Sramana Mitra: Let me paraphrase my question and see if you can answer them from a trend point of view. On the value-based care side, whether it’s hospitals or physicians, what trends are you seeing in terms of adoption? How aggressive is the adoption of technologies such as yours?
Raj Agarwal: Frankly, it’s the slowest sector of the three. The decision-making takes anywhere from a year to a year and a half, even longer in some cases. The adoption is increasing, especially in tele-health. The next phase is the remote monitoring and condition management. The biggest receptivity is from organizations that are part of the value-based care or in a shared-risk arrangement.
Sramana Mitra: You just said that that is the slowest adopting sector.
Raj Agarwal: These three sectors are different.
Sramana Mitra: I understand there are three different sectors and different use cases. I’m asking you about the value-based care trend. I’m going to ask you next about digital app enhanced drugs from the pharma perspective. What are the trends? What are the adoption dynamics there in that segment.
From an insurance company point of view, it’s still value-based care. Value-based care use case applies to both insurance companies as well as hospitals and physicians. That’s one trend. The other trend is digitally-enhanced drugs, which I’ve encountered in other situations, but I’m asking you for the broad commentary on each of these trends.
Raj Agarwal: You asked me specifically if value-based care is the biggest trend. We see more value-based care on the provider segment. I don’t think payer drives value-based care.
Sramana Mitra: Your experience is provider drives value-based care. Within your various use cases, value-based care is the weakest use case in your particular situation.
Raj Agarwal: No, I think we are mixing two things. Value-based care is important and that’s where the trend is. You asked me where I see adoption. Adoption is slow on the provider segment. That’s going to increase over time. 2019 and 2020 will be a big year for adoption on the provider side. I’m not saying that value-based care is not driving things. It is. How long it takes for a hospital to sign a deal? It takes forever. They believe in value-based care.
Sramana Mitra: For you, those are not high-velocity use cases yet.
Raj Agarwal: Not on the provider segment.
Sramana Mitra: Not on the provider segment and not on the value-based care segment either as a result because you also said that the payers don’t drive value-based care. The only people in your segments who could be driving value-based care are the providers, and your provider adoption is slow.
Raj Agarwal: Let me ask you what you understand by value-based care.
Sramana Mitra: There is a long-term investment in the patient’s well-being through preventive care and proper interventions. A common behavior in health systems is that people don’t show up for checkups and they don’t do tests. Value-based care typically emphasizes regular checkups and early treatment as opposed to letting things fester.
Raj Agarwal: Maybe I have a different understanding of value-based care. It’s defined more as how you approach a patient’s condition. If you can do for less, you can make more money assuming you’re still improving the outcomes. If you do for more, then you are at risk of making less money. You bring value to the payer which is paying you. Their remuneration is based on the cost of the claims versus their targets.
The drivers for that are typically providers. They’re the ones who can influence that. There’s value for providers to make more money if they’re part of value-based care. If you have a regular visit, you may detect something early, but if there’s an existing condition, then you need to monitor them. That’s what we do through our platform.
That’s why organizations on the provider side that have a value-based play would participate with us. That’s clearly the biggest trend on the provider side. Payers are going for that because that’s one way to control their cost. They’ll say, “We’re going to give you x amount of money for certain conditions.” If you do that, then you get part of the savings.