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Peterson Center Kills the Diabetes Industry Dead

March 22, 2024 8:11 am

Last week the Peterson Health Technology Institute (PHTI, part of the Peterson Center on Healthcare) published the seminal report on the diabetes digital health industry, concluding that (with the clear exception of Virta, which we have also strongly endorsed) the minor health improvements claimed by Livongo, Omada and others nowhere near offset the substantial cost of these programs.  To which we reply:

We, on the other hand, have known this since 2019.  PHTI’s excuse, such as it is, is that it was formed in 2023.  We’ll let it go this time… 

The Likely Impact of the Findings

The report shows that digital health vendors (once again, with the exception of Virta, which emerged as the clear – and only – winner from this smackdown) are “not worth the cost.”  We would strongly recommend reading it, or at least the summary in STATNews. It is quite comprehensive and the conclusion is well-supported by the evidence. 

In the short run, the effect of this report should be Mercer renouncing its “strategic alliance” with Livongo (“revolutionizing the way we treat diabetes”) and returning the consulting fees it earned for recommending them to their paying clients. (Haha, good one, Al.) 

This was a rookie mistake by Mercer in the first place. Not forming the “alliance,” but rather announcing it. The whole point of benefits consultants making side deals with vendors is to do it on the QT so clients don’t notice. Hence, I’m not saying Mercer should actually renounce Livongo and harm their business model.  Just that they should pretend to.

In the long run, this report should signal the end of the digital diabetes industry, meaning Livongo, Omada, Vida and a couple I’ve never even heard of.  The bottom line: private-sector employers using digital solutions for diabetes may be violating ERISA’s requirement that health programs benefit employees by being “properly administered.”

The Empire Better Not Fight Back

Inevitably, the well-funded diabetes industry will fight back against PHTI’s report and “challenge the data.”  They’d be right in one respect: the data does need to be “challenged.”  However, it’s for the opposite reason: PHTI went far too easy on these perps. 

Here is what I would have added to the report, had they retained my services. (And I’d be less than honest if I didn’t admit I had hinted they should, but I think by then their budget was fully committed.)  These points will inevitably come to light in the event of a “challenge.”

First, PHTI did not adjust for the huge benefit of regression to the mean when you start with people with very high Hb A1c.  Livongo in particular has mastered the art of riding the regression train down.  Some significant number of people at 9%+ will decline regardless…and others who are lower will take their place.  The only way to truly measure results is a cross-section to see how many people in an entire organization have declined, including non-participants, dropouts etc. My son-in-law is a perfect example. He is Type 1 and generally well-controlled, but he pops up every now and then, gets spanked by his PCP, and then goes back down.  Livongo would happily take credit for that, were he in their program. 
 
Instead, PHTI gave credit to the vendors for improvements in people with very high Hb A1c’s.

Second, matched controls are invalid because you can’t match state of mind.  Ron Goetzel, the integrity-challenged leader of what Tom Emerick used to call the “Wellness Ignorati,” demonstrated that brilliantly, naturally by mistake.  Take a looksee at what happens when you match would-be participants to non-participants – but without giving the former a program to participate in.  The Incidental Economist piled on. And then the Wellness Ignorati tried to erase history, recognizing they had accidentally invalidated their entire business model. Diabetes is no different.  There’s a reason the FDA doesn’t count studies that compare participants to non-participants, it turns out. PHTI accepted them as a control. 
 
Here is the key graph. Note that dramatic savings of participants vs. matched controls were achieved in the two years (2004-2006) before the program was actually implemented:


Third, along with sample bias there is investigator bias. Livongo’s main study was done by — get ready — Livongo. Along with some friends-and-relations from Eli Lilly and their consultants. PHTI assumed investigators were on the level.  I’d direct them to Katherine Baicker’s two studies on the wellness industry. The first – whose “3.27-to-1 ROI” pretty much greenlit the wellness industry – was a meta-analysis of studies that were done – get ready – by the wellness industry.  It has been cited 1545 times.  The second, featuring Prof. Baicker’s own independently funded primary research, found exactly the opposite. It has been cited 16 times.
Don’t get us started on Livongo
 
The PHTI report didn’t look at real-world user commentary, which admittedly is tough to find because Livongo got their ratings and reviews deleted from Amazon. 
 
Nonetheless, I kept screenshots of the initial ratings, and this link to a review  entitled “These people know nothing about diabetes.”  Mercer, you say you want a revolution?  Well, you know, we all want to change the world – just not by using Livongo: 
 
Screenshot 2024-03-21 at 7.27.32 PM.png
 
Livongo’s results are also internally inconsistent. First, they claimed to reduce hospitalizations by 59%.
Then they did the whole Gilda Radner thing: Never Mind.  Turns out there is no savings in inpatient or ER, but rather a dramatic reduction in PCP visits: 
 
Sidebar observation: aren’t we supposed to be encouraging PCP visits amongs the non-well population?  Just askin’…
 
The other digital vendors are equally squirrelly too.  Omada’s new pitch is that (along with a startup fee) they will only charge for members who lose weight in any given month. But upon cross examination it turns out they are not crediting customer accounts during months where someone gains weight.  (Weight gainers are also more likely to drop out.)
Conclusion: The Streisand Effect
 
Obviously, Virta will want to circulate this PHTI report as widely as possible. If I were the rest of the diabetes industry, I’d shut up. There was a famous incident in which a consultant retained by the state of California to study erosion took aerial images of the coastline, including a shot of Barbra Streisand’s Malibu estate. The image got viewed 6 times. Then she sued him (very unsuccessfully, as it turned out)…and the shot was subsequently viewed a million times. 

Oops, make that a million and one. 

Drawing undue attention to unwanted publicity has henceforth been termed The Streisand Effect.  Right now this PHTI report is mostly of interest to the cognoscenti.  Most of its customers won’t notice. 

Why?  Because what we say about wellness is likely also true here: “There are two kinds of people in the world. People who think diabetes digital health works, and people who have a connection to the internet.”