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Glen Tullman, Livongo, Live with Jess & Matthew

Fresh off of a press junket that included talking to Jim Cramer on CNBC & hanging with Maria Bartiromo on Fox Business News, Livongo Health’s Glen Tullman stopped by THCB to talk about the impact of #covid19 (& more) on health tech. Jessica DaMassa and Matthew Holt tag-team interviewed him on Weds 8th April. (Full transcript is below the video)

Here is the transcript:

Matthew:

Hi, this is Matthew Holt from The Health Care Blog.

Jessica:

I’m Jessica DaMassa with WTF Health, and it is our pleasure to welcome our special guest here with us. We have Glen Tullman, the founder and executive chairman of Livongo. Glen, how’s it going? How’s your self-quarantine situation?

Glen:

It’s going great. I’m broadcasting from my in-home studio, which is really just my office in Chicago, and I’m a physical distancing from lots of people.

Jessica:

Including us, right?

Glen:

Including you.

Matthew:

Including us.

Jessica:

Including us. Including us. All right, so we wanted to just jump in and start just chatting with you about what you’ve been seeing on the front line here as you guys have been obviously announcing lots of good news for Livongo. Tell us, I guess, about the recent news about the increase in the projections for this quarter, and what’s been going on in terms of COVID-19.

Glen:

Well great. Well, first of all, it’s always great to be with both of you, and I want to start off by acknowledging and saying that our thoughts go out to all the people who have lost friends and family members to COVID-19, and also to our frontline responders, the doctors, the nurses, and all the people who are putting their life on the line. We’ve never had a crisis like this, and so we at Livongo we have a lot of thanks to those folks. I want to start with that because that’s really the most important thing. This is an amazing challenge for all of us, but we’re going to get through it together, and when we get to the other side, I think there’s a lot of goodness that can come from this, but we got to get to the other side, and we’re still in the midst of flattening the curve. And so we hope that everyone is helping us get through the next few weeks, hopefully that’s all it will take to flatten the curve. We’ve got some encouraging news out of New York and other places, not on deaths, which will continue to go up, but on new admissions. So we feel good about that.

Glen:

So having said that, yes we did announce an increase in our guidance for the first quarter of revenues for the company. Now what we’ve seen at Livongo is we’ve seen a significant increase in demand, about 10% pop in utilization of our services, and if you think about what we do, what we do is great preparation for something like this, a health crisis, because we’re empowering people to stay healthy, to stay at home, and to stay out of harm’s way, and if you think about the populations that we work with, people with diabetes, people with hypertension, people with weight management issues, or behavioral health issues, those populations are the most vulnerable. While they are not more likely to get coronavirus, if they do get it, it’s much more serious.

Glen:

If you look at the data, the Center for Disease Control recently came out and said that 78% of the ICU admissions were people with a pre-existing or chronic condition, and unfortunately, 90% of all the deaths in New York, just over 90%, were people with chronic conditions. It’s bad for anyone, but if you have a chronic condition or a pre-existing condition, particularly bad. So what do we want to do, we want to keep those people at home, away from the risks, away from doctor’s offices, clinics, ERs, and hospitals, and that’s what we do at Livongo. We’re empowering people at home. We’re using remote monitoring technology, we’re using telehealth, we’re available 24 by seven. We’ve been doing it for a while. Great news, one of the positives, is that this is helping to wake people up to the power of consumer digital health. That’s kind of where we are and how it all fits together. Long answer. Sorry about that.

Matthew:

So Glen, let me dive in on a couple of specific things, right? Well, first of all, I got to note that you’ve been on two other shows in the last few days and both times your stock went up 10%. I’m not seeing the bump from our show, I don’t understand why.

Glen:

It hasn’t started, but once-

Jessica:

Just wait. Just wait.

Glen:

Yeah, just wait once-

Matthew:

Just wait, yes, hey, we just started right? We’ll see. Actually it wasn’t till after you went on those shows that we’ll see him. I bet I’ll go and buy now. But you did announce something specific, which I wanted to just get you to clarify. With Kaiser Permanente, who’d not been a client, working with your myStrength behavioral health app, is that just access to the app for their members or does that involved coaching and other services as well?

Glen:

Well, right now, first of all, Kaiser had excellent timing. It’s a great partnership that we have with them. They’re making our myStrength, which is Livongo for behavioral health and making that application, a digital application, available to eight million of their members. It’ll take a while to roll out. Just at the time that people need it. And it’s interesting if, you know, when we’re connected with people, all of our applications are connected. And one of the things we always ask after we’re working with someone is how do you feel today? And what we’ve seen a number of people who touch the I feel stressed button has doubled since the coronavirus happened. So what we’re seeing is there’s going to be more and more focus on behavioral health. In fact, I was just doing an interview, and they asked me, and they said, “Well, what’s the real impact of coronavirus?”

Glen:

So I said, there’s really three. The first impact is the people who have it and who have lost their lives to it. And the second impact is the economic impact that we’re hearing so much about that will be long lasting and dramatic, but the most important impact is going to be the mental health impact. And there are a whole lot of folks out there who have had their care disrupted. There’s a whole lot of folks facing stress and anxiety about jobs, about their health, about other concerns about the future. Even the hope index is down.

Glen:

So what we want to do, working with organizations like Kaiser, is to make these tools available. In fact, we’ve gone a step further, we’ve actually said to all of our members, and to all their clients, our client customers as well, we’ve said to them that they can use a special COVID-19 module that we’ve created, which has information on coronavirus, which has stress management, which has anxiety, even has issues about parenting at home modules on that. We’ve made that available at no cost for 90 days to get people over the hump. Even if you don’t currently buy from us, it’s available to you, and now we’re going to be making that available nationwide just simply to say it’s our part in helping the country get through this, get over the hump, and get to what’s next.

Glen:

So what we’re doing with them, we don’t have, they’re getting the basic digital component, that will get most people a good start. And from there, then we’ll figure out what the appropriate paths are to the next stage, but that doesn’t include what they’re offering today. Doesn’t include talking to our coaches today, because they have coaches, they have a lot of other assets, we have coaches too, but right now, they wanted to do something that was broad, and immediate, and that’s what this arrangement was.

Matthew:

So that makes a lot of sense. And I think we wanted to get into a little bit of the question of where does digital health go, and where does Livongo go as part of that. So I’ll start off, and then Jess can ask you the tough question right? You primarily sold to employers, obviously through some other vehicles, but there is also now a bunch of reimbursement codes for Medicare and others, and now you have Kaiser, you have the federal employees, you have some other business going as well. And there is a lot of discussion about remote monitoring codes. Who’s paying for what in that? So give me a sense about what your currently able to charge for, in the services you are delivering, and then what you think you will be able to charge for to whom soon?

Glen:

Sure. Well first, just in terms of little bit of history, where we are today. So course we started in diabetes, then realizing that 70% of the people with type-II diabetes, also have hypertension, and we went there. Lots of those folks who have type-II diabetes have weight management issues. So we went to weight management, diabetes prevention, and then finally behavioral health. So that’s the suite of products all on one tech stack, all one experience. And then, who do we sell it to? We started, as you mentioned, with large self insured employers. We have about 30% of the Fortune 500 now. And so a dramatic number, and we talked about 620 new starts in the first quarter, that’s compared to about 230 a year ago, first quarter.

Jessica:

Wow.

Glen:

So 620, big number, of new companies starting just in the first quarter. It exceeded even our expectations.

Glen:

So, but it’s a lot more than large self insured employers today, because we started to roll out dramatically. We have the two largest PBMs, Express Scripts and CVS. We have many, 17 of the top 21 largest payers now, who are rolling this out and using it, and then most recently, and you probably remember, but with the Federal Employees Health Program, which is administered by Blue Cross Blue Shield Association, they offered that to more than five million of their members as a covered benefit. So I think you’re going to continue to see progress in the government sector, in the labor sector, in many of these other sectors. And you may recall, that Zane Burke, our CEO, when he was competing with me at his prior company, he signed an $18 billion deal with the VA. So there’s a lot of business out there in addition to the great relationships we have with our clients.

Glen:

Now, relative to the codes in particular, we’ve been working very closely with both sides of the aisle, and with the administration, to do two things. One, to reduce the regulatory barriers and they’ve been able to do that. So for example, just recently in the last two weeks, we were given the authorization to actually provide our services to Medicare beneficiaries. And what they did was they took down some of the regulatory barriers. In the past, those beneficiaries would have to see a physician and have her, or have him, actually authorize them, but that doesn’t make sense today. We want to keep them away from physician’s offices and physicians are overly stressed today. So they’ve relaxed that, and they’ve relaxed some of the other requirements to make it easier for us to offer this benefit. For example, copays, they’ve waived copays right now under the health emergency. The question is whether that will continue. We hope so, just as they’ve made it easier to use telehealth. Both of those are very important.

Glen:

So second, they’ve given us a pathway with accelerated approval to again use some of these billing codes and things like remote patient management, the RPM codes in there. And so we’ll start to use some of those to help people do what you’re going to hear more and more about, and that is, we need a national system that allows us to do, actually, population surveillance. Now surveillance is not a scary thing. It’s simply says we can actually keep an eye on the health state of our most vulnerable populations.

Jessica:

Like you right now.

Jessica:

So I want to go back, Glenn, and ask, you rattled off some of the things that you guys have done in terms of serving the population that you serve in terms of adding on hypertension after diabetes, and then moving on into behavioral health, and things like that. So what do you got your eye on adding next? I mean, are there any things that you’re planning on adding to the product here in the short term? Any kind of acquisitions you’re looking to make here to round out the full on Livongo experience being as it’s growing so rapidly.

Glen:

Well, I think that we’re very focused on what we do today. These are enormous markets. There’s 32 million people who have diabetes, and we have less than a million people today who have diabetes. Similarly, when you look at hypertension, that’s an even larger market, and finally behavioral health, and the other markets. So we see dramatic growth opportunities there, but it’s really the opportunity to help those people. And what’s most important is we want to grow carefully in a quality way, because these are our people. My son uses this. We have to make sure we’re creating the right kind of experience that’s really a benefit to every one of our members, and that’s our first priority. This is also our suite of products, if you will, what we call our whole person experience, really does hang well together, because people are generally what’s called comorbid. They have typically more than one of these conditions at one time. They don’t want to deal with two or three different coaches, two or three different apps. They want one app, and they want one experience, and so that’s been successful for us.

Glen:

So we’ll continue to look, we’ll continue to evaluate, but for right now we’re extremely focused on getting the experience that we create, which we know helps our members. It does three things that are kind of magical in healthcare. One, they don’t like it, they love it. So our net promoter scores are in the 60s. Two, it actually improves their health. And so we see the metrics that have been validated by a variety of sources. And then three, last but not least, we do that for less money than organizations typically spend today. So that’s a model. We know it works. We know it’s being adopted and people love it. So we want to keep doing that, and I will see what else comes down the pipe, but right now we’ve got our hands full, in a good way.

Jessica:

Yeah, sure. This is the IPO question of old.

Glen:

That’s right. That’s right.

Matthew:

Now Jess, you can ask about the IPO again, because he

[inaudible 00:15:42]

.

Jessica:

Yeah, right? Because I was denied.

Matthew:

He may fess up to it.

Jessica:

Even if still it’s denied.

Glen:

I can answer that question. We are going public, in fact.

Jessica:

Oh okay, good. Glad to hear it. You can watch the ticker go along the bottom of this right now.

Matthew:

So I have a serious question about sort of the iteration of that, right? So what you’re talking about Glenn, is national surveillance model. We have two things, we have the short term issue with people who may or may not have COVID-19. May or may not be positive. Maybe quarantining at home. We’re talking there was an article in the New York Times from Harvey Fineberg, and some others about quarantine in isolation, monitoring that process around COVID. And then there’s the bigger issue of how we’re going to track everyone with chronic illness, which is a lot of people as you mentioned, over time sort of more systematically, because they are going to be not only vulnerable to COVID, but they’re also been vulnerable to what they already have. Part of the reason Livongo is here, is we’ve done a pretty crappy job in the previous decades of figuring that out.

Matthew:

So there are a couple of things in there, right? One is more monitoring devices, more equipment, and more tools, internet of things. Another is access, you mentioned it, to coaching, but also telehealth, which you’re not directly providing. So give me a sense, roll the tape forward on what Livongo, or Livongo-like organizations or others, are going to be doing with those populations in the future?

Glen:

Well, it’s a great question. I think when you look at the future one, we’ve seen people are really taking advantage of telehealth. That’s great. People are taking advantage of remote monitoring. One of the things that we’ve started to see happening, Matthew, is we’ll get a call in the middle of the night, and someone will say to our certified diabetes educators, or health coaches, they’ll say, “I have a sinus infection.” And so our first response is, “Well, why are you calling us?” And they say, “Because you’re the only ones available, and you’re the only ones who actually care.” And those two statements really mean a lot, because it’s saying you have to be available when they are, and when they need you. And second, you actually have to know who they are. You have to care about them.

Glen:

So what have we done in response? One, we’re working with all of the largest telehealth providers. So increasingly we’re able to do a hot switch over to them to say, “Let me get you on the phone with a doctor, and she or he can prescribe what you need for that or they can work with you.” There’s no other number to call. It’s very easy. It’s seamless. So that’s one thing that we’ll do in that respect.

Matthew:

Let’s switch to the sort of politics of this, right? The policy, because Glenn, you are known for having a strong relationship with a certain young senator from Illinois a few years back, who went on and did big stuff. And I know you’re involved in politics, on both sides of the aisle, but you lean one way, I would say. Give me a sense about what you think that the COVID crisis is going to do to, not only to the politics of the nation, but more particularly the politics of healthcare. A lot of people are saying, “We’re not going back on telehealth and some other issues,” but we’re going to have maybe 30 million unemployed people. What’s this going to do? you know, we just had a Bernie Sanders pull out of the Democratic nomination for president, but nonetheless, this is going to have a big impact. Speculate about what that’s going to mean for the politics of healthcare, and for the business that we’re all in.

Glen:

Yeah, I think that, first of all, the beauty of healthcare is really when you get down to it on both sides of the aisle, there’s a focus, and now there’s an increasing focus on the importance of healthcare. I don’t think that’s ever going to change. When we look at post-COVID, what’s going to happen, we’re going to see changes in education. We see more and more digital, it’s going to get better. We’re going to see changes in communication. So more and more people have been educated to use Zoom and other communication technologies and that will become more standard than it ever was before. And we’re going to see changes in commerce. Once people get used to ordering their groceries and everything else on Amazon and other services, I don’t think they’re going to go back, but most important we’re going to see changes in healthcare. And that is when people start to understand that they can have an appointment with their physician, and she’s not at risk, and they’re not at risk, and they don’t have to travel, that’s going to become the new norm. We’re already seeing the payment systems change for that from large payers and the like, and from the government. So I think there’s going to be very strong demand to keep these services, these reimbursements in place.

Glen:

We’ve also seen, again, new legislation coming up that starts to embed both remote monitoring and telehealth into the actual process as a reimbursable item. Now there’s other areas, we have to make sure it’s available to rural populations, to Indian health populations, to the uninsured. Really important. And I think even what we’re seeing in Washington right now, is there’s some coverage now being made available. The administration actually just came out, and proposed that they would actually reimburse hospitals for taking care of uninsured patients.

Glen:

And so I think we’re seeing, across the board, there’s an acknowledgement that we have to provide basic healthcare to keep the entire population safe. And if that’s one outcome, one good thing that can come from coronavirus, at a basic level saying you can’t just keep part of the population safe anymore, it doesn’t work that way, with viruses and communicable diseases. So if that comes out as a basic tenant, I think it will have been, I don’t know if it will have been worth it, but it will be a good, positive aspect of what’s happened from coronavirus.

Glen:

So I think you’re going to see, again, a move toward consumer digital health. It will become the new standard of quality care and healthcare.

Jessica:

And I’m putting on your investor hat, how does this all impact the state of play then from that vantage point?

Glen:

Well again, I don’t want to talk about our own stock, but I think-

Jessica:

No, not yours necessarily, but I mean through 7wire? (note: 7Wire is a consumer digital health venture fund of which Tullman is Chairman)

Glen:

We’re going to see, from a consumer digital health standpoint, from remote monitoring standpoint, all of those will take off. There’s other beneficiaries in every area, I think you’re going to see certain levels of stock take off across the economy, while others are challenged, and at least for some period of time, but clearly this has created a new kind of environment for people where they’re more self sufficient, they’re going to use more services at home, more individualized care, and the like. In healthcare in particular, every organization understands they need to be prepared to go digital, and that means being more consumer focused. So I think that bodes well for the consumer digital health sector in general, in terms of investing

Jessica:

L me ask real quick, between like an early stage startup and somebody that’s later stage like Livongo is, I mean is it too late for these early stage startups at this point? Or do you think that they’re going to have an opportunity, once we are post-pandemic here, to kind of catch up and capitalize on some of these changes that have been put in place on the different types of remote monitoring services or those easing of laws for telehealth?

Glen:

Well, I think right now the entire economy’s going to be challenged, and when the entire economy is challenged, higher risk investments tend to be the first ones to take it on the chin. So I think it’s going to be a difficult venture environment for a period of time for some of the younger startups that are out there. We were fortunate to take the company public when we did. We’re fortunate to have the financial wherewithal that we have, and so I think it’s going to be more challenging for some of the companies in that market to either raise money, or to go public, or the like. That said, good companies still will get out, and they will still do business, and we’ll continue to move forward, but I think it will cause some consolidation in the market just because companies that may have been funded in a robust economy that we used to have, will now probably get passed over.

Matthew:

Being specific Glen, I have my new startup, I show up to 7wire, are you guys stopping for three months? Or is it business as usual? Or are you just focusing on your current portfolios? I’m not asking about your day job, but you are the 7Wire chairman.

Glen:

Right now we’re laser focused on our current portfolio. While we probably would take something incoming, our appetite for investing anything in anything right now until we see what happens over the next few months, I think we’re essentially on hold for the next few months for new investments and doubling down because again, in this economy, remember even if you have a great company, if you’re selling to certain companies, if you’re selling to airlines, if you’re selling to hotels right now, they aren’t out there looking to buy new things. They’re out there trying to figure out how are they going to survive this downfall. They will, they’ll survive it, but in the short term walking in to sell them some new service right now. Now after you have a relationship, or if you can demonstrate, as we do at Livongo, we’re actually going to reduce their costs, then that’s a net positive, because we’re going to see HR professionals become more aggressive about taking care of their vulnerable populations and providing solid benefits to their people because that’s going to be where the focus is.

Glen:

Everybody today is going to be focused on what’s my healthcare coverage look like, and what happens if I end up getting sick? And so we’re going to have an intense focus there, and we’ve already been approached by a lot of very smart, aggressive human resources professionals who’ve said, “We want to double down, just like Kaiser did, we want behavioral health for our population. We want it now. How quickly can you get it to us? We want to make sure all our people who are vulnerable, like are people with diabetes or hypertension, that we’re getting them the best remote care possible right now,” because the alternative is our healthcare system is overstressed right now. They can’t get great care. And the last thing you want to do right now is show up at a hospital, because you’re at risk of being infected by somebody who’s there, who does have COVID. So we want to try to keep your population away from those folks right now, or those places right now? And remote monitoring is the best way to do it.

Jessica:

So as far as that goes, I mean, so there’s a series of circumstances here that are shining such a light on remote monitoring companies, telehealth companies, other digital health companies. So give us some advice. I mean, how do we not mess this up as a sector? I mean, what are some of the do’s and don’ts here? I mean, you’re dealing with a lot of very large employers, like you said, you’ve been talking to them, what they’ve got their eye on is they’re going to evaluate this post-pandemic. So what should we do, or not do, as an industry in order not to blow this opportunity?

Glen:

Well, I think we go back to the basics. One, there’s a ton of education going on. Two, you have to have something that consumers love, that demonstrates that it really works. And last but not least, that actually doesn’t increase the cost and ideally decreases the cost, because people aren’t going to be looking to make huge new outlays of potential. So if you look at diabetes prevention right now, it’s nice to prevent diabetes in the future. Right now everybody is laser focused on what about today? How do I take care of my people with diabetes today?

Glen:

So I’m less interested in prevention right now. I’m not saying that’s good or bad, it’s just the reality of this economy. It’s one of the reasons that we extended our behavioral health platform in particularly, we developed a separate offering for COVID-19, plus stress management, plus anxiety, plus some parenting at home kinds of modules, and we packaged that up, and said it’s free. It’s at no cost, is a better way to say that, because it’s not free to us. It’s a cost for us, but we’re providing it at no cost for 90 days to just get people over the hump. Get them back on track. And so that’s, I think, what you’re going to see good companies do.

Glen:

And then we’ve seen some extraordinary corporate behavior. Today I read that Dorsey from Twitter was giving a billion dollars. Great companies are stepping up in a variety of ways and we’re trying to talk to every one of our and say, “How can we help?” And it’s not just about selling them something, it’s about how can we really be helpful, because we’re betting on long-term relationships. That’s the business that we’re in.

Jessica:

Good advice. Mr. Holt.

Matthew:

We’re coming to the end of our interview. I just got a notice that I’m looking at the stock chart behind the screen here. Glen, absolutely nothing has happened to your stock at all. It’s exactly the same price as it was when you started the interview.

Jessica:

Thank God!

Matthew:

Well I guess it didn’t go down 10%.

Glen:

Well, you know , our CFO Lee Shapiro likes to start every meeting saying to our people, “You are not your stock price.” And we are, as you know, I have a personal relationship that really makes this intensely personal. My son was diagnosed with type-I when he was eight, he’s now 25 and doing well. But many of our people, about a third of our people, either have a chronic condition that they’re dealing with, or have a family member who does. So this is very personal for us. So whether the stock goes up or down on any given day, what we’re interested in, is what’s happening? How are we empowering more and more our members to live better and healthier lives? And that’s really the focus. That said, I like it when the stock price goes up.

Matthew:

You know, you’re a human, you’re a capitalist with a human face. No, but you’re dead right. You started this with the right attitude. We have to think about we’re dealing with a population of the people on the front lines, who are really doing heroic work in many different places. And we’ve got to think about how are we going to change the way we deal with not only the economy, but also with healthcare in the future. No, that’s dead right. And obviously, Livongo and companies like you, and the folks like us in Digital Health, obviously a big part of that. We have a bigger responsibility than we probably ever had before. So I think it’s a key time for people, like you know, you’ve been in this awhile.

Jessica:

I love how you’ve lobbed him in that.

Glen:

I think this is a very unique time. I mean, I really do. We have an opportunity today, everybody understands the real importance of health and of care, and how we have to deliver that to as many people as we can in this country and around the world. That’s our opportunity right now.

Jessica:

All right, Glenn. Well thank you so much for joining us. Matthew, thank you for behaving yourself for the most part over there. For those of you who want to catch the replay of this interview, we are going to be posting it up on thehealthcareblog.com, on their YouTube channel, and then I will also have it on WTF Health. So Glen, thank you. Stay safe there in Chicago. Mr. Holt, I’ll see you again soon. Thanks for joining us everybody.

Glen:

Thank you both.

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