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.

Correct me if I’m wrong – a payer would come to Omada and say ‘we want to adopt this program for our customers.’ Maybe this payer is involved in an ACO and clinical outcomes are wrapped up in their particular business arrangement with local providers. They would pay you a certain fee. You would go in and run the program - that’s how it would work?
That’s a pretty good skeleton. There’s obviously some nuance to how we’d work with each individual payer. In some ways you can imagine that it would work kind of like this: we’d knock on the door of either a self-insured employer that’s paying their employees’ health costs – like a Google or a GE. Most companies above 500 employees, it makes more sense for them to actually pay the insurance claims themselves.

We’d show them what we have. Hopefully, they’d choose to pay for it, and then from there, we’d work with them to figure out the best way to get the actual participants. So if we’re working with a private payer, maybe it’s direct to the members or through some sort of integrated practice group they’re working with, where people are being screened for diagnosis. And if we’re working with a self-insured employer, maybe they’re doing wellness screenings, or blood work for their employees already, and we would help find the people and bring them through our product.

So there’s a lot of nuances depending on how we best do that right now. Our key strategy here is to find the more consolidated channels, and work from there.

What will Omada be doing in the next 12 to 18 months? Will mobile health play a role in all this?
Your mention of a mobile app is spot on. It’s something we’ll absolutely do. It’s likely that it will be a complement to the Web program. We’re bringing people through the Web program, and there are discussion boards. We need the screen real estate to make that happen. There’s awesome opportunities for the mobile device to serve as kind of the piece that helps you track your food or the piece that interfaces with the Web software. That’s how we’re viewing it right now.

Right now we’re focused on two things – product, and then figuring out the best distribution partners. We’re running a larger prototype early next year, it probably get larger after that, and then there’s a few people that we’re in discussions with that could just be awesome partners that could help us try to get people out in the wild. It’s one thing to try to recruit people yourself, it’s another thing to run it through your program. We want to get this out there, run it through an employer organization, or a real clinical center as soon as possible. I imagine that will probably come in Q2 of next year.

As a young company, it’s hard to think even beyond that because things change so quickly.

Jennifer Dennard is Social Marketing Director for Atlanta-based Billian's HealthDATA, Porter Research and HITR.com. Connect with her on Twitter @SmyrnaGirl.