The Time is Ripe for Healthcare IT Start Ups (Part 2)

In this week’s edition, I continue my conversation with Sean Duffy, CEO and co-founder of Omada Health, a start-up out of San Francisco focused on prediabetes prevention via online tools. You can read more about its origins in the first part of this blog series. This particular post will concentrate on anticipated clinical success (the company recently wrapped up a second prototype of the program), and the elephant that always seems to be in the same exam room as a big healthcare idea - the revenue model.

What benchmarks are you using in the prototypes to measure success?

Sean Duffy: There’s a number of metrics we’ll look at for success and outcomes. One is obviously weight loss. In the original clinical trial, it was very well shown that a reduction in weight of people that have prediabetes is a really nice proxy for the risk reduction in conversion to diabetes.

We’re measuring weight loss and we set group goals at the percent level. We’re measuring it through connected scales. We’ve got a number of those out right now. We mail participants one of these scales, and then when they step on it the data gets sent to us and appears in their private profile on the site. That’s how we monitor weight.

We’re also monitoring participation with the curriculum modules. We can tell if each person has completed each individual module and we’re taking record of that.

When do you anticipate starting the full, 16-week programs?

We’re going to do our first 16-week prototype early next year. Following, that we plan to get this out more in the wild with either a clinical partner, diagnostic partner, or an insurance partner in Q1, Q2.

From a revenue standpoint, because we’re focused on people with prediabetes, we’re able to show a shorter term ROI, and this is something we’ve found that insurance companies are starting to look into. Our primary customers from the payment side are self-insured employers and insurance companies who want to help contain their costs and who want to have healthier, happier lives.

The product itself will be consumer facing in terms of how it feels, how people go through it and the experience it provides. But fundamentally, it is a healthcare business model.

Would the participant ever have to pay to be a part of the program?

We might allow that. Ideally, the entity that receives the economic value from it should pay for it, in our opinion. There people willing to pay [individually] for these sorts of interventions. We do anticipate that a certain segment of the population would be interested in this, but on the whole, our feeling from talking to participants in our prototypes is they’d strongly prefer it be paid for. I guess that’s not a surprise.