Value of DTx  /  Payors

Clinical and Financial Value

The Covid-19 pandemic has exposed the challenges payors face in delivering accessible high-quality care outside of traditional office-based visits. Payors are now considering additional options for how to best meet patient needs and close gaps in care with non-traditional approaches.

By combining technology and evidenced-based medicine, DTx products offer patients access to therapies that address a wide range of conditions, enabling payors to:

  • Reduce the overall cost of care
  • Enhance, support, and optimize current medical treatments
  • Optimize patient engagement
  • Improve provider network efficiency
  • Support value- and outcomes-based care initiatives
  • Expand care delivery outside of traditional clinic settings
  • Improve member experience and satisfaction

Insights and information collected by digital technologies are easily integrated within care management workflows to provide payors with valuable insights that support population health management and value-based care initiatives.

"From the payor perspective, if it's not going to improve outcomes, there's not much value to us because there's not much value for our members."

Dr. Kenneth Snow, United States

Frequent Questions

Digital therapeutics undergo robust clinical trials and are held to similar standards of safety and clinical evidence as traditional medical treatments. These include the proper trial design, utilization of standardized endpoints, alignment with Good Clinical Practices, appropriate reporting of outcomes, publication of results in peer-reviewed journals, and the generation and application of real-world evidence. This rigorous process enables DTx products to:

  • Demonstrate safety and efficacy across target populations
  • Establish credibility
  • Deliver clinically meaningful results
  • Be considered as or among current standards-of-care

DTx products are designed to track and measure adherence and clinical outcomes. Study types conducted by DTx products include Randomized Control Trials (RCT), Real-World Evidence (RWE) trials, and Health Economic and Outcomes Research (HEOR).

Data including how many patients are accessing the technology, how often a products is used, and clinical outcomes are delivered to the treating clinician and the payor in alignment with privacy and security requirements. Well-established industry standards for a particular disease or disorder are used to define all relevant metrics for measuring and assessing meaningful clinical improvements.

Digital therapeutics are regulated as medical devices. Regulatory oversight based on product risk levels include:

  • Compliance with national regulatory agencies, notified bodies, and manufacturing requirements
  • Registration with the applicable product regulatory agency or notified body
  • Affirmation that product claims are factual and supported by clinical validation, regulatory status, and marketing authorization
  • Adherence to appropriate labeling and advertising regulations

Compared to products that track fitness, encourage medication adherence, or monitor patient activity, DTx products deliver medical interventions directly to patients. As such, digital therapeutics undergo rigorous testing and are held to the same standards of evidence and regulatory requirements as traditional medical treatments.

Wellness and fitness apps that consumers download to their smartphones are not typically regulated, nor do they need to prove product claims by scientific testing or clinical evidence.

Patient access to DTx products may be granted through:

  • Prescription from a qualified healthcare provider
  • Authorization or referral by a clinician or payor
  • Eligibility determination via a validated screening tool or clinical guideline
  • Delivery of an activation code via a payor or employer

Digital therapeutics complement traditional medicine in the treatment, management, and prevention of a wide range of chronic and mental health conditions. They provide patients with access to clinically proven treatment options outside of traditional office settings, thereby expanding access to needed medical care. By directly delivering medical interventions to patients, tracking progress and reporting outcomes, and increasing clinician capacity through the use of remote technologies, DTx products create substantial value in improving population health.

Additionally, real-world outcomes generated by digital therapeutics may be used to optimize outcomes at the individual patient and population levels. At the individual patient level, DTx products provide clinicians with meaningful, actionable clinical reports. At the population level, data generated by DTx products may be aggregated to track progress or compare aggregate outcomes based upon patient disease state, level of acuity, geographic location, age, gender, etc.

Europe

National coverage frameworks for digital health that include DTx products are currently being implemented in Germany and Belgium, while France and the United Kingdom have been financing DTx products regionally for more than four years.

In Germany, DTx products are considered to be a subset of digital health applications (DiGA – in German: “Digitale Gesundheitsanwendungen”). The 2019 Digital Healthcare Act (Digitale-Versorgung-Gesetz, DVG) marked the introduction of a national financing framework for digital products based on “apps on prescription” for patients. This means that approximately 73 million citizens covered by German statutory health insurance are entitled to use a DiGA prescribed by a physician or psychotherapist and are reimbursed by their health insurance. More details are provided through BfArM.

United States

In the United States, DTx products most frequently receive third-party payment through employers, Pharmacy Benefit Managers (PBM), insurers, or other third-party payors. DTx products may be covered under the medical benefit, the pharmacy benefit, or through other forms of contracting.

Insurers are increasingly covering the cost of DTx products by assigning ICD-10 codes based on the setting of care in which the product is dispensed. In some cases, facilities may receive a bundled payment as part of a diagnosis-related group (DRG), while licensed providers prescribing or authorizing DTx products may be reimbursed for their time under professional fees such as CPT codes.

Public programs in the United States, such as Medicare and Medicaid, are still working to determine how to formally recognize and provide patients with access to DTx products.

"We love the fact that it was easy for our employees to start the program using only their phones. Kaia has been amazing to work with and helped us make the program work for our population."

Director of Benefits
Kaia Health employer client

"Freespira has successfully demonstrated it provides sustainable, positive outcomes for our members while driving down costs associated with over-utilization of medical services, making it a 'win-win' for members, providers, and insurers."

Charles DeShazer, M.D.
Highmark Health Plan

"From the payor perspective, if it's not going to improve outcomes, there's not much value to us because there's not much value for our members."

Dr. Kenneth Snow
CVS Health US

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