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Expansion strategy

By Stacy Lawrence

Staff Writer

Health care coordination programs, which integrate everything from machine learning, apps, connected devices and wearables to online and in-person care, seem to be the latest digital health investment trend. The aim is to offer programs that demonstrably improve patient outcome and costs with built-in analytics to prove it.

Livongo Health is the recipient of the latest financing to go to such a tech-based health care coordination startup that's focused on diabetes. It has raised $105 million in a financing dotted with high-profile venture and strategic names. Other recent rounds for a similar sort of startup went to Atlanta-based Bioiq Inc. and San Francisco-based Virta Health Corp. (See BioWorld MedTech, March 30, 2018.)

With an ever-growing diabetes population that's at risk of extreme complications – including blindness, amputation and even death – that can be reduced through lifestyle changes, it's an obvious potential fit for tech- and data-enhanced monitoring and behavioral management approaches.

Mountain View, Calif.-based Livongo plans to use this massive cash infusion to gain more market traction, employ data science to improve patient behavior, continue to improve its existing diabetes and hypertension programs and to further expand its chronic conditions platform.

"Through our data science platform, we have created a personalized rules engine that deliver insights and educational content to members at the moment of health impact," Livongo CMO Jennifer Schneider told BioWorld MedTech. "Livongo's data science team has combined over 20,000 rules with deep content and new machine learning insights to generate personalized bite-sized nuggets of information to drive behavior change."

"We target all people with diabetes for our diabetes program and all people with hypertension for our hypertension program," she continued. "Members using either platform have regularly interacted with the service through remotely monitoring their vitals [blood glucose for diabetes and blood pressure for hypertension], receive digital coaching services based off of their personal trends and patterns from the data, direct coaching interactions with our team of certified diabetes educators, and community interactions through polls and surveys."

Cambia Health Solutions, a Portland health care insurer, invested in Livongo as part of the round and also did a separate partnership deal to make its diabetes program available to patients enrolled in Regence Blue Cross and Blue Shield in Idaho, Oregon, Utah and Washington. Cambia and Mosaic Health Solutions jointly own Echo Health Ventures, which was the actual strategic investment entity in Livongo.

The partners expect to eventually expand the deal into co-development of personalized medicine tools for hypertension and even an integrated care offering. Livongo already has more than 350 self-insured, employer health systems and plans as well as pharmacy benefit managers as its customers, with over 70,00 active patient members.

"We see great potential in collaborating with Livongo to transform the experience Americans have in health and in sickness," said Cambia President and CEO Mark Ganz. "Livongo is a kindred spirit on our journey to make health care more person-focused and economically sustainable. Both companies are committed to a human-centered design approach and seamless experiences for individuals and their families."

Measuring care

Livongo aims to provide coordinated care solutions across chronic conditions since patients often have multiple, interrelated chronic health problems. About 70 percent of people with diabetes also have hypertension, for example.

"We know that conditions do not live in silos and, to truly empower people to live healthier lives, we must address all aspects of their health. We are committed to care for the whole person, physically, mentally and emotionally," Schneider said. "Our vision is to empower all people with chronic conditions to live better and healthier lives. In the coming years we will look to expand upon our platform and continually improve our offering in order to achieve that vision."

Livongo relies upon FDA-cleared devices, but has not pursued any regulatory blessing for its diabetes or hypertension programs.

The startup measures its relative achievements by tracking three key criteria: member satisfaction, clinical outcomes and cost savings. The company leads with the idea that if its patient member loves the experience, "everything else will follow," said Schneider.

She said the company has conducted studies showing an average 0.8 A1c reduction for members within the first 90 days across the Livongo population, which pushes some below the diabetic threshold. In addition, three years into the program, it has been shown to reduce hypoglycemia events in its members by 15 percent.

Finally, on cost savings, Livongo claims to have saved two large self-insured employers $83 per participant, per month on health care costs for members with diabetes, as compared to its non-members with diabetes.

"We see a ROI of two to four times for our customers. Early ROI in year one is driven mainly by utilization optimization, such as decreased ER visits, decreased in-patient admissions, lower acuity primary care office visits. The increased ROI in years two and three is driven by improved clinical outcomes," said Schneider.

Livongo has raised roughly $250 million since its inception in 2014, according to SEC filings. This most recent, a series E round, was co-led by existing investors General Catalyst and Kinnevik.

Existing investors DFJ, Kleiner Perkins Caufield & Byers , Merck Global Health Innovation Fund, Microsoft Ventures, Sapphire Ventures, Zaffre Investments and 7wire Ventures also participated alongside new investor Echo Health.

"Livongo has become the market leader by providing a delightful, evidence-based approach for improving quality of life for consumers with diabetes," said Hemant Taneja, managing director at early and growth stage Boston-based investor General Catalyst. "With the launch of its new hypertension offering, the company is quickly becoming a platform that delivers comprehensive care for consumers with multiple chronic conditions."

Chris Bischoff, a senior investment director for Swedish digital consumer-focused investment firm Kinnevik, who joined the Livongo board with this financing, said, "We believe they are on track to be the global leader in delivering real behavioral insights and science that enable people to truly live in healthier ways."

Published  April 16, 2018

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