Financial Trends in Digital Health, Future of Virtual-First Care

Wei-Li Shao, president of Omada Health, provides insight on financial trends in digital health investment, and what the virtual-first care approach means for the future of health care.

Welcome back to PopHealth Perspectives. A conversation with the Population Health Learning Network, where we combine expert commentary and exclusive insight into key issues in population health management and more.

Today, we are joined by Wei-Li Shao, President of Omada Health. He provides insight on financial trends in digital health investment, Omada's platform and funding, and what the virtual first care approach means for the future of health care. Wei-Li?

Absolutely pleasure to be here, Sam. My name is Wei-Li Shao, I'm the President of Omada Health, and am humbled and privileged to be at Omada. I am blessed in that I get to work with our commercial side of our house. That's our sales and patient and member outreach teams. I also get to lead our corporate strategy and business development group. And then also most importantly, our care delivery group, which represents all of our health care professionals that are frontline, that I like to say, deliver the promise on what it is that Omada does every day in day out. So, I've been here for about 3 years and from there I was in a lot of different places in the biopharmaceutical industry, but I have been in health care, hard for me to say, but more than a quarter-century now, Sam, believe it or not.

Can you tell me about Omada Health's recent announcement regarding funding, what it means for the platform and how it will be used to improve health outcomes for members?

Absolutely. So, we are incredibly privileged to be affiliated with an incredible syndicate of investors. Our most recent round was $192 million led by Fidelity, household financial brand name, as well as aMoon and Civilization Ventures. And I think that when we look at this latest round of funding, it really continues what I would say is the confirmed bet that our cofounders Sean and Adrian made over 10 years ago, Sam, where they made a bet that virtual first care was something that not only could be done, but the science of behavior change could actually be done at scale with humans, leveraging technology in a high-quality way. No matter if you, for instance, live in Hot Springs, Arkansas, or Dallas, Texas, from where I'm from or in the Bay area where I now work. And so, it's been hugely inspiring, and that's played off across 19 published clinical trials, and hundreds of thousands over a half a million numbers strong in billions of data points.

And so, this latest round of funding was about three things, Sam. The first one was about supercharging the continuation of our scale at an even greater accelerated growth. We are now over 1,700 clients, as I mentioned over half a million members strong. And so, continue that scale because the demand coming out of the pandemic as well as built upon our foundation has been extraordinary.

The second area is related to that, but there's not a corner of our business where we're actually not hiring in new and incredible talent to supplement our talent base. Like I said, we've almost more than doubled our employee footprint just over the last 12 to 16 months to meet that demand. And we're pleased to welcome some new executives and Board members. We've welcomed Nancy Vitale, is our Chief People Officer, and Sunil, as well, as our Chief Technology Officer. So, we're starting to supplement even more incredible talent on the base.

The third area which I think is, I think, maybe relevant to listeners is the most exciting is what I call the work that we've been doing in the Omada Insights Lab, which I can talk about a little bit more. But in a nutshell, the Omada Insights Lab is really this interdisciplinary team that spans across clinicians, data science, clinical engineering, that allows us to take the billions of data points from over half a million of our members and distill that into care insights and personalized care plans for a single individual. And that's super exciting. And we believe that supercharging that model is really going to help us deliver better outcomes and lower cost of care, which is of course, why we're here.

Thank you. Can you discuss the latest financial trends in digital health investment?

So the latest financial trends in digital health in virtual care have been, I don't know what the right adjective is, but anything but extraordinary. And last year, according to Rock Health, I believe they were reporting about 29 billion dollars of investment and funding came into digital health. That was more, I believe, than double the amount in 2020, across over 700 different actual deals. And that's a good thing, I think for virtual care and for patients. But I also think it doesn't come without its liabilities.

By the numbers, there are more than 250 telehealth providers, probably more than we need. There are more than 390,000 digital health applications. Again, more than I think we really need. And I think that overall it's good, but with that kind of investment comes, I think, some liabilities and some expenses, one of which is massive proliferation and expansion that I think is going to create complexity and confusion, not only for buyers, and customers, and stakeholders in health care, but also most importantly for patients. It's got to be dizzying to try to parse out exactly what I should be using if I'm a patient for which condition or disease that I have.

And I think what we really need to watch out for, Sam, is that we've got to watch out that we don't shift our focus from patient care to market share. And I think that's something that in rapidly growing industries and markets tends to happen. And I think that we, as reminders as leaders in virtual care, all need to remember to put the patient center first, which means incredible care, engaging care, and proven care that is affordable and accessible at a scaled level.

So that's where I see what's happened. I think the biggest question is, okay, well, where does it go from here? And maybe I'll say a couple of things, and we can talk a little bit more about it if it helps is we've seen a massive migration, I think, in virtual care over the last just 3 years. Before the pandemic, if you can imagine 3 circles separate, one of which was telehealth, one of which was in-person traditional care, and the other one was digital or virtual chronic care management, none of these 3 circles touched each other. And in fact, we were all separate. And then, the pandemic because of the inability to see in-person care providers, not surprisingly in-person care and telehealth started coming together almost in an overlapping Venn diagram, but chronic care condition management virtually was still sitting out by itself.

And last year we've now just begun to see telehealth and chronic condition virtual care start to come together because we acknowledge that the vast amount of white space in between visits, whether they're virtual or in person, is really where the battle is fought, won, or lost against chronic conditions. And so, where I think things can be going over the next 24 to 36 months is really to see all 3 of these circles come together because patients at the end of the day, are not going to want one or the other a hundred percent they're going to want what makes sense for them. And it's most likely, I put the bet on a combination of those three.

Thank you. And you touched on this a little bit just now, but is there anything else you'd want to add on what you think this virtual first care approach means for the future of health care?

So, this virtual first care approach and what it means for the future of health care goes back to that vast amount of white space that I think is the battlefield against chronic conditions and that vast amount of expansive wide spaces, the time between visits, whether they be in person or virtual, whereby people are entirely left by themselves for the most part, taking actions, making decisions that will dictate both their near term and long term health and happiness. They're not seeing a doctor at that point in time. And so I think virtual care, and what Omada does specifically in that particular area, is so critically important. I think the future for Omada, as it relates to virtual care in that vast amount of white space between visits really centers around a particular approach that we take that involves essentially 4 things. And I think this is the future of health care.

The first one is, of course, a human care team. Multidisciplinary because people, unfortunately, in the United States have more than one condition. They have diabetes, hypertension, joint, and pain issues, behavioral health issues, overweight, and obesity is on the rise. So they need a care team that's multidisciplinary from which trust is the currency that everything else happens. And with that, we pair, of course, the digital health application, as well as connected devices. And we convert all of that into a data footprint, which we merge with billions of data points from over half a million numbers to create customized care plans that are then delivered by our care team.

And when that cycle goes around and around and around, we get two magical things. The first one is belief that I can do something today that I couldn't do yesterday, and then second, behavior change. And we know when those things occur, health outcomes are made possible. And then that of course lowers the cost of care. And so, this virtual care approach I think is going to transcend visits. It's going to transcend the concept of time, such that we don't think about health care as points in time. We think about as something that is manageable and something that is simple enough to do on a daily basis. And that's really, I think, the power of virtual first care today.

Thank you so much for those insights. Now, I would just like to open it up to you, if there's anything else you'd like to add to the conversation today that we didn't touch upon.

Yeah. Thanks, Sam. There's so much to share because there's so much going on in the virtual care digital health space right now. But I think maybe the one thing that I think excites me the most is what I believe now is the opportunity to blend scaled care for the NV1 patient. And what I mean is that what we've never been able to do before is harness all of the people with diabetes experiences to benefit one person. It's always very much been of a, this has been my experience as a health care professional. I read studies, I look at guidelines and I do what's best for the patient for what I can see that is happening right there in that moment within the 15 minutes that I see them. And we're at a point now where we can actually gain visibility into a person's life in a non-intrusive way, in a way that they find simple and understandable and acceptable, and take all of that and create personalized customer care plans.

And we do that through our Omada Insights Lab, and we've seen extraordinary insights and results. What we've found a year or so is that members that engage their care team or their health coaches just in the first week of joining the program are 94% more likely to achieve their desired health outcomes. And their desired health outcomes are not the ones necessarily that your doctor wants. Of course, that's important. But it's your own personal health goals. Whether they be, for instance, I've got a daughter who's graduating this year from high school, whether I want to lose 10 pounds by the time she graduates. So, if I have a goal like that, the majority of members overwhelmingly are able to achieve those goals if they engage their care team. And we make that easy. One of my other favorite statistics is that members who actually interact with their coach, or their specialist, or anybody on their care team are two times more likely to lose more weight.

And we know weight is a corollary for cardiometabolic fitness and health and so, it's super important. And the last one, I guess, maybe I'll talk about is from our Omada Diabetes Program. Through that Omada care approach that leverages all the data to create personalized care plans delivered by a human care team. We're able to actually replicate results that are on the effect size of actually medications, but without them. An average of .8 or over almost 1.5 percentage point reduction in hemoglobin A1C, which is the biometric outcome, that is the gold standard to determine whether you're getting better with your diabetes. And along with that decreases in total cholesterol. And an over 10% increase in medication adherence. And so we've been able to demonstrate success at scale across now, 19 published clinical trials, peer-reviewed that show that the bet on the science of behavior change and mindset change actually can be done on a daily basis, such that it adds up to creating an incredible effect size outcome.

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