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» Pitfalls with Digital Health Companies like Cerebral, Trends in hiring, health disparities, and a discussion of death

July 5, 2022

Acrisure, Behavioral Health, Business Strategies, Digital Health, Economy, Employee Benefits, Health Equity, Health Insurance, Healthcare Innovation, Human Resources, Mental Health, News, Prescription Drugs, Research, Scope of Practice, Telehealth

Employers today are purchasing digital health benefits for employees across a number of areas of health, and you may be looking to create or add to your digital health offering at your company. But it’s hard to narrow your focus today because there are so many choices across so many areas of health. Let’s look at this area in more detail for anyone who is purchasing or has purchased digital health benefits for employees and wants to know what they and their employees are getting.

The market for digital health benefits has absolutely exploded in recent years. In 2021, a whopping $21 billion was invested in digital health companies.

For context, that figure was just $1.2 billion in 2011. And since then, $85.6 billion has been invested in digital health companies overall. Yet despite this astonishing level of investment, many companies have been found to not perform well from a clinical perspective. Researchers found that 44% of digital health companies have “low levels of clinical robustness” in a 2021 study.

That’s pretty academic, what does that mean for an employer in layman’s terms?

It means that the company you’re paying for a needed employee benefit might not be up to snuff from a medical care standpoint. They’re not operating at the same level a hospital or doctor’s office should be, and they’re not delivering quality care as a result. This could result in overprescription of medications, incorrect diagnoses or treatments, and more.

Let’s talk about Cerebral as a recent and notable example of this.

Recently, Cerebral encountered significant issues and its CEO stepped down because it was issuing drugs like Adderall to patients without the same rigorous assessment that a medical provider should go through. They were prescribing Adderall after a 30-minute consult, whereas a medical provider usually takes multiple visits and interviews with a patient before issuing a prescription for that drug.

This Twitter thread goes into greater detail about issues like providers resigning in fear they were being asked to practice beyond the scope of their expertise and license, issues with the ratio of nurses to overseeing doctors (4:1 in CA but unlimited in other states, so Cerebral worked around local regulations), inability to comply with local oversight regulations once COVID waivers expired, and more. It’s concerning because the incentives in place for that company are present in many companies. Leadership and integrity are the bulwarks against this kind of behavior at other organizations, but it’s hard to necessarily know your vendors are doing the right thing.

So lean on your consultant but do your research as well. If you’re paying a vendor for medical outcomes, pay close attention to their work and how it stands up to clinical standards in their field. It’s important to differentiate your benefits offering today but only with strong clinical programs that will deliver on what they say they will do.

Other Things to Read…

Is it a good or bad time for a health-tech company to raise?: Christina Farr (@chrissyfarr) is a health-tech invester and published anonymized findings on the current climate for the private health tech market with a potential recession on the horizon. I think the discussion is relevant for private companies across other industries. The short story: growth stage companies seem to be pivoting quickly and focusing on profitability, early-stage companies are staying the course, and investors are concerned about the broader markets but still see an opportunity to invest further.

I liked this chart below which shows the splits on hiring strategies right now in the private healthcare space.

Insurers are denying a lot of in-network claims: insurers denied 18% of in-network claims in 2020.

The denial rate varies widely by state and insurer from a low of 1% to 80%. This is for public marketplaces not commercial plans, but it’s still an issue with employer-sponsored plans.

Racial disparities in use of new diabetes medications: Black adults are about 4 percentage points less likely than whites to use newer, more effective diabetes drugs, a disparity of 27 percent.

These kinds of racial disparities show up in seemingly every corner of healthcare. As an employer offering health benefits, you need to understand how the same coverage offered to everyone might not always result in the same access and outcomes for all your employees.

My Twelve Rules for Life by Russ Roberts: Russ is an economist and put a neat list together for how to live life. It’s got some interesting ones, in particular I oddly connected with #8 “Give up a lot to be at a funeral.”

We went to a funeral for my fiancee’s family member a few months ago and it’s a pretty powerful experience even if you didn’t know the person well/at all. It’s a good reminder of what’s important in life and you see the world a bit differently afterward. I’ve found myself down an end-of-life rabbit hole, which started with me reading “The Top 5 Regrets of the Dying” and “The Death of Ivan Ilyich” which were both fascinating. And unfortunately, I’m thinking back to that funeral because my first task back from the holiday is to start processing my first death claim in this industry.

Life is short. Love, live well, and work on something important.


Posted by in Acrisure, Behavioral Health, Business Strategies, Digital Health, Economy, Employee Benefits, Health Equity, Health Insurance, Healthcare Innovation, Human Resources, Mental Health, News, Prescription Drugs, Research, Scope of Practice, Telehealth