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Digital therapeutics startup Virta Health's five-year study evaluating its type 2 diabetes treatment hit the two-year mark - and while the results don't quite stack up to last year's promising outcomes, we don't think this slip is likely to dampen the company's allure to payers.
Virta, which we pinned last year as a startup to watch, touts a digitally delivered, drug- and surgery-free type 2 diabetes treatment that aims to reverse diabetes progression by focusing on dietary intake. And the company courts payer and employer partners through value-based contracts, only collecting payments if members using the platform see measurable improvements to their health.
Here's what it means: Virta's second year of study findings affirms that its platform can improve diabetes outcomes - but there are a few caveats.
- Slightly fewer patients successfully reversed the condition this time around. Fifty-five percent of patients involved in the study reversed their condition using Virta's treatment, down from the 60% who did so the year prior. But the dip likely won't have payers turning their sights elsewhere: Over 90% of patients who began the study on insulin cut down or nixed it altogether. That could hook in insurers, considering insulin costs are on the rise, per Reuters. It's important to note that there are some limitations to the study: There were fewer than 350 participants, and they could self-select whether they wanted Virta's care or usual care.
- And patients enrolled in the study are continuing to jump ship. At the two-year mark, 26% of patients dropped out of the study, compared with the 17% who called it quits by the end of year one. While the patient dropout rate might be slowing, the fact that Virta's lost over a quarter of its participant three years before the study's close could raise questions about the longevity of its platform.
The bigger picture: Lingering uncertainty around Virta's efficacy highlights why payers should enlist digital health startups in value-based contracts.
Entering value-based arrangements with startups can help payers tap into the benefits of emerging tech, while skirting some of the financial risk inherent in new product investments.Payers won't want to skip out on tech that could trim costs, and digital therapeutics companies like Virta, Propeller Health, and Pear Therapeutics are among the startupsthat have demonstrated the most potential to help payers improve customers' chronic diseases, which account for the lion's share of US health spending.
And while Virta's second-year results are still impressive relative to the control group, they also underscore that much is unknown about the long-term efficacy and value of these novel digital health treatments. To ensure they're not betting on tech that'll leave their wallets empty and members still sick, it's likely we'll see an uptick in payers signing on with companies under value-based contracts.
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