Beth Houck, CEO, SonarMD

There are an increasing number of innovative, digital companies providing specialty value-based care (VBC) solutions. These platforms serve as an important bridge between patients, physicians and insurance companies, providing increased access to health care tools, consultations, and holistic disease management with the goal being to better manage a patient’s condition(s) before they escalate. This improves patient outcomes and reduces healthcare utilization, hence costs. Further, digital, specialty care companies address historic health care disparities in access to care by improving online access to specialty care providers.

Patients and providers are creating and using data

The World Economic Forum predicts that within the next seven years 30 percent of all the world’s data will be directly connected and stem from the healthcare industry.¹ Starting before the pandemic, but truly taking off in the United States when there was urgency to stay connected to patients during social distancing, digital health tools are collecting and aggregating data in multiple ways. Today, physicians are better able to closely monitor their patients through the use of enterprise systems with predictive analytics tools, electronic medical records and point of care tools that connect health systems, individual providers, and hospitals, and, perhaps most importantly, the increasing use of digital health tools by patients.

Beyond attending telehealth appointments, which help overcome barriers to primary and specialty care created by location, costs (missed work, childcare, parking, etc.), or social stigma,² patients contribute data by engaging with fitness/lifestyle wearables, diagnostic monitoring devices and/or biometric sensors, and inputting data into remote patient monitoring devices, platforms, and apps.

Leveraging these technologies and harnessing the immense output of data has made value-driven care more than a buzzy concept, but a practical and highly desirable healthcare model to improve patient outcomes and drive down health costs. This change was supported by the Affordable Care Act and subsequent formation of Accountable Care Organizations that transformed how healthcare is conceived, delivered and paid for.^3,4

Hence, providers and companies that specialize in VBC care are attractive to investors because of measurable, data driven outcomes.⁵ Data suggests that digital health funding is on track to surpass the funding peaks of 2019 and 2023, underscoring a robust investor confidence in digital health innovations.⁶

Digital specialty care further boosts value-added solutions

One of the most promising applications of digital health tools, platforms and apps is the ability to address specific patient populations, thereby improving the ability of individual patients and their providers to monitor the escalation of symptoms, treatment experience, and delivery of additional holistic, supportive interventions.

For example, gastrointestinal (GI) care is $136B of medical spend in the US, which is more than heart disease ($113 billion), trauma ($103 billion), or mental health ($99 billion).⁷ Recent estimates suggest that the U.S. inflammatory bowel disease (IBD) treatment market size is worth USD 9.37 billion in 2022, with a projected growth at a CAGR of 5.5% during the forecast period.⁸ IBD is high cost because these patients (those specifically diagnosed with either ulcerative colitis or Crohn’s disease) always requires close monitoring to reduce the risk for complications that lead to lengthy hospital stays and significant medical spend.

SonarMD is a digital, holistic health platform for IBD patients enrolled in one of the large health plans that are in a value-based arrangement with us. Each month patients take secure, clinically-validated, text-based symptoms surveys to evaluate their symptoms and calculate their degree of risk of deterioration. Studies show that the program significantly reduces emergency department visits and in-patient admissions compared to risk-matched control groups, meaning healthcare utilization is down. For example, in a retroactive, 24-month study comparing a SonarMD engaged population (n=495) with IBD against a risk-matched, control population (n=2,695) in New Jersey, in year one (2021), the rate of IBD-related emergency department visits for the SonarMD cohort was 18% lower than the control group and in year two (2022) the rate was 46% less. Similarly, hospital admissions were down by 20% in year one and down 78% in year two compared to the control group.⁹

Another digital specialty organization with validated health outcomes is Omada Health, which services people living with diabetes, hypertension, or musculoskeletal conditions. Their peer-reviewed data shows high engagement with their platforms, reduced healthcare utilization, and improved patient outcomes.¹⁰ For example, one study shows that the estimated gross savings in medical expenditures across their cardiometabolic programs in 2022 dollars were $892 to $1,342 after one year, and cumulative estimated gross medical savings were $2,963 to $4,346 after three years and $5,221 to $7,756 after five years.¹¹

Similarly, Wildflower Health, a specialty company specializing in virtual workflows for maternal health, reported improved outcomes and reduced costs, particularly in high-risk women.¹² Recent claims data from a large, national insurer demonstrated a $43,000 lower claims costs per high-risk user and $2,000 lower claims costs per healthy user who were enrolled in the program.¹³

These examples demonstrate how VBC puts patient outcomes first but keeps the business of medicine in mind by reducing costs.

What’s next for value-based care

Interestingly, SonarMD and Wildflower Health are two value-added, specialty care companies that are led by women and there are many others including Iron Health, Tailor Care, Midi Health and Maven Clinic, to name a few. What is driving this trend when across healthcare women remain underrepresented in leadership roles?¹⁴ Research suggests¹⁵ that it might have to do with their ability to embrace change while dialing down risk, plus women-led companies are often more profitable.¹⁶ 

Beyond women taking the lead, experts predict increasing growth of VBC stemming from the combination of patients’ increasing comfort with and use of digital tools and the refinement of contractual arrangements between companies, payers, and providers. That being said, risk agreements need to take into account different U.S. state laws that determine the levels of risk that providers and/or intermediaries may take. This barrier will get smoothed out as the health care industry, as a whole, increases familiarity with VBC partnerships.¹⁷ Very likely the forthcoming 2030 deadline set by Medicare/Medicaid to have 100 percent of Medicare users in an accountable relationship will drive additional VBC opportunities.¹⁸

It seems obvious that individual patient outcomes should drive health care decisions, but for many decades, the mechanisms were not in place to deliver primary and specialty care to patients, whether they lived near medical centers of excellence or in more rural locations. Innovative digital health care companies are helping healthcare reach more patients with more specificity and more affordability, which will improve outcomes and reduce everyone’s costs.

Beth Houck, CEO of SonarMD

References

1. World Economic Forum. “How data-driven digital healthcare tools cut costs and boost outcomes,” Jan. 4, 2024. Last accessed on 9-6-24 at https://www.weforum.org/impact/how-digital-healthcare-tools-cut-costs-boost-outcomes/
2. Wolters Kluwer. “Telehealth in care deserts: Helping to overcome barriers created by location, costs, or social stigma,” March 14, 2024. Last accessed on 9-6-24 at https://www.wolterskluwer.com/en/expert-insights/telehealth-in-care-deserts-helping-to-overcome-barriers-created
3. Corinne Lewis et al., “Evidence from a Decade of Innovation: The Impact of the Payment and Delivery System Reforms of the Affordable Care Act,” Commonwealth Fund, Apr. 2020. https://doi.org/10.26099/5rj7-9319 Last accessed on 9-6-24 at https://www.commonwealthfund.org/publications/2022/apr/impact-payment-and-delivery-system-reforms-affordable-care-act
4. Corinne Lewis et al., “Value-Based Care: What It Is, and Why It’s Needed” (explainer), Commonwealth Fund, Feb. 7, 2023. https://doi.org/10.26099/fw31-3463
5. McKinsey. “Investing in the new era of value-based care” Dec. 16, 2022. Last accessed on 9-6-24 at https://www.mckinsey.com/industries/healthcare/our-insights/investing-in-the-new-era-of-value-based-care
6. Rock Health. “H1 2024 digital health funding: Resilience leads to brilliance” July 8, 2024. Last accessed on 9-6-24 at https://rockhealth.com/insights/h1-2024-digital-health-funding-resilience-leads-to-brilliance/#:~:text=In%20H1%202024%2C%20U.S.%20digital,labeled%20raises%20in%20the%20half
7. Peery AF et al. Burden and cost of gastrointestinal, liver, and pancreatic diseases in the United States: Update 2018. Gastroenterology 2018 Oct 10; [e-pub]. (https://doi.org/10.1053/j.gastro.2018.08.063) Last accessed on 9-10-24 at https://www.jwatch.org/na47723/2018/10/23/burden-and-costs-gastrointestinal-disease-us
8. Fortune Business Insights. U.S. Inflammatory Bowel Disease Treatment Market. Last accessed on 9-6-24. https://www.fortunebusinessinsights.com/u-s-inflammatory-bowel-disease-treatment-market-108774
9. Press release. SonarMD. New Peer-Reviewed Clinical Studies Show SonarMD Reduces Emergency Department Visits and Hospitalizations for Patients with Ulcerative Colitis and Crohn's Disease. May 21, 2024. Last accessed on 9-11-24 at https://www.prnewswire.com/news-releases/new-peer-reviewed-clinical-studies-show-sonarmd-reduces-emergency-department-visits-and-hospitalizations-for-patients-with-ulcerative-colitis-and-crohns-disease-302148484.html?tc=eml_cleartime
10. Omada. Peer-reviewed Studies. Last accessed on 9-6-24 at https://resourcecenter.omadahealth.com/peer-reviewed-studies
11. Noble M, Chen F, Linke S, Dall TM, Napoleone J. Modeling the economic value of cardiometabolic virtual-first care programs. Am J Manag Care. 2024;30(6 Spec No.):SP430-SP436. doi:10.37765/ajmc.2024.89549 Last accessed on 9-10-24 at https://resourcecenter.omadahealth.com/peer-reviewed-studies/economic-savings-model-for-omada-s-cardiometabolic-programs
12. Wildflower. Providers. Last Accessed on 9-6-24 https://www.wildflowerhealth.com/clients/providers
13. Press release. New Cigna Pregnancy App Enables Improved Health and Lower Costs For Pregnant Women. Last accessed on 9-10-24 at https://www.businesswire.com/news/home/20181107005053/en/New-Cigna-Pregnancy-App-Enables-Improved-Health-and-Lower-Costs-For-Pregnant-Women
14. McKinsey & Company. Women in healthcare: Moving from the front lines to the top rung. April 25, 2020. Last accessed on 9-10-24 at https://www.mckinsey.com/industries/healthcare/our-insights/women-in-healthcare-moving-from-the-front-lines-to-the-top-rung
15. Harvard Business Review. Research: Adding Women to the C-Suite Changes How Companies Think. April 6, 2021. Last accessed on 9-10-24 at https://hbr.org/2021/04/research-adding-women-to-the-c-suite-changes-how-companies-think
16. Business Leader. Research shows companies with female CEOs are more profitable. September 29, 2022. Last accessed on 9-10-24 at https://www.businessleader.co.uk/research-shows-companies-female-ceo-more-profitable/
17. Holland & Knight. Key Value-Based Care Developments to Watch in 2024. March 4, 2024. Last accessed on 9-10-24 at https://www.hklaw.com/en/insights/publications/2024/03/key-value-based-care-developments-to-watch-in-2024#:~:text=Building%20upon%20considerable%20activity%20over,and%20wellness%20of%20each%20patient
18. CMS. INNOVATION CENTER STRATEGY REFRESH. Last accessed on 9-10-24 at https://www.cms.gov/priorities/innovation/strategic-direction-whitepaper