Overview
We spoke with a 20+ year veteran of the health care IT industry, with a focus on remote patient monitoring, AI, and data solutions/integration. The field is incredibly competitive, and he reiterated that many of the devices are commodities, as we've heard before. "There's a lot of capital backing these companies and devices but not a lot of differentiation." Everyone is trying the SaaS model, leveraging HIPAA compliance, security, and flexibility (i.e., they take a "device agnostic" position). However, it's not as easy as saying "all devices are supported" via Bluetooth or Wi-Fi, because there are lists of devices that can be integrated with the systems. It doesn't look like any system can actually connect to any device. This plays well with our thesis on $MASI and the competitive dynamics. His positive bias on $GDRX reinforced our view that the Rx coupon company is uniquely positioned and has a legitimate opportunity to tie everything together around the patient.
Field Notes
Thoughts on GoodRx and real-time benefit check for prescriptions?
- GoodRx is doing great work and could evolve into a one-stop shop - the ability to tie everything together (PBM w/ national pharmacy services w/ RPM and a wellness plan, telehealth, etc.) is huge. Adding telehealth/virtual visits was a great move.
- The ability to aggregate services for all those app users and work with everyone in the chain is differentiated.
$TDOC, $AMWL, and MDLive are all good but are passive. Anthem w/ Tyto Care is passive. Everyone is looking into how to be proactive vs. reactive and how to manage chronic patients - i.e., provide personalized communication to the patient. This is why adding $LVGO to $TDOC makes sense - it introduces the active component with AI and the coaches.
- Does LVGO do anything special? They have a good management team and great marketing.
- AI is very important and they do amazing work; however, the AI isn't all that differentiated (nobody can really say, "I've got better AI" - it's hard to compare apples-to-apples").
- Diabetes is a huge market - room to expand/recruit more patients.
- Coaching - Livongo's coaching is amazing and a very important part of the process. The coaches know how to use the tools available and can help increase the capacity to serve patients by 50%.
$CVS, $WBA, and $WMT - Everyone has clinics now, and most are trying to get into the home. the pace of investment is accelerating, but I haven't seen something new from anyone. That said, these companies are assisting patients.
Who / which company should we be following most closely?
- Right now, the leaders are companies like Amazon, CVS, Google, and Microsoft. We have to watch them because they are watching - "observing like an eagle in the sky - they can stay up there for days."
- The payors have been gatekeepers - they are very important. Look at Anthem, which is taking each segment of the member base one at a time. Managing vitals, patient/member education, population management, Rx. They are trying to piece it all together for 42MM members.
RPM: Addressable market estimates continue to rise. What was expected to be a $1.4B - $2B market is now looking like a $3B - $4B market. COVID changed everything, + CMS is pushing. There are more codes now and it looks like there's a lot of overlapping billing. If players understand this there are very positive scenarios (e.g., services can be bundled).
- One underappreciated issue: 7-8% of the patient population does not have a smartphone and LTE is needed for continuous monitoring (estimated cost = $10-20/patient). This is significant because if we start with a $100 budget, hospitals will want 20%, the home care company will want a cut, device makers a cut, practitioners a cut, and so on. It's hard to know how the economics will shake out.
- It's not clear who the "champion" will be - I saw two new companies today. One looked very promising (AI) but it ended up being "me too." Everyone has a telehealth component, a remote monitoring piece (equipment or service), patient education... Incentives still aren't aligned to prevent costly episodes.
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