OVERVIEW
On March 12, 2021, Tom interviewed Upswing Health's Co-Founder & President, Dr. Jay Kimmel, and CEO, Adam Tibbs. We discussed the rapid growth of digital-first solutions, patient engagement, end-market demand, as well some of the nuances of Upswing's offering and how a "virtual front door" can improve musculoskeletal (MSK) care.
TAKEAWAYS
- We think Upswing is a great example of a product that can actually work and improve the patient journey in a value-based/at-risk environment, which is clearly the direction the US Medical Economy is moving. By improving access and pathways, PCPs and specialists can both benefit. There will likely be less imaging and utilization will be different (virtual PT vs. office visits, for example).
- Employers appear to be [very] willing to discuss and trial a product like Upswing's. MSK is a top-3 cost for most employers on the benefits side, and the potential savings are material if waste can be eliminated (we did not realize that ankle sprains cost large plans millions-of-dollars every year; a non-surgical episode is $420 without Upswing - it's $62 with Upswing).
- Engagement, engagement, engagement ... and trust. Products/services that keep members/users engaged and guide the care of chronic diseases will win. Platforms that people trust to diagnose an issue and steer care can win too. Anyone stuck in a fee-for-service model may lose in the long run.
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CALL NOTES
*Lightly edited for clarity and length; emphasis added.
Background
Dr, Kimmel is a director of a number of local (CT-based) associations and an advocate of value-based care. The co-founders realized that orthopedic care needed to change/evolve. When there's an orthopedic problem, patients want to speak with someone. In sports medicine, athletic trainers (certified) are really good at helping people with most problems, so they became Upswing's health coaches. And, there's a platform that allows for easy access to a specialist (primary care sports medicine specialists). If that's not enough, some people may need to see an orthopedic surgeon, and Upswing facilitates that transition too.
What's interesting about Upswing is that it provides very easy access to help and deal with recovery from orthopedic injuries. It enables anyone to figure out what's wrong and get on the right path to get better.
How does it work (use cases and "special sauce"), and where is it going?
- AT: We're laser-focused on orthopedics. We have ~20 orthopedic specialists that have developed the algorithm to identify injuries, and that can eventually be used in a bunch of adjacent sectors; however, we're staying focused for now. We know that people want to relate to a human, not just software, so everyone gets a coach. We have a great CRM tool and a ton of triggers around outreach, which helps make sure people are appropriately messaged/supported, but there's the behavioral science aspect of it too.
- JK: Part of the program is to reach out to and engage patients. That's the nice thing about digital - Upswing can reach out using evidence-based motivational science messaging. Sometimes people don’t want to do "it," so we can set goals, structure, provide visualizations, and convey other information that helps people move down the right path.
How do you get paid and what's the model?
- AT: We're trying to go toward a value-based framework (vs. mostly fee-for-service today). We don't think incentives are aligned, so we're on the trend toward bundle-based payments for a procedure, or around the condition (e.g., what does "hip pain" cost). There's also savings-based models - if we can prevent unnecessary imaging, surgeries, etc. by addressing things earlier and most appropriate way. Cost savings can be tremendous (~$350 per episode on non-surgical cases) - the vast majority of cases can be settled at home w/ the appropriate tools and oversight.
- Because of that, we prefer a PMPM model. We'd like to participate in the savings.
Why not partner with the physical therapy on the backend and work into the population health management stuff? Could you be displaced?
- AT: The most important thing is to get people into the system - that's where the savings start. When people don't have access or understand where to go, they get pushed around by a system designed to maximize costs/utilization. We want to redesign the workflow - direct and steer patients, avoid downstream costs.
- There are all these different revenue models - FFS is the simplest, but there's no accountability or aligned incentives. Different payers, government or commercial, are trying different things, so we need to be nimble and wedge our way into deals.
What are clients' needs and wants? As we think about Livongo selling into Teladoc's client base, is it a warm room?
- AT: There's tremendous spend in MSK - it's always top three. About 1/3 of Americans will spend money on orthopedic issues - direct costs over $200B, but it's not always effective and patients aren't always happy. w/ outcomes. One of our customers spends $225 million annually on MSK. By just reducing office visits, we think we can shave 10% off that (just workflow changes - i.e., talking to the right person first).
- There's lots of low-hanging fruit - that said, there are a ton of point solutions - Livongo, women's health, better ways to do primary care. Each niche is huge, but they all compete on the sales cycle - self-insured employers are getting pitched by other MSK solutions, or behavioral health, or whatever. Everyone is thinking about digital-first solutions.
It's interesting to think that more access can reduce costs... digital-first is new b/c of COVID?
- AT: It's not only easier to close, but it's faster - a 12-18-month sales cycle is now 3-4 months because it's a priority. You must have a digital-first option. If you don't have one, you're behind. The race is on with where people are placing their bets. There's an appreciation for [Upswing] starting at the beginning of the episode, pre-diagnosis vs. virtual PT (incredible model, very efficient).
Do you think you'll maintain relationships with patients?
- AT: Yes, for sure. forget about lifetime value for a minute. We want to make sure that we're using the digital tools at our disposal - the CRM. If we make sure communication, patient engagement, etc. is helpful, we're following them. Engagement is critical w/ out thinking about it from an LTV perspective. 70% of people who run once a week have knee problems - that's ongoing. So, the LTV is astounding. If we can provide amazing customer services and get people better, we've got them for life.
From the "hammer side" - this digital relationship happens away from the surgeon, right? Is it threatening to you and your peers (Dr. Kimmel)?
- JK: Really good orthopedic surgeons - specialists in general - understand that changes must be made. It doesn't’ make sense to see a specialist if you have a day of knee pain. We want to see people who need to see us. The beauty of Upswing is you can have patients get better on their own after seeing someone operating at the top of their license, then, they can see me if they need to. This is disruptive and there's some pushback, but it's the future.
Payers started to put up gates - lose weight before getting a total knee, do PT, go through the pathway before surgery. Is Upswing a "friendlier" way to put someone through the system? What percentage of visits to an orthopedic surgeon could have been handled by Upswing?
- JK: It depends on the specialty - most practices operate on a small percentage of people. In a value-based world, that percentage would increase. Also, in a more high-value system, you don't want people waiting to get into a surgeon's office - you want to improve access. Everyone wins.
- There’s plenty of capacity out there - yes.
What is your hospital/health system going to do with these solutions?
- JK: I think an Upswing represents the future in any system. We don't want the barriers from insurance companies. That's not high-value. A better way is to help people w/ digital when they need it, and when they need to get into my office, facilitate it. You need access to the right care. An ankle injury, for example - an employer spending $2 million - $3 million for ankle sprains per year is ridiculous. If you can talk to a trainer and not go to the ER tonight, you can save a lot of money.
As much as COVID pushed things, it's still early, right? What's the future state and how do you see the pieces coming together?
- AT: There are a couple of pieces of this - the part that identifies what's wrong, then the piece that helps connect to someone to help, or activities at home, if that's the right path, then there's the telehealth visit, referrals, and virtual PT. All of those may need to happen if you've got an injury. Each one has a business model impact. What's happening is there's a trend away from FFS to pay for outcomes. We are identifying ways to find patients/members and become embedded with providers dealing with patients - e.g., the Advanced Primary Care space. Plugging in, white-label, to a new PCP group is an option. These new APC models will win. We want to plug-in there (spend on MSK is $40B - $50B annually).
- The beauty of MSK is that it's not life-threatening - it's not like a heart attack. So that helps us, diabetes chronic care players, and others.
How hard is it to show ROI or price as a percentage of cost savings?
- AT: It's hard to define the denominator - once you get to that, then it helps. There's a degree of trust, and also some "dark science" in it. We would rather have a PMPM vs. PEPM - need to have a lot of control over customer acquisition on the latter. If we don't have total control over messaging, outreach, etc. you aren't in control. PMPM, everyone has skin in the game - everyone has an incentive to use the system. The challenge is showing the ROI - having enough data, "Yes, it's worth $X per member per mo because save you 1.X times that."
How's the relationship with the member? What is the trajectory of user/member growth?
- JK: They love us. We don't have a huge base, but almost every comment could be on our website.
- AT: We've had 50% mo/mo growth - over 150k people engaged w/ or used the system from 4Q19 through 2020 - we intentionally opened it up, gave it away, PR component, but we had the capacity to build up the doctor base athletic trainer, health coaches, and test the system, make sure working. Phenomenally successful with no real advertising. We did do some SEO work - each condition has a page. That has driven tremendous traffic. We have a cash price version too. Also, we're working directly with payers, TPAs, self-insured employers, APC groups, IPAs, exchange payer programs - there are some huge deals either signed or almost signed... the pipeline is crazy. We're batting 1.000 thus far because the offering is unique. We think we'll have 10-ish million lives by mid-2022 (up from ~500k today).
If the digital front door is successful, who loses?
- JK: If we put people on the right path early, there will likely be fewer unnecessary surgeries. There could be less imaging - we know there's a lot of excess imaging. So many patients have had an MRI at 70-80 years old. If they came to Upswing, they'd have had some virtual PT and no MRI. I think some of that imaging goes away. Also, unnecessary ER visits (subsequent follow-up indicated that about 20% of ER visits are MSK-related). The majority of people that are referred for a total knee need a knee replacement.
- AT: I think you go to the PCP if your knee hurts, then get an X-ray, and go to a specialist that says you don't need knee surgery - that's 60-80% of cases. You/your insurance company might spend $500 to get you to that point where you must just go home and stretch. That $500 - anyone collecting fees on that loses out, except that's not where the puck is going. Paying for outcomes - the APC model, the doctor is getting paid to manage you for the year, not per-visit.
Digital health sounds deflationary - is it?
- AT: Yes - a non-surgical episode is $420 without Upswing - it's $62 with Upswing.
- JK: To that point - the winners will be those that adopt value-based care. The losers are going to be those stuck in a FFS model.
COVID-19 - we've been having a debate about pent-up demand and the deferral of care. Jay, we know orthopedic surgery got whacked. How will it come back?
- JK: There's a tremendous built-up demand. we'll see that, many people delayed - it'll be trend-plus. Not sure how long it'll take, but there's no question that numbers are down, and starting to see more. patients didn't want to do this because of COVID.
- I think 20-30% more based on people delaying surgery - at least in CT - and we've been able to do more elective, relatively speaking.
Sense of telemedicine? Do you want to get patients back in-person?
- JK: Doctors want to see patients and patients want to go to doctors' offices too. Trendline for specialists, telehealth visits will go down. The right mix of in-person and telemedicine is subspecialty dependent. A hand surgeon or foot and ankle surgeon would not have embraced telemedicine as I did.
About the Speakers
Dr. Jay Kimmel is the co-founder and President of Upswing Health, the country’s first virtual orthopedic clinic. Dr. Kimmel is a practicing orthopedic surgeon specializing in shoulder and knee injuries with Advanced Orthopedics New England and an attending at St. Francis Hospital. He attended Cornell University in New York and then the University of Rochester where he earned his doctorate in medicine. He completed his orthopedic residency at Columbia Presbyterian Medical Center where he trained with some of the pioneers in shoulder surgery and then went on to do a fellowship in Sports Medicine at Temple University Center for Sports Medicine in Philadelphia. Dr. Kimmel is a fellow of the American Academy of Orthopedic Surgery and is board-certified in Orthopedic surgery (w/ a subspecialty certificate in Orthopedic Sports Medicine).
Adam Tibbs is a successful entrepreneur with a proven 18-year track record of turning technological innovations into meaningful companies, and ideas into household names. Prior to co-founding Parasail, he co-founded and served as CEO of Terrestrial Light which developed nearcasting technology. Previously, he served as President of San Francisco-based Project Frog, an award-winning cleantech company that creates green, component-based buildings for the commercial sector. As president, he helped lead the company from inception to scale, raising $35M along the way. Prior to Project Frog he ran a hands-on business incubator, funding and taking various executive roles in companies he conceived or helped develop: Daily Candy, Privista, eFarm, FOB Connect, and Soundlinks to name a few.
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Thomas Tobin
Managing Director
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