Healthcare Digital Therapeutics & Cost Savings

Goals

To locate research that explains if there is a financial impact or ROI from the use of healthcare digital therapeutics for employers, health plans, or consumers.

Early Findings

Background Information

  • DTx (digital therapeutics) development costs are significantly less than typical pharmaceuticals, which usually take billions to bring to market. But cost is just one of a growing number of factors that are attracting more and more people to take DTx seriously.
  • A May 2019 forecast by Juniper Research predicted a 1,000 percent growth trajectory over the next five years to more than $32 billion.
  • Unfortunately, many DTx (like virtual reality, or “VR”) still aren’t readily available to the average patient: they haven’t been widely adopted by the provider community, haven’t been fully cleared by the FDA and, in many cases, haven’t been approved for reimbursement by payers.
  • Medicare will not reimburse digital therapeutics yet, although legislation has been drafted to address this. It is currently stalled in Congress.

Applied VR

  • AppliedVR has undertaken multiple studies to validate that its program is both an effective treatment and is cost-effective as compared to modalities like pharmacological interventions.
  • They also recently published results from an RCT that looked at VR’s feasibility and effectiveness as a self-administered, at-home treatment for chronic pain, something that’s increasingly important ever since COVID-19 disrupted in-person care. The data suggested an at-home, self-administered treatment program is feasible and effective, reducing pain intensity and improving quality-of-life metrics by 30 percent or more.

The Benefits Guide

  • According to the Benefits Guide, digital therapeutics can reduce the direct and indirect costs associated with chronic illnesses. According to a study by the American Diabetes Association, the cost of diagnosed diabetes in 2012 was estimated at $245 billion. This included $176 billion in direct medical costs and another $69 billion in reduced productivity. Although you’ll spend upfront dollars in enrolling your eligible employees in digital therapeutic plans, the cost associated with the plans is consistently lower than the cost of ignoring the chronic illness among your staff. Several companies price digital therapeutics so that you’re likely to see an overall cost reduction year over year.

Virgin Pulse

  • Virgin Pulse offers a high tech well-being solution for employers. It seems this platform attempts to address how unhealthy choices are a substantial part of our healthcare spending. $1 out of every $4 is spent on poor health choices by the patient.
  • Their platform, which combines technology, wearables, and a consumer platform that increases engagement claims the following:
  • 47% lowered their blood pressure.
  • 60% that were sedentary, now are active.
  • They published a white paper detailing their program.

Better Therapeutics Research- 2019

  • The economic analysis estimated cost savings of $145 per patient per month (PPPM) in diabetes, and $97 PPPM in hypertension, a reduction of 22-29% in total medical costs.
  • These savings are realized by addressing the behaviors and lifestyle factors that are the root causes of disease, reducing the ongoing need for prescription medications. The potential cost savings increases substantially (30-60%) in moderately severe to severe patient populations. The intervention would be cost-effective at total three-year program costs of $6,468 for diabetes and $6,620 for hypertension.

Results of Initial Research

  • There appears to be a considerable amount of information on DTx and their cost saving abilities across multiple health verticals.

Proposed next steps:

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