By Kelley Hunsberger

minute read

Chronic disease is shortening life spans, destroying quality of life, bankrupting governments and threatening the health of future generations.

And the predominance of these problems shows no signs of slowing down.

“Health care professionals have been forced to work in a broken system for far too long.”

—Glen Tullman, CEO, Livongo

According to the World Health Organization (WHO), chronic conditions—including heart disease, diabetes, cancer, hypertension and chronic respiratory diseases—cause 70 percent of all deaths globally. And in the United States, the total cost of chronic disease is projected to reach $42 trillion by 2030, according to the Partnership to Fight Chronic Disease.

Unfortunately, today’s health care system is ill-equipped to address this challenge because the system is organized around an acute, episodic model of care where the payers and the providers come before people.

“Providers know how to do heart surgery really well. They know how to do hip replacements,” says health care entrepreneur Glen Tullman. “The health care system is a victim of our own success. It’s kept people living longer and longer, so all the chronic conditions that we have for a lifetime are becoming a bigger and more expensive part of our health care system.”

To improve lives, there must be a paradigmatic shift in how chronic conditions are treated, one that cannot rely on incremental innovation, Mr. Tullman says. Instead, it must be a full-fledged transformation that puts the person at the center, empowers them to take an active role in their day-to-day care and overhauls the experience so that the health care comes to an individual just in time—when its most needed and wanted.

It is a change that Mr. Tullman is determined to help drive as CEO of Livongo. The company, launched in 2014, has redesig

ned how people with chronic health conditions manage their health by driving behavioral change through technology, personalized recommendations and real-time support. Their goal is to serve the whole person by addressing each of their chronic conditions on a single platform. Livongo uses analytics and artificial intelligence techniques, such as reinforcement learning, to understand each member and offer real-time recommendations that are tailored to each person’s unique health experience.

But Livongo is more than a tech company. Artificial intelligence simply is the catalyst for disruption.

“I wanted to create a digital consumer health company that really hasn’t been done before,” Mr. Tullman says. “We have digital companies. We have consumer companies. We have health care organizations. But the three don’t really come together and never really have.”

 

The Genesis of Change

Revolutionizing the status quo approach to chronic diseases is a deeply personal mission for Mr. Tullman.
“When my son was 8 years old—he’s now 22—he was diagnosed with type 1 diabetes,” Mr. Tullman says. “[A few years] later, my mom was diagnosed with type 2. I was surrounded by this crazy thing called diabetes, and I had to learn all about it.”

What he discovered is that people with chronic health conditions want to be healthy and live their life, but the health care system often made it an arduous task. “Everywhere they turned, it was hard. They have to pay co-pays. They have to order little strips to check their blood sugar, and sometimes if they lost a vial of strips and they needed a replacement, the insurance company would say, ‘You already have your allotment. You can’t get more.’ And then, they have to write down all of their [blood glucose] checks and take them to the doctor. And if they lost their meter, they lost all their information, and on and on.”

And despite the hype and headlines, much of digital revolution has been largely superficial thus far, especially in health care, Mr. Tullman says. “Pieces of the business model have evolved, but at its core, many businesses remain the same,” he told Forbes. “Sure, they are accompanied by cool, easy-to-use interfaces, logistics and product improvements, but it’s a new interface on an antiquated approach.”

He argues that in health care, many systems have failed to innovate beyond electronic health records; approaches to managing chronic diseases have barely changed in 25 or 50 years.

“Technology’s goal is to make life simpler—to make it easier, to make it smarter and better,” he says. “None of that has been applied to addressing chronic conditions like diabetes and high blood pressure.”

At the same time, there is a sense that when you are a patient you do not play a role in your care—that you are going to have something done to you, Mr. Tullman says. “But, for chronic conditions, especially, people must play an active role in their day-to-day care.”

For Livongo’s diabetes program, the company provides individuals with an app-connected blood glucose monitor that send readings to Livongo’s cloud-based monitoring system. After immediately processing the data, the Livongo member immediately receives recommendations via the monitor.

For example, if a person checks his or her blood sugar level and finds that it falls outside the norm, an alert is immediately issued through the glucose monitor with action steps personalized for that individual. If the level strays too far, the person will also receive a call within seconds from a specialist—a certified diabetes educator, who acts as a coach—who will talk with them to understand what is happening in real-time and guide them through choices and the next steps to get back in healthy range. The information is stored in the cloud so it is never lost, giving Livongo members one less thing to keep track of for doctor’s visits. Informing this approach is Livongo’s team of doctors, researchers and data scientists, who identify meaningful signals in big and diverse data sets.

“It’s a whole new way of thinking about health care,” Mr. Tullman says.

The Center of It All

Tech prowess alone is not enough to change the system. To drive real change, a consumer-focused mindset must be front and center. But that is not the norm at many health care organizations, Mr. Tullman says.

The first thing Mr. Tullman and the rest of the Livongo team did when creating the company’s business model was to look for ways to redesign the experience of managing diabetes to make life easier for their members—and that does not mean always leading with tech. For example, the company provides consumers with unlimited test strips, which are shipped to homes at regular intervals free of charge.

“I saw how challenging it was, for example, for people that had to make decisions between meals and test strips. That should never happen,” says Mr. Tullman.

“We don’t want to be concerned about the test strips. We want to be concerned about keeping them out of the hospital and keeping them healthy. And so, charging them to check their blood sugar made no sense at all if your goal is making sure they know their number so they can stay healthier. If we’re truly in the health care business, then that’s what we should do.”

But Mr. Tullman and his team quickly noticed a problem with this initiative, stemming from the predominantly employer-based health care system in the United States. When Livongo members left their company, their health care plan was discontinued and free test strips stopped arriving in the mail. For many people, this created a major gap in the management of their disease. So Mr. Tullman decided that the company would continue to send test strips until the individual had a new job and his or her health care plan kicked in. It was a decision about what kind of company Livongo was ultimately going to be: people-centered.

Putting consumers first also means Mr. Tullman and his team must listen to them at all times, even when the feedback is negative and costly.

“You have to be willing to pivot,” he says. “It’s easy to say you really listen to your customer, but it’s not always easy to do.”

Such was the case shortly after Livongo’s launch. The company began shipping its blood sugar monitoring equipment to members. Almost immediately, it began receiving complaints about the lancet—the device that draws blood from the member’s finger.

Members did not like the one the Livongo team selected; it pricked too deeply and caused pain.

The organization did a full review of the lancet and compared it with other options in the marketplace. It found a replacement and shipped it to every member free of charge.

“You have to be willing to pivot. It’s easy to say you really listen to your customer, but it’s not always easy to do.”

—Glen Tullman

“Some of the members called us and said, ‘Hey, I’m not paying for this. I didn’t order it.’ They were so amazed that somebody would actually do the right thing and say, ‘It’s just an upgrade. It’s because we want you to have the best device out there.’”

A company culture that values ongoing learning is also important, especially when it comes to understanding consumers and health, Mr. Tullman noted. “We regularly study consumer behaviors to determine what actions make a real difference day-to-day to health,” he says. “For example, with checking blood glucose, we found frequency matters. Livongo doctors identified a clear and positive correlation between the frequency with which people with diabetes check their blood sugar level, success achieving health goal and cost savings.”

Barrier to Disruption

Disrupting any industry—especially a massive, multi-trillion-dollar sector with deeply entrenched interests—inevitably raises some hackles. Carriage makers didn’t like people who made automobiles, Mr. Tullman says. “But we’re doing something that’s making life better for a lot of people, and it’s worth that fight. But it is a fight.”

For Livongo, it requires working daily within a sector rife with misaligned incentives and outdated approaches—for example, payment models that favor volume over value. “Health care professionals have been forced to work in a broken system for far too long,” Mr. Tullman says. “We decided we simply couldn’t wait anymore to focus on doing the best thing for a person living with a lifelong health condition. And what we’ve found is our approach resonates across the health care ecosystem.”

Which may be why the company has a valuation north of $800 million, reaching near unicorn status. Investors include Microsoft Ventures, General Catalyst and Kleiner, Perkins, Caufield and Byers. It has more than 340 employers on its roster. Four of seven national health plans in the U.S. offer Livongo to members, and the company works with the nations’ top pharmacy benefit managers (PBMs).

But the upward momentum brings a new challenge: keeping the company’s mission to drive change in health care clear and tangible across its growing workforce.

“I wish I could tell you that we had that down perfectly,” Mr. Tullman says. “Small companies go through stages. You start off with five people or 10 people: Everybody’s in one room and it’s very easy to communicate. It’s very easy to know what the goals are. And then as you grow it becomes more and more difficult to communicate that vision, and to do it in a clear way. Fortunately, the leadership team and I have experience managing fast growth and building a company at scale.”

Ultimately, Mr. Tullman’s goal is to drive a change so deep that Livongo no longer needs to exist, at least in its current manifestation. “I believe that what we’re creating is not just about diabetes, or high blood pressure, or diabetes prevention,” he says. “It’s about, how do we keep people healthy? How do we keep them happy? Using data-driven insights to manage an array of chronic diseases in a manner highly personalized to each members’ unique needs—that’s a whole different business, and something that we’re going to be in for a long, long time.”

Three Metrics to Watch

To gauge the company’s impact, Livongo relies on three key metrics. “The first and most important is ‘Do our members love us?’ Not like us, but love us,” says Glen Tullman, CEO, Livongo. To measure where it stands, the company looks to its Net Promoter Score and client testimonials. “We have a Net Promoter Score that’s regularly north of 60, putting us on par with admired consumer and tech brands,” he says.

The second key metric is whether the company is making members healthier. Studies document Livongo is, indeed, doing so. A May 2018 study in The Journal of Diabetes Research found the broad use of Livongo for diabetes for people living with the condition reaffirmed earlier positive findings that its use by people with type 2 diabetes results in sustained improvement in glucose control by reducing HbA1c while also lowering the rates of hypoglycemia. The study also found Livongo empowers people with type 2 diabetes to lose weight and further improve blood glucose values.

The final metric is whether the company is lowering the cost of health care. “That’s an important metric because some of the big companies, while they really do care about their employees, are in a situation where they only have so much money to spend on health benefits,” Mr. Tullman says. “[These companies] have to justify from a cost standpoint what they’re spending.”

To get an accurate reading on this metric, Livongo looks at internal data and partners with outside sources to analyze the cost-benefit ratio. A June 2018 analysis found in just the first year of using Livongo, a large self-insured employer saved $70 per participant per month on health care costs for Livongo members, compared to people with diabetes not using Livongo during the same time period. The company achieved a positive return on investment in

Livongo of 1.4 times its spend. Diabetes-related medical spending members fell by 35 percent whereas non-member spending stayed the same. This finding supports data presented at the 77th Annual American Diabetes Association’s Scientific Sessions that found—over a longer period of time and a larger study group—Livongo saved members $83 per month on overall health care costs on average—a 5.8 percent decrease compared to non-Livongo members.