Gatekeepers, Sheriffs, and Champions: The Role of HR Benefits Managers in the Era of Digital Health
In September, Rob Coppedge of Echo Ventures made waves with a CNBC-published commentary “Digital Health is Dead.” The content of his piece, however, delivered more nuance than its headline. Rob’s issue was not with the rise of an industry that has brought unprecedented consumer focus and innovation to a stagnated healthcare system; his critique was instead focused on the buzzword-focused ecosystem that has grown up around it. The final section of his piece is titled “Digital Health is Dead - Now the Work Begins.”
A week later, I gave a keynote at the Stanford’s Health Care Innovation Summit 2017, where I argued that an unlikely, and often-overlooked group will have an outsized influence directing that work: HR Benefits Managers at large corporations. (You can get the full event recording here or jump to Sean's talk.)
As much as any other group, these individuals have an ability to demand more of our still-nascent industry — more evidence, more personalization, and more systematic alignment between the interests of vendor, payer, and patient. In the next five years, this group will be the key gatekeepers to determine what is required from digital health companies looking to succeed.
The reasons are manifold. First, self-insured employers represented more than a quarter of all healthcare spending in 2016 at more than $600 billion; this was more than two thirds of all spending in the private sector. Secondly, a disproportionate number of early digital health companies targeted the employer benefits market as their core go to market strategy.
But the rise of digital health has posed a challenge for those who make decisions about company benefits. They are now required to evaluate solutions in a noisy, crowded, and ever-growing industry that barely existed a decade ago. Finally, they are doing so in an environment without a standard evaluation playbook.
So in the Wild West of employer-focused digital health, how should benefits managers act as sheriffs, and gatekeepers? In my talk, I suggested five key evaluation criteria that should be central as benefits managers field pitches from digital health companies seeking to serve their employees.
Demand the Evidence
Too many digital health technologies have become solutions in search of populations — or more accurately, solutions in search of the largest possible populations. To be evidence-based, a digital health solution must first start with an established clinical need, target a specific population, and deliver a clinical solution grounded in published evidence. At Omada, we’ve sought since Day 1 to be able to pass the “Medical Director Test,” meaning we’ve believed we need to be able to walk into the office of Medical or Benefits Director, and make an evidence-based argument about the effectiveness of our solution. That means building on an established clinical intervention.
Show Me it Works — in the Real World
Beyond clinical evidence, benefits managers should also insist on seeing that the product or solution works with real-world populations analogous to their employees. Digital health companies need to demonstrate durable, verified results outside of study control, and with diverse populations. To date at Omada, we’ve published nine peer-reviewed studies, as well as case studies showing how we deliver results with workers, seniors, low-income populations, and veterans.
Align Incentives, Price on Outcomes
Digital health can’t simply be about the bright, new, shiny technological innovation; it must also focus on improvements to the benefits system via operational innovation. That means rejecting the per-employee, per-month revenue structure too often favored. Benefits managers must demand that digital health solutions align incentives by pricing their solution based on delivering the results they promise.
Personalize, at Scale
One of the central promises of the digital health revolution was to bring the consumer-focused personalization of Netflix and Amazon to healthcare. So benefits managers should insist that digital delivers experiences tailored to the needs of individual users. A one-size-fits-all approach undermines the unique ability of technology to deliver a precise intervention at a population health level.
Finally, digital health solutions can’t exist wholly outside the health plan and provider infrastructures already developed by self-insured employers. As the new entrants to the space, it is on us as innovators to find ways to integrate our solutions into the existing infrastructure. This could mean plugging into an EHR system, or directly connecting to provider referrals; it may mean aligning billing systems through a business’ medical spend. But employers should expect digital health companies to have thought through how their solution maps onto legacy systems.
If digital health is truly entering its “post-hype” phase — and I believe it is — the next phase of industry evolution will depend on how companies adapt to an increasingly-sophisticated buying audience, matching up to serve specific clinical-need populations, solve specific problems, an follow specific rules for success. HR benefits managers have a fundamental role to play in writing that rulebook.