The resurrection of wearables

The only difference between "wearables" and "remote patient monitoring" is who's paying

This is a shorter newsletter because today my organization hosted an event on the insulin crisis with Congresswoman Katie Porter. I moderated a panel with some exciting and incredibly smart insulin advocates and pharmaceutical policy thinkers—you’ll be able to watch the recording here!

In 2016, I took a class with health care iconoclast Dr. Zeke Emanuel. The parts of the class that stuck in my brain (besides Dr. Emanuel cold-calling on unsuspecting students, asking them American history trivia) were the parts where he directly attacked then-conventional wisdom.

Most notably, I remember Dr. Emanuel’s hatred of health care wearables. He didn’t just express this hatred to my class, he also spoke about it publicly.

From a keynote speech Dr. Emanuel gave in Boston in 2015:

I think you can forget about wearables for the masses. Investing in them is not going to pay off…You’re not going to get anything out of them from a health care perspective.

I was thinking about this again this week, because suddenly I kept hearing about remote patient monitoring. What is this, I kept thinking, except a new class of wearables?

As it happens: remote patient monitoring isn’t that far off of the original wearables concept, but changes in reimbursement and application have changed who’s paying for them and have made remote patient monitoring far more valuable than it was even a few years ago.

Why is this changing?

Reimbursement

At the end of 2018, CMS caused a sea change in remote patient monitoring by providing three new CPT codes, allowing providers to seek reimbursement for remote patient monitoring of chronic conditions. And where CMS goes, other insurers usually follow.

The next year, CMS expanded the definition of the length and kind of monitoring that was reimbursable. Then, at the end of 2020, CMS issued clarification that the new remote patient monitoring CPT codes can be applied to monitoring both chronic and acute conditions.

🚨 Two important notes that will alter how the market matures:

  • CMS has said that providers can only bill using remote patient monitoring codes if they have an established relationship with a patient; it’s unclear if that relationship can be established over a telehealth visit.

  • CMS has also noted that, regardless of the number of devices being used to monitor a patient, only one provider can bill during a 30-day period per patient using remote patient monitoring CPT codes.

    This will limit the incentive for a single company to provide multiple devices. It also creates a zero-sum game for those providing remote patient monitoring services; if another company enrolls a patient first, your services can’t coexist.

Hospital incentives

At the same time, changes in risk-adoption for hospitals have motivated some hospitals to adopt different forms of remote patient monitoring technology. The 2010 Affordable Care Act instituted the Hospital Readmissions Reduction Program (HRRP), which now applies to most acute care hospitals in the U.S.

Under the program, hospitals with more than the national average of patient readmissions within 30 days (after adjustments for patient characteristics) are penalized with a reduction in Medicare payments.

This incentivizes hospitals to pay closer attention to patients following discharge; as a result, some have adopted remote patient monitoring to provide patients with an additional layer of at-home monitoring.

(Of course, if the incentive is to keep patients from being readmitted for 30 days, the remote patient monitoring engagement likely isn’t going to last long and may not have lasting benefits for the patient—but that’s a different story about the hospital incentive structure we have.)

COVID-19

While the 2018-2019 CMS guidelines gently gestured towards widespread remote patient monitoring adoption, the 2020-2021 pandemic undoubtedly accelerated the process. In-hospital care became too frightening or dangerous for many patients, who in turn created big demand for care at home.

Companies incorporating remote patient monitoring

This is a messy-looking chart, I know. There’s a lot more to say on these companies, especially as the space continues to grow rapidly. After all, insurers just started covering remote patient monitoring, and the policies around coverage are likely to remain in flux.

But for now, I see remote patient monitoring companies segmenting into four sectors, depending on their level of care integration and the specificity of care that they provide.

For example, in the lower left quadrant, you see companies that provide a single device with a single use case; for example, Bodyport, which sells a smart scale intended to notify physicians if their heart disease patients experience changes in biomarkers.

At the opposite end, in the upper right quadrant, are companies that come closest to providing a full stack integrated telehealth experience for any condition.

Interestingly, there are a few companies, like Vivify Health, Optimize.health, HealthSnap, and Current Health that provide turnkey software and device delivery to monitor patients for nearly all conditions and alert their providers of any changes in health status. But because these don’t represent full integration into existing health systems (and I suspect their actual use is spotty, due to the annoying workflow challenges of how hospital discharges work), I think a company that can manage the full integration will see a lot of interest.

Chasing consumers vs. payers and providers

The dividing line between wearables and remote patient monitors seems to be less technological and more about who is paying for the device.

In Dr. Emanuel’s 2015 speech, he outlined seven hurdles between technology and better patient outcomes, most of which centered around patient engagement and adoption, and the integration of data into existing EHRs.

But in the last few years, the rest of the space has moved around these problems. Rather than getting hung up on convincing patients and doctors that Apple Watch data is valuable and should be more easily transferrable, the most innovative companies in the remote patient monitoring space have instead launched with payer and provider partners, allowing their devices to be “prescribed” to a patient rather than marketed to and adopted by a consumer.

And, as a result of a change in who’s paying—as well as, I suspect, improvements in technology more broadly—the data from the newest iterations of this tech is much better integrated than the data from the original cast of wearables.

Rather than calling these devices wearables, we’ve started referring to the whole bit as remote patient monitoring.

The consumerism piece is likely to rear up again, particularly as the current reimbursement guidelines (as mentioned above) make patient adoption a zero-sum game. As Joe Connolly pointed out in a post in January, this is manifesting right now as competition for consumers between digital health-first, single condition providers (the bottom right quadrant of my chart above):

Conclusion

And here we make a final loop back to Dr. Emanuel. He wasn’t wrong that wearables (at least as they existed in 2015—think Apple Watch heart rate data and not much else) had a low ceiling. I’ve literally never encountered a provider who was eager for my Apple Watch data, and I can’t imagine a doctor even knowing how to integrate or use that data if they were interested.

But Dr. Emanuel was wrong that people shouldn’t be investing in wearables/remote patient monitoring. The newest iterations of remote patient monitoring devices (and the companies selling them) offer an innovative approach towards health care unbundled from the hospital.