In a market dominated by reactive healthcare measures, there's no existing framework for pricing emerging preventive health solutions. How do we place value on preventive health measures to better meet the needs of individuals and organizations – and attach an appropriate price tag?
"What's your pricing model?"
As a founder of a digital health product, this is a question that I am all too familiar with. For founders of companies large and small in the digital health sphere, the response is often: “the one you’re willing to pay.”
movr offers digitally-driven, hyper-personalized corrective exercise protocols. These have been shown to improve range of motion and strength while decreasing muscle-related tension and discomfort. In other words, we measurably improve musculoskeletal health at scale.
But offering a proven preventive solution that improves MSK health dysfunction isn’t enough. It’s just what gets us a second call. When it comes to making the decision to purchase a digital health product, conversations inevitably end up at the same place – how much money can we make off this?
Current marketplace & financial modeling
Financial modeling is typically done by trying to measure the number of dollars (payer pain) an employer or insurer loses when someone requires surgery, visits a physical therapist, or misses a work day because of pain. In contrast to measuring care costs, forecasting cost savings is done by blending engagement, utilization, or retention rates to upsell a digital health product.
Payer willingness to invest in products offering upstream health interventions is dependent on whether the data shows that it will be a valuable investment. The buyer wants to make a decision based on proven behavioral and lifestyle change data that takes long periods of time to gather. This remains true even as the demand for preventive solutions continues to increase.
If a preventive health product must measurably demonstrate a reduction in acute MSK care (fewer physio visits, surgeries and missed work days) to be adopted but there isn’t an appetite to invest in emerging solutions, we will continue to see MSK dysfunction rise while those prospering from that dysfunction continue to be the loudest in the market. Why wouldn’t they?
The current marketplace for MSK solutions is dominated by reactive care that has been built around the expectation that demand for acute MSK care will continue to rise. This is supported with existing and more easily understood pay models (CPT, RPM or RTM reimbursement) for reactive based health (sick) care. If someone is hurt and needs physical therapy, it makes sense to have a covered amount for that person’s care.
This has led to physical therapy primarily innovating by offering what was once a mandatory in-person visits to be available via telehealth and remote patient monitoring. Companies like Sword and Hinge make the bulk of their revenue through 1-1 telehealth physical therapy sessions or remote therapeutic monitoring (RTM codes). So while access to sick care has expanded, it still relies on someone being injured and is limited by the number of available health professionals.
The growing costs of MSK are attributed to our health systems treating the problem too far downstream. Consumers feeling the actual pain – and the employers and insurers who bear the cost - are asking for solutions, making the market ripe for new, scalable preventive solutions to emerge.
And they are.
Pricing for Preventive MSK Health
There are a number of consumer-first approaches to improving MSK health that offer a preventive approach. These products encourage and guide people through stepped approaches to better movement and lifestyle practices, and can do so with personalization and scale in a way digital health hasn’t seen before.
The challenge is to offer these solutions in a way that buyers are willing to pay for in today’s market conditions. There are innumerable approaches that can work, but there are few established industry pricing models that work well in the preventive health space. It’s a tricky balance to strike – meeting the health needs of individuals and the financial needs of corporations when we’re only just beginning to understand how to qualify and measure preventive health.
In order for any model to work within this emerging market, both buyer and seller must be aligned on the incentives and mutually bear some degree of risk. This requires startups like movr – and our buyers – to think outside the box and try something new.
Personally, I believe lower eligible or enrolled licensing fees + higher milestone payments based on engagement and measurable health outcomes is the best way to mutually align incentives so that money flows in the direction of better preventive health improvement. This will enable better access to health for the consumer, incentives to improve enrolment rates from the payer, and accountability on the provider to actually deliver long-term value.
If buyers and sellers of preventive health solutions aren’t willing to compromise, we’ll continue to see more people get hurt, more payers complain about cost, and more acute care solutions talking about improvement while really just focusing on how to squeeze the most out of sick care margins.
But that’s just my opinion. What do you think?
About movr
movr is a digital MSK & movement health solution, working with leaders in digital health by integrating smart assessments and personalized exercise solutions into existing health & wellness platforms.
movr's research-backed approach has been validated through over half a million movement assessments and personalized exercise recommendations.
To learn more, visit our website or contact us.
