The alarming scale of the opioid use disorder (OUD) epidemic has resulted in unprecedented human and economic devastation, and there is significant opportunity for digital tools to alter the gold standard of care to one that is ongoing and on-demand.

The epidemic has only worsened since the onset of COVID-19, given heightened economic instability, social isolation, disruption to transportation and decreased access to in-person support services.

We have begun to see increased proliferation and adoption of data-driven, on-demand telemedicine solutions by providers. The pandemic in particular has accelerated the normalization of virtually enabled care and familiarization with digitally delivered treatments amongst clinicians, pharmacists, caregivers and patients alike.

The convergence of all these factors – the shocking negative impact on human life, an uptick in digitally driven innovation in the OUD space and a willingness by providers and patients to adopt such solutions – makes investments by all key stakeholders throughout the healthcare ecosystem in the OUD digital health space both attractive and timely.

Although there has been a significant amount of digital disruption in the OUD market, lingering unmet needs exist, as many current solutions require a mix of in-person and app-based interactions. Relaxation of in-person visit requirements and reimbursement parity for many telemedicine services amidst COVID-19 bode well for continued use of these virtual interventions.

In order for telehealth and telemedicine to truly enable expanded access to care for geographies lacking trained providers or community health resources, we will need to see increased innovation in digital-first, direct-to-consumer tools, as well as an extension of reimbursement.

Until then, more integrated and comprehensive tech-enabled solutions that incorporate medication-assisted treatment (MAT) while minimizing in-person interactions will be increasingly important. In the next few years, we will likely see:

• Increased normalization of digital or app-based programs as the standard of care.
• On-demand and ongoing remote care, rather than episodic delivery.
• Reduced stigma and lifestyle disruption due to accessible digital solutions.
• Employers bundling digital OUD services in benefits to improve employee wellbeing and reduce total medical expense.
• Payers shifting towards value-based outcomes for OUD programs, with digitally enabled services to monitor compliance and incentivize retention.
• Acceleration of partnerships between technology and healthcare providers.
• Big techs partnering with more ‘traditional’ healthcare companies to expand access to services and improve delivery of digital OUD treatment options.

Human and economic impact of opioid misuse – and the impact of COVID-19

Opioid abuse results in massive destruction, both in terms of cascading financial consequences as well as loss of life. In terms of the monetary impact, the opioid addiction epidemic costs $200 billion annually. Given the magnitude of loss caused by opioid abuse, as well as the strain on an already overburdened healthcare system, the need for more effective OUD treatments is both dire and time sensitive.

Particular demographics are at heightened risk. Rural communities face a myriad of social and economic factors, compounded by a lack of availability of in-person treatment. Additionally, the number of expectant mothers struggling with OUD has quadrupled over the past two decades.

Youths are also disproportionately affected, with nearly 4,100 fatal overdoses in 2017 alone. Additionally, the VA has published studies finding veterans at higher risk of opioid overdose or suicide death, highlighting the need for ongoing digitally enabled resources and follow-up care.

The 2020 COVID-19 pandemic has accelerated the intensity of the opioid crisis and need for innovations in care. American Addiction Centers reports that the economic impact of COVID-19, with 20.5 million jobs lost in April alone according to the Bureau of Labor Statistics, has exacerbated the link between substance abuse and unemployment.

Depression and anxiety fueled by social isolation have led to upticks in relapse numbers, and social distancing has reduced capacity for in-person treatment facilities and support groups. Even by June 2020, relapses were rising substantially in the Appalachian Mountains region, which has historically been flagged by the CDC for inordinately high numbers of opioid overdoses and deaths. Nationwide, overdose deaths increased by ~15% between March and June 2020.

With a turbulent path forward regarding state regulations, public health and economic conditions, the utility of digital tools to provide ongoing care for OUD patients is critical.

Policy changes and implications driving digital

Outside of population-specific and COVID-19 related concerns, broader U.S. policy changes in recent months and years are conducive to wider adoption of digitally enabled OUD care. In the wake of the COVID-19 public health emergency, CMS temporarily expanded Medicaid and Medicare reimbursement to include parity for in-office and telehealth visits.

Prior to March, only 14,000 Medicare beneficiaries had received a telehealth service in a given week, while over 10.1 million utilized telehealth from mid-March to mid-July 2020. The massive spike in usage demonstrates both a need for and willingness to adopt telemedicine across both patients and providers.

A similar silver lining of the pandemic-induced public health emergency was the relaxation of the 2008 Ryan Haight Act, which amended the federal Controlled Substances Act to impose a prohibition on prescribing controlled substances without having first conducted at least one in-person medical evaluation, with some exceptions.

In March of 2020, the DEA confirmed that the public health emergency due to COVID-19 qualified as an exception, thereby enabling providers to prescribe controlled substances via telemedicine. A patient can therefore complete the entire process, from screening and diagnosis to obtaining a prescription and beginning treatment, entirely via virtual means.

Further, in early August 2020, President Trump signed an executive order to expand rural health access to telemedicine, while CMS released the proposed physician free schedule for 2021, which included bolder telemedicine allowances, including the extension of reimbursement parity.

These actions by the political and healthcare authorities bode well for both telemedicine and OUD treatment, signaling a broader movement towards expanding access to and reimbursement for virtually enabled health services. According to their founders, companies like Ophelia and Bicycle Health have taken advantage of the flexible legislation to launch exclusively virtual OUD programs and seen positive enrollment results.

Digital OUD treatment landscape: Opportunities and predictions

The current treatment landscape combines a mix of digital and in-person services. A small number of competitors offer comprehensive, integrated solutions incorporating MAT – albeit requiring in-person interactions at the start and/or at defined intervals, though waiving the in-person visit requirement – has allowed innovators (e.g., Bicycle Health, Halcyon Health, Ophelia, Workit Health and Eleanor Health) to pursue a virtual model aggressively, if not exclusively, from the outset.

However, the majority of players in the digital health OUD space focus on engaging with users to supplement MAT: connecting users to treatment facilities, support groups, virtual guidance and coaching, or otherwise acting as a companion tool to enable ongoing and on-demand access to the overarching treatment program (e.g., DynamiCare, Pear Therapeutics, Boulder Care, Groups, BUP app, Help Near and Now app, Marigold Health, and Path).

Provider-focused tools also exist, such as clinical decision support tools and integrated care platforms, which enable clinicians to better assess risk, monitor compliance and update treatment plans accordingly (e.g., Quartet Health and WeConnect Health Management).

COVID-19 has further exacerbated the opioid epidemic and demonstrated both the need for more accessible solutions, as well as the opportunity for telemedicine and digital health to bridge gaps in care, expand access to services and aid in destigmatization. CEOs of several leading healthtech companies have noted that COVID-19 has changed the treatment landscape, as relaxed regulation and increased need fuel virtually enabled care.

“[COVID-19] changed things massively, with more overdoses and people unable to access a local doctor or group,” Ankit Gupta, CEO of Bicycle Health, said. “Unemployment and mental health issues have worsened … pointing towards a worse opioid epidemic. We are trying to … see patients as quickly as possible. … Because of this additional demand and adjustments to regulation, we increased our monthly enrollment rate 20x and [have grown] geographically.”

Dr. Corey McCann, CEO of Pear Therapeutics, which offers prescription digital therapeutics for OUD and SUD, noted that COVID-19 has pushed the world “… into a remote care setting, accelerating the integration between telemedicine and PDTs.”

He pointed out that this creates an opportunity for seamless user acquisition and engagement, whereby a patient can “self-identify with an online ad and then click through to receive a diagnosis and prescription.”

In a similar vein, Zack Gray, CEO of Ophelia, pointed to the need for convenience and accessibility.

“If you think about it, people can text their drug dealer, so treatment should be better and easier,” he said. “It needs to be just as discrete … people are more incentivized if they can start and receive treatment at home.”

There is an opportunity for technology to build on existing capabilities and address persistent unmet needs relating to lack of care coordination, barriers to treatment initiation and modification, and a provider’s ability to evaluate patient risk and monitor compliance. Industry sources, including Rock Health, have stated that technology can mitigate issues around consumer behavior and gaps in treatment.

In the coming years, we will likely see:

Increased normalization of digital or app-based programs as the standard of care. 

With the majority of individuals not receiving evidence-based treatments and empirically supported programs, 40-60% of those who receive treatment for SUD at all will relapse. Tech-centric solutions that rely on evidence-based programs allow for frequent data capture, patient engagement and increased adherence.

Patients are increasingly familiar and comfortable with wearables and other connected apps to monitor health, and value the empowerment that coincides with real-time and accurate health metrics relating to a treatment plan. App-based solutions can leverage continual data collection and bodily metrics, enhancing the ability of patients and providers to evaluate MAT dosage or symptoms and modify care regimen accordingly.

“Certain patients engage with technology in a way that is an order of magnitude greater than in person or via phone,” McCann said, “Remote but synchronous care … provides opportunities to care for patients between monthly visits with providers. It really plugs the gaps.”

The need to implement virtually driven primary and urgent care amidst COVID-19 has accelerated provider comfort with tech-enabled solutions and patient willingness to receive care in this manner, particularly when care has been shown to be equivalent in quality with increased convenience.

On-demand and ongoing remote care, rather than episodic delivery.

Rather than ensuring continual follow up care and a seamless patient journey, the reactive nature of addiction care historically manifests in bursts of intensive treatment with no ongoing support.

In the next few years, patients will demand the same level of on-demand access to care that they experience with other app-based services. Such consistent updates are preferable on the provider side as well, since data-driven apps allow care managers and sponsors to monitor and communicate over the course of a patient’s journey in a scalable manner.

“The recent legislative changes allowing for us to deliver services entirely over telemedicine makes it easier for patients to engage, especially for people in rural America who weren’t in driving distance of the right doctors before,” Gray said. “Now, people are more incentivized to engage if they can start treatment from home.”

The on-demand nature of telemedicine is complemented by remote testing, which further addresses issues of episodic care delivery and noncompliance.

“DynamiCare does remote substance testing, which works well amidst COVID-19. The vast majority of in-person providers don’t have a good way to do [that],” Eric Gastfriend, CEO of DynamiCare, said.

Given that about two-thirds of patients in OUD programs do not receive proper ongoing urine testing and that noncompliance remains an issue, the ability to utilize technology to enhance testing and compliance is critical.

“Applying positive incentives with the right paradigm of care improves both retention and outcomes,” Gastfriend said. He further pointed out that “with MAT, we often see a big drop-off at six months, whereas you need to be in treatment for at least a year to significantly lower your chances of relapse.

"We can’t totally automate MAT with technology, so we use contingency management and motivational incentives as part of our digital care program designed to be used alongside treatment. It’s a difficult disease to conquer, and you need to use all the tools you can.”

Reduced stigma and lifestyle disruption due to accessible digital solutions.

One of the major opportunities for digital health is to reduce the associated stigma and perceived burden related to opioid abuse treatment, allowing individuals to seek care without drawing attention to the issue or disrupting their daily routines. Apps can provide on-ramps to more intensive or in-person interventions as needed, with the added benefit of guidance through the care process.

Gray pointed to models and brands that make patients feel good about treatment or being in recovery.

“Brands like Hims and Roman really focus on destigmatization,” he said.

Additionally, reducing physical and psychological barriers to access will be critical in catering to subgroups such as youths, pregnant women, veterans or rural populations which face nuanced and highly specific challenges.

“These individuals have not always been treated well by the health system,” Corbin Petro, CEO and cofounder of Eleanor Health, said. “They want to be treated with respect, as well as benefit from the convenience of technology.”

Removing the geographic roadblocks or the social repercussions of publicly seeking care for addiction via app-based solutions will significantly improve adherence and reduce relapses.

Gupta noted that he started the company after seeing chronic pain patients struggling with problematic opioid use, many of whom "weren't a population he would have associated with addiction, proving that anyone can get dependent on opioids. If opioids are one of the best tools to overcome acute pain, we need to improve treatment for addiction. It needs to be convenient, affordable and stigma free," he said.

Employers bundling digital OUD services in benefits to improve employee wellbeing and reduce total medical expense.

Employers can partner with digital treatment providers and/or health plans to offer anonymous and subsidized OUD coaching, treatment support and care navigation benefits for their employees, justifying the cost of providing these tools to employees with the cost-savings from avoided in-person care or hospital visits for OUD/SUD related issues.

This has been a common trend with mental health and wellness benefits, with employers increasing recognizing the cascading benefits of investing in employee’s mental wellbeing. Adoption of OUD benefits for employees would similarly improve workplace morale and retention.

Innovators have expressed enthusiasm for a future where OUD programs are incorporated into employer health plan benefits, but call out a hesitancy to engage with addiction and stigmatized conditions.

“Some employers really want this. … Labor unions too, since [OUD] hurts productivity,” Gupta said. “It’s a massive problem in every industry. We’d love to work more with employers in the future.”

Gray shared similar sentiments.

“We definitely see a path forward with employers,” he said. “Blue collar workers can get addicted to opioids needed for on-the-job injuries. Telecom or construction industries are also potential partners.”

Petro pointed out that COVID-19 may present an opportunity to reframe the issue, “Historically, employers have known this is a need, but haven’t wanted to touch it [due to stigma],” she said.

“[COVID-19] is an opportunity to change the landscape and framing to increase employer interest. The pandemic has created anxiety and uncertainty, and many are using substances to cope, potentially leading to misuse. This idea of treating those with ‘rising risk’ of substance misuse resonates more with employers [more than treating ‘addicts’]."

Payers shifting towards value-based outcomes for OUD programs, with digitally enabled services to monitor compliance and incentivize retention.

Given issues of compliance and retention relating to OUD treatment programs, especially when risk of relapse is significantly reduced after one year of treatment, it is critical that value-based care arrangements incentivize long-term recovery and reduced overdose readmissions or relapses.

Eleanor Health champions value-based care, which their CEO Petro said is “about efficiency of resource use.” They’ve designed a service that is a “longitudinal model and payment structure that incentivizes retaining patients” including both virtual and in-person care to address all types of barriers.

"We try not to evaluate patients based on black-and-white measures like negative urine drug screens,” she said, “since this incentivizes cherry picking of patients further along in recovery and doesn't recognize the impact of improvements in substance misuse, like we do in other chronic conditions."

She noted that they specifically try to avoid fee-for-service reimbursement, which incentivizes relapse over recovery, and have been "pleasantly surprised at the handful of payers who want to move into the value-based care space for mental health and substance use treatment."

Along the vein of incentivizing longitudinal involvement and prolonged engagement, DynamiCare offers a digital health program that complements treatment, with CEO Eric Gastfriend noting that “getting major payers to announce partnerships with incentive-based addiction treatment programs is a major breakthrough for the field” and has even resulted in additional NIH funding for addiction treatment research and trials.

Gastfriend added that it has found success in modeling itself after players like Omada, combining technology, hardware and coaching.

Big techs partnering with more “traditional” healthcare companies to expand access to services and improve delivery of digital OUD treatment options.

While there has been a significant uptick in digital activity in the addiction space, with startups focused on neurological conditions (including SUD) raising over $193M in venture capital funding in 2018 alone, gaps in access to technology driven by socioeconomic status, geographic barriers and a lack of historic partnerships between Internet and broadband providers and healthcare companies have prevented adoption.

A key barrier to broadly implementing telemedicine or telepsychiatry solutions for OUD lies in a lack of connectivity for rural communities, which is increasingly top of mind given the 2019-2020 COVID-19 pandemic and the need to expand Internet access for telehealth more broadly.

Even prior to the pandemic, Internet service providers, as well as those offering hardware and software components, have become increasingly critical and unlikely players in the digital transformation for OUD care.

In recent years, Microsoft has been working to bring broadband connectivity to three million rural Americans via their Airband Initiative, largely driven by the need for access to telehealth and virtual behavioral VA services. Similarly, AmWell, Anthem and Samsung America have partnered to expand access for Anthem members to the Samsung Health app and AmWell’s online tools.

Health tech companies have expressed enthusiasm for the ability and willingness of patients to engage with tech.

“A large percentage of patients are Medicaid and are surprisingly tech literate. Most patients do have their own smart phone with government assistance programs,” Pear Therapeutics’ McCann said.

Since many patients lack adequate service or cell data, Pear has built its offerings to “function with data caching so patients can use WiFi at a store or coffee shop to download content to use offline,” he said. “I actually haven’t seen smartphone fluency and availability to be [much of a] problem, since we don’t require the same video streaming you’d need for a telemedicine encounter.”

Gray noted that most of their patients already have access to the necessary technology, since their team members get patients from sites like Facebook. This is largely because they want to focus on those going through withdrawal, the “80% not getting treated before they get to the ER, ... so that we can make the [pain] of withdrawal better,” he said.

When asked about collaboration across the health and tech spectrum, Gray pointed out an opportunity for digital health and telemedicine companies to partner throughout the process with a company like Axial Healthcare that identifies patients at risk through work with insurance companies.

“There are so many players that the process requires participation from payers, providers, [and] employers … from a consumer perspective. It has to be narrow, but on the back end a labyrinth of stakeholders is necessary to make the process work,” he said.

However, there are some important barriers and risks to consider in light of the numerous benefits stemming from telehealth interventions:

Not all care may be suited to virtual delivery.

While some companies have seen no difference in outcomes with 100% virtual care compared to in-person, others note that technology is not a one-size-fits-all solution.

"After regulations were relaxed, and we moved to totally virtual care, I was pleasantly surprised to see no difference in outcomes,” Bicycle’s Gupta said. “We can provide a more convenient, timely service. It’s like a same-day urgent care for people experiencing opioid withdrawal and/or problematic opioid use. This is massively beneficial for people who would otherwise end up in the ER.”

He did note that it can “bring down” the level of care, since the staff has to “refer more people to higher levels of care, and discharge people to make sure they can safely receive care” if virtual care won’t be effective.

Similarly, Petro praised the ability to offer same day access, but said that “… we are agnostic to how a patient engages with us. … We need to be multimodal. We can be 100% virtual, but we believe in a flexible personalized approach to meet patients where they are and, overwhelmingly, our patients want a hybrid mix of interactions – both in-person and virtual.

"Some patients don’t have access to broadband {or] devices that can be used for telemedicine, or find the in-person connections to be critical. From a clinical perspective, there are certain levels of acuity that we’d want to treat in person.”

“Gate-keeping” barriers and coordination of care issues still exist, limiting applicability of these tools.

Even if digital tools can enable more continuous care, this does not settle the issue of patients failing to enter into the treatment funnel in the first place. Some 90% of individuals who need treatment for addiction do not seek it out. While many digitally enabled solutions circumvent barriers to treatment, they often require an entry point from a payer, provider or employer.

The unemployed and uninsured may not be able to utilize the digital platforms designed to alleviate the exact barriers they face. Additionally, populations suffering from comorbidities such as mental or chronic illness require intensive coordination with other specialists.

This care coordination is difficult to achieve due both to the lapses in care stemming from the episodic nature of overdose-related treatment and the desire for privacy and anonymity. If other providers are unaware of the patient’s SUD/OUD treatment, if it's done in “private” via a self-serve app, then the patient may be missing out on benefits from more coordinated care.

As such, digital tools may initially be more useful specifically to triage patients seeking additional care, or for longer term remote care for those requiring less intensive intervention. Further, regulatory complexity and issues of reimbursement further exacerbate logistical hurdles with OUD treatment.

“This is a space where payers move slowly as a means of cost avoidance, while patients face stigma,” McCann said.

Gupta pointed out, “We can’t truly provide effective behavioral healthcare when we get shoehorned into medical. We get the same reimbursement as a PCP visit, which doesn’t account for the complexity of [OUD].”

DynamiCare’s Gastfriend agreed that the challenge relating to digital health relates to reimbursement.

“There are digital formularies coming into existence, but it’s an open question,” he said.

He pointed out that it’s a challenge to be adjacent to, but separate from, telemedicine, where there is a better understanding of reimbursement standards.

“Telemed involves taking clinical paradigms and doing this over the phone or video, so at its core the payer is reimbursing services similar to what might happen in person,” Gastfriend said. “Digital health focuses on automating evidence-based best practices, and there isn’t always a CPT code.”

Michael Zubkoff, an award-winning Tuck School of Business professor and Director of the MD-MBA Program at Dartmouth, agreed that “the benefits of telehealth have been shown during COVID-19, but the question is the stickiness of reimbursement,” further reinforcing the intricate regulatory environment and gatekeeping barriers facing innovative OUD care.

In the coming weeks and months, changes to the regulatory environment and relative ease of adoption for digital tools, particularly for those unemployed or uninsured, will largely determine how quickly on-demand and digitally enabled OUD treatment will become the standard of care.

Alexandra Mullin is an MBA candidate at the Tuck School of Business at Dartmouth and a Flare Capital Scholar. Prior to Tuck, Alexandra worked at Forward, a primary care startup in San Francisco. Before joining the team at Forward, she worked as a life sciences consultant at Navigant. Following graduation, she plans to join the Enterprise Strategy team at CVS Health.

Ian Chiang is a principal at Flare Capital Partners, a healthcare technology and services-focused VC firm. Prior to joining Flare, he was the SVP of product and innovation and a founding member of CareAllies, Cigna’s family of multi-payer provider services, population health management, value-based care enablement and home-based care businesses. Previously, he was a digital health entrepreneur and a former management consultant at McKinsey & Company.