime example for further understanding this. The condition affects 9.5% of the population, with an additional 32% “prediabetic” patients, who have significant risk of progressing to diabetes. [2] Worse yet, this disease has staggering economic consequences – employers pay approximately $4,500 more per year for diabetic patients due to lost productivity and higher medical costs. [2]

While diabetes itself can be treated with a combination of pharmacologic and behavioral interventions, patients diagnosed with prediabetes also benefit from specially tailored programs. According to the Diabetes Prevention Program study (a randomized control study of prediabetic patients across 27 US clinical centers), patients who lost a modest amount of weight through dietary and lifestyle changes reduced their chances of developing diabetes by 58%; those randomized to only taking medication (metformin), also experienced a reduced risk of progression, but by only 31% [3].

What this data shows is that for prediabetic patients, lifestyle and dietary changes may be superior to pharmacologic intervention only [3]. Furthermore, this data demonstrates a significant opportunity and need for focusing on preventative measures.

And that’s exactly where Omada Health fits in.

What is Omada Health and how is it disrupting healthcare?

As stated on its website, Omada Health “[helps] employers and health plans tackle chronic disease in the most engaging, effective, and scalable way possible.” [1] It is a digital therapeutic, or “technology-based [solution] that [has] clinical impact on disease comparable to that of a drug.” [3] It works by centering around 4 core principles: 1) starting with science, 2) deepening with adaptive design, 3) empowering people, and 4) insisting on outcomes. [1]

For patients, Omada offers a 16-week, online behavioral intervention program that focuses on 4 dimensions: eating habits, stress reduction, activity levels, and sleep [1, 2]. Through accountability on the platform, support within an online community of patients, and tools and insights provided by Omada Health’s experts and a personal coach, patients are empowered and reminded to prioritize their health and track their progress. Omada analyzes the amassed individual data to report successes and areas for improvement, which also gets used to uniquely tailor the digital experience to the particular individual over the course of the program. This involves more specific personal coaching as well as narrowing the online social community to connect patients with similar areas of improvement. [1]

Patients are not the only ones who benefit, though — corporations also derive significant value. Omada not only helps recoup the costs of lost productivity and increased medical care, but it actually contracts on a performance-based payment structure to demonstrate explicit return on investment. This clearly shows that Omada believes in the science that informed its existence, and that outcomes fuel their fire [1].

Current Successes and Ways Forward

Since its inception, Omada’s operating model has been mission-driven, but now it has become evidence-based. An independent academic study demonstrated that seniors at risk for diabetes and cardiovascular disease who used the platform achieved statistically significant weight loss, disease risk reduction, and meaningful medical cost savings [5, 6]. Because of these results and other trends, “Medicare [has begun] reimbursing CDC-recognized providers like Omada Health for administering the Diabetes Prevention Program to eligible beneficiaries” [7]. This represents a significant success and potential for expansion to new providers.

But beyond that, I would recommend that Omada pursue two potential future strategic shifts:

  • Given its rich data, Omada has become a leader in defining new evidence-based norms for diabetes care. It should harness its position to lead the healthcare community towards private sector approaches to healthcare data collection.
  • Omada could also consider leveraging its already meaningful client relationships to enter the mental health space, which shares the evidence-based therapeutic options of behavior modification and community support systems. Given that mental health outcomes are less measurable, Omada may also consider adopting a new financial strategy (e.g. hybrid model of fixed fees, per-member-per-month, and/or performance bonuses) to add a new revenue stream.

Regardless of the strategy Omada pursues, it has truly positively revolutionized patient care.

 

Word Count: 799 (without titles)

 

References:

  1. Omada Health. 2016. Digital Health Program | Omada Health. [ONLINE] Available at: https://www.omadahealth.com/. [Accessed 18 November 2016].
  2. AL Fogel, Kvedar JC. 2016. Simple Digital Technologies Can Reduce Health Care Costs. Harvard Business Review [ONLINE] Available at: https://hbr.org/2016/11/simple-digital-technologies-can-reduce-health-care-costs. [Accessed 18 November 2016].
  3. Diabetes Prevention Program (DPP). 2016. National Institue of Diabetes and Digestive and Kidney Diseases. [ONLINE] Available at: https://www.niddk.nih.gov/about-niddk/research-areas/diabetes/diabetes-prevention-program-dpp/Pages/default.aspx. [Accessed 18 November 2016].
  4. L Ramsay. 2016. Andreessen Horowitz investor Vijay Pande on the future of tech and healthcare – Business Insider. [ONLINE] Available at: http://www.businessinsider.com/vijay-pande-a16z-on-the-future-of-tech-and-healthcare-2016-11. [Accessed 18 November 2016].
  5. F Chen, Su W, Becker SH, Payne M, Castro CM, Sweet AL, Peters TM. (2016). Clinical and Economic Impact of a Digital, Remotely-Delivered Intensive Behavioral Counseling Program on Medicare Beneficiaries at Risk for Diabetes and Cardiovascular Disease. PLOS. [ONLINE] Available at: http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0163627. [Accessed 18 November 2016].
  6. FastCo News. 2016. Omada Health: We have the data to show we can reduce diabetes risk among seniors . [ONLINE] Available at: https://news.fastcompany.com/omada-health-we-have-the-data-to-show-we-can-reduce-diabetes-risk-among-seniors-4021929. [Accessed 18 November 2016].
  7. CDC.gov. 2016. National Diabetes Prevention Program | Diabetes | CDC. [ONLINE] Available at: http://www.cdc.gov/diabetes/prevention/index.html. [Accessed 18 November 2016].

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4 thoughts on “Omada Health: A Leader in the Digital Health Revolution

  1. This is great overview of Omada! Exciting to hear that they are now reimbursable by Medicare – that will be huge in reaching a segment of patients who are not already covered by employers yet suffer from chronic disease. I’d be curious to see what kind of partnerships they are exploring to further their reach. I imagine that relationships with TPAs such as Collective Health may be very valuable in providing access to self-insured employers. Separately, in response to your suggestion about entering into mental health, I’d love to get your thoughts on competitors like Lyra who are also trying to leverage data to provide evidence-based treatment in that space.

  2. I didn’t know how developed and effective Omada’s solutions are – great to learn about how they have been able to integrate more evidence of the effectiveness of their program into their value proposition!

    I 100% agree there is a big need for these types of services in the mental health space. It’s unfortunately still a taboo subject in many parts of the world and something that individuals can be very hesitant to obtain care for. You highlighted a few concerns about this market (revenue model, meausuring effectiveness of program) that I agree with – but I also think the larger question is how to drive engagement with the platform. For something widespread with relatively standardized care like diabetes, a platform like Omada works well. Patients hear diagnoses from their doctors and can take very concrete actions guided by Omada and others. For more nuanced mental health conditions, I still think there is a very high barrier to downloading and consistently using an app or program. Maybe there is a way to expand the solution so it touches more stakeholders (“influencers” in a patient’s life?) and helps drive engagement? I don’t know much about the various apps already entering the market, such as Lantern, but I suspect this is the central issue they are focused on.

  3. It’s great to hear that Omada is now covered by plans – this is one of those rare win-win-wins in healthcare where you can save money for payers and improve patient outcomes.

    A macroeconomic trend to watch out for in our new political climate is the potential impact that rolling back health coverage may have on programs like Omada. As general reimbursement policies shift for health plans I’m afraid that willingness-to-pay for preventative care may go down, even if the longer term benefit is great. The more that people are shifting between plans and employers, the less an individual plan cares about the future costs.

    As the other commenters mentioned, mental health is a good opportunity if Omada can get the right clinical evidence to back their efficacy claims. I’m hoping that health insurance companies will make the sustainable choice and continue the trend in investing in preventative non-pharmaceutical care for their patient base.

  4. Omada has an interesting take on the health scenario in that it can reduce the burden and bill of the traditional health care system. But the main challenge I see is its ability to scale this in order to reach the maximum number of patients possible in order to have a sizable effect. It makes sense that this is now being covered by government healthcare and there is plenty of role for government support given the effect of reducing the taxpayer burden by prevention.

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