Apps and software services for health care are proliferating–challenges and hackathons come up with great ideas week after week, and the app store contains hundreds of thousands of apps. The hard thing is creating a business model that sustains a good idea. To this end, health care incubators bring in clinicians to advise software developers. Numerous schemes of questionable ethics abound among apps (such as collecting data on users and their contacts). In this article, I’ll track how Twine Health tried different business models and settled on the one that is producing impressive growth for them today.
Twine Health is a comprehensive software platform where patients and their clinicians can collaborate efficiently between visits to achieve agreed-upon goals. Patients receive support in a timely manner, including motivation for lifestyle changes and expertise for medication adjustments. I covered the company in a recent article that showed how the founders ran some clinical studies demonstrating the effectiveness of their service. Validation is perhaps the first step for any developer with a service or app they think could be useful. Randomized controlled trials may not be necessary, but you need to find out from potential users what they want to see before they feel secure prescribing, paying for, and using your service. Validation will differentiate you from the hoards of look-alike competitors with whom you’ll share your market.
Dr. John Moore, co-founder of Twine Health, felt in 2013 that it was a good time to start a company, because the long-awaited switch in US medicine from fee-for-service to value-based care was starting to take root. Blue Cross and Blue Shield were encouraging providers to switch to Alternative Quality Contracts. The Affordable Care act of 2010 created the Medicare Shared Savings Program, which led to Accountable Care Organizations.
The critical role played by value-based-care has been explained frequently in the health care space. Current fee-for-service programs pay only for face-to-face visits and occasionally for telehealth visits. The routine daily interventions of connected health, such as text messages, checks of vital signs, and supportive prompts, receive no remuneration. The long-term improvements of connected health receive no support in the fee-for-value model, as much as individual clinicians may with to promote positive behavior among their patients.
Thus, Twine Health launched in 2014 with a service for clinicians. What they found, unfortunately, is that the hype about value-based care had gotten way ahead of its actual progress. The risk sharing by Accountable Care Organizations, such as under the Medicare Shared Savings Program, weren’t full commitments to delivering value, as when clinicians receive full capitation for a population and are required to deliver minimum health outcomes. Instead, the organizations were still billing fee-for-service. Medicare compared their spending to a budget at the end of the year, and, if the organization accrued less fee-for-service billing than Medicare expected, the organization got back 50-60% of the savings In the lowest track of the program, the organization didn’t even get penalized for exceeding costs–it was just rewarded for beating the estimates.
In short, Twine Health found that clinicians in ACOs in 2014 were following the old fee-for-service model and that Twine Health’s service was not optimal for their everyday practices. A recent survey from the NEJM Catalyst Insights Council showed that risk sharing and quality improvement are employed in a minority of health care settings, and are especially low in hospitals.
Collaborative care requires a complete rededication of time and resources. One must be willing to track one’s entire patient panel on a regular basis, guiding them toward ongoing behavior modification in the context of their everyday lives, with periodic office visits every few months. One also needs to go beyond treating symptoms and learn several skills of a very different type that traditional clinicians haven’t been taught: motivational interviewing, shared decision making, and patient self-management.
Over a period of months, a new model for Twine’s role in healthcare delivery started to become apparent: progressive, self-insured employers were turning their attention to value-based care and taking matters into their own hands because of escalating healthcare costs. They were moving much quicker than ACOs and taking on much greater risk.
The employers were contracting with innovative healthcare delivery organizations, which were building on-site primary care clinics (exclusive to that employer and located right at the place of work), near-site primary care clinics (shared across multiple employers), wellness and chronic disease coaching programs, etc. Unlike traditional healthcare providers, the organizations providing services to self-insured employers were taking fully capitated payments and, therefore, full risk for their set of services. Ironically, some of the self-insured employers were actually large health systems whose own business models still involved mostly fee-for-service payments.
With on-site clinics, wellness and chronic disease coaching organizations, and self-insured employers, Twine Health has found a firm and growing customer base. Dr. Moore is confident that the healthcare industry is on the cusp of broadly adopting value-based care. Twine Health and other connected health providers will be able to increase their markets vastly by working with traditional providers and insurers. But the Twine Health story is a lesson in how each software developer must find the right angle, the right time, and the right foothold to succeed.