Episode 46: Expanding a DTx Business from the EU to the US with Petter Aasa of Vitala
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In this episode you’ll discover:
How continuous touch can help patients’ health improve continuously
What the similarities and differences are between the EU and the US in the healthcare space
Why healthcare companies should focus on preventive healthcare
What Petter recommends for EU companies that plan to expand to the US
Keep scrolling for a transcript of this episode.
Key Takeaways
Remote therapeutic monitoring codes came about with the belief that continuous touch with a patient during the course of their needs for exercise and therapy is going to help them progress instead of backsliding. This part of the process needs to be reimbursed to make sure that it is continually done and that the patient’s well-being continuously improves.
The US and EU face similar challenges. Both markets don’t have a strong focus on preventive healthcare, focusing more on improving reactive measures. One difference is that the EU is very good at building innovation but is not good at supporting companies’ transition to adaptation which is why many EU companies migrate or expand to the US.
Both the US and the EU market have a lot of incentive to focus on prevention: an aging population leading to a high prevalence of chronic diseases, rapidly increasing healthcare costs, and how diet, sleep, alcohol, and tobacco usage account for 90% of the total health determinants.
Find the right regulatory and compliance partners because that is the hardest thing for a startup coming overseas to navigate through. Massive amounts of time, energy, and money can be saved by partnering with experts.
Learn more from Carrie and Rebecca:
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“We’re focusing on providing the best possible care for the patients while also solving a big problem for the providers, which has been that they don’t have the right tools, energy, or the time to focus on prevention. They’re stuck focusing on reactive treatments, which are fine, but it’s not where the future is at.”
Learn More
Website: https://www.vitala.health/en/home
LinkedIn: https://www.linkedin.com/in/petter-aasa-103245a9/
How NGL helps International Companies Enter the US Healthcare Market: https://nixongwiltlaw.com/international
Case Study: https://nixongwiltlaw.com/case-study-antidote-health
How NGL Helps DTx Companies Find a Path to Commercialization: https://nixongwiltlaw.com/digital-therapeutics
Read the transcript:
Announcer (00:01):
You're listening to Decoding Healthcare Innovation with Carrie Nixon and Rebecca Quilt, A podcast for novel and disruptive healthcare business leaders seeking to transform how we receive and experience healthcare.
Carrie Nixon (00:17):
Hi everyone. This is Carrie Nixon with Decoding Healthcare Innovation. I am delighted to be joined today by Petter Aasa, who is the founder of Vitala. Vitala, if you are interested in looking them up on the web, can be found at vitala.health, and that's one of those interesting sort of suffixes to the ".com" thing that can throw things off. So I wanted to make sure that you knew how to found to find them. But Vitala, interestingly is based in Sweden. They are now entering the US market and they are a digital therapeutics platform for the prescription and monitoring and management of diagnosed specific medical exercise. So Peter, welcome to the show. Introduce yourself, tell us a little bit about your background and talk to us about how you came about to found Vitala.
Petter Aasa (01:14):
Yeah, absolutely. Thanks Carrie and super happy to be here. I've been listening to a few, couple previous episodes and I'm very happy and honored to be part of the show. But yeah, my name is Petter, and I'm the co-founder and CEO of Vitala, like you said. My background is actually maybe from what I'm seeing actually, a lot of entrepreneurs within the health tech space are actually not coming from a clinicians standpoint and they're not clinicians themselves. But yeah, I was the first one in our big family back in Sweden that didn't go into either medicine or physical therapy. I wanted to go into finance instead, but that was short-lived as I quickly after a couple of years working with in finance, found myself founding my first company within the digital health space. So Vitala is our second company. I founded it along with my brother Jasper, who's a medical doctor.
(02:08):
And we are so happy to be part of this global shift towards preventative healthcare and having one of the many solutions to really help patients with chronic health conditions become more active in their overall healthcare plans in order to obviously boost the patient outcomes at a lower overall healthcare cost. And yeah, we do that. We have a platform, just like you said, consists of a care portal for the providers themselves, so they can quickly prescribe, monitor, manage the specific software as a medical device with a mobile app for the patients that is able to custom tailor daily physical activity depending on the patient's unique combinations of medical diagnosis, their functional ability, musculoskeletal pains, daily forms, and obviously the goals and preferences.
Carrie Nixon (02:58):
So Petter, I mentioned when I described Vitala that you prescribe medically appropriate condition-specific exercises. Can you talk a little bit more about that in particular? I think that's a bit of a differentiator for you all.
Petter Aasa (03:15):
Absolutely, absolutely. And when we're looking at exercise or specifically physical activity that is part of the patient's overall medical treatment plan, then there's certain aspects that we take into account. And if you're looking at the broad range of diagnosis, you need to make sure that you can do it or prescribe something to the patients that's always going to be safe for them. Safety is number one. And then we're looking at efficiency or how can we actually making the medical treatment more efficient through our own services. So we can generate from multiple therapeutic areas, everything from oncology, cardiology, neurology, but also now very big within primary care or within outpatient settings, helping patients become more active in the treatment plans to either prevent diseases or to be part of the treatment of certain diseases. So we can generate, let's say for example, within oncology, if there is a breast cancer patient being diagnosed with breast cancer in Sweden today and they're starting their chemotherapy, then they're automatically being prescribed our service, Vitala, as well, to be a part in helping them be active or physically active during and after the chemotherapy in order to boost the medical adherence, boost the medical treatment, and improving the physical and mental wellbeing of the patients in the process.
Carrie Nixon (04:42):
Yeah, I think that's super interesting. You don't typically think of oncology as a condition that would require some specific exercises, but certainly it does, and I'm really pleased to see the emphasis on that use case in particular. So you know, are in Sweden, you have started out in the EU. Tell us a little bit about the traction that you've gotten in the EU about your clientele there and how your services work and what are largely, I think, single payer systems, is that right?
Petter Aasa (05:15):
Yeah, both within, I mean a single payer and multi-payer systems in Europe, but I'm happy to share that we just passed having helped over 7,000 patients across the Nordics. We are integrated into, well in Sweden, it's I think eight out of 10 of the largest hospitals. We're working with the two largest private healthcare providers as well. So across the Nordics, we are able to show our services are doing what they're supposed to do or that we can show that it's an evident evidence-based model through physical activity that we can help the patients. So that's the traction that we have in Europe right now. But obviously if you're looking at the Europe versus the US or Sweden specifically, we are a large player in a small pond, I would say. And Sweden is an amazing market to show the efficacy of your product and build the case for these types of proactive digital therapeutics, but it's not the market that you're necessarily scaling as a startup.
Carrie Nixon (06:21):
Yeah, no, that makes perfect sense. And congratulations for all of the successes in Sweden and the other Nordic countries. I suspect that that has allowed you to collect a significant amount of data and clinical evidence that will be very, very useful to you as you enter the US market. Tell us a little bit further about what made you decide to enter the US market and how you are thinking about your market entry into the us.
Petter Aasa (06:55):
Absolutely. It's a very good question. I think we can probably spend the entirety of today just talking about these different questions, but from a big, from a broader perspective, the decision to enter into the us the simple answer is just that it's a much larger market. This is the big carrot for I guess all of the European healthcare startups. They want want to make it into the US because this is where the money is essentially. In Sweden, we don't necessarily have the reimbursement systems and we don't really have the system in place to really scale these sort of healthcare services. But in the US we see more and more of that happening now thanks to the CMS as well. And so the decision to make it across the US or make it across the pond to the US was a fairly simple one, but doing so is a lot harder than what I would initially suspect, but I guess you have to be a little bit of naive in the beginning. But yeah, quickly establishing and finding the right people to help you is key.
Carrie Nixon (08:07):
Yeah, that's right. It's almost a good thing probably that some of your colleagues, startup colleagues overseas don't necessarily know what they're getting into when they enter the US market because it might sort of dissuade them. But I have found that once folks from with overseas companies in the healthcare space sort of find, as you said, the right people to help them get educated on how our system works and how it's different, the glide path smooths a little bit. So it really is important to find those right partners. So I believe that you are focusing in part around this new concept called remote therapeutic monitoring. Can you tell us a little bit about why you're focusing your efforts there? Not that you are sort of limiting yourself there, but why is it that this concept of remote therapeutic monitoring is useful and helpful for patients who really can benefit from some type of exercise program?
Petter Aasa (09:26):
Absolutely. And for all the listeners there as well, maybe I can take a step back and just talk about these remote therapeutic monitoring or the RTM codes that I will be referring to them. And the RTM codes is essentially the next breed, I would say from the RPM codes, it serves to monitor non physiologic patient data for specifically the musculoskeletal and respiratory system to help with therapy adherence, therapy response and tracking pain as well from these patients. So it makes it for quite a different case than from the traditional or not traditional, but the older RPM codes, mainly because it's data and you don't really need any external devices to capture this data. So for us, essentially what it means is that when we're working with diagnosis specific medical exercise for the patients, which is part of which can be qualified for these new R RTM codes provided by the CMS, it means that when a provider wants to obviously provide better care for their patients, now they can also earn additional revenue streams from it.
(10:37):
So today, how it works for a provider in the US if they're prescribing Vitala as a a digital therapy for their patients in order to slow down disease progression, lowering the risk of comorbidities or medical complications, increasing the physical and mental wellbeing for them, they can do all of this, but now they also make additional revenue streams from it. I think the first month from this new RTM codes, the physician or the provider themselves can make up to $150 per patient, and then it's over a hundred dollars continuously for these different patients that have Vitala as digital therapy during their medical treatment plan.
Carrie Nixon (11:20):
And I want to hone in on a few things that you've said there. You've referenced sort of the RTM, the remote therapeutic monitoring codes. And this is a probably a pretty significant distinction between the US market and the EU. A lot of our healthcare is provided on a fee for service system whereby various things are paid as they're ordered and done. And so the remote therapeutic monitoring codes really came about, I think with the belief that this sort of more continuous touch with a patient month over month during the course of their needs for exercise and therapy is going to help them not backslide, but instead progress, not have to come in for additional visits, but still allowing the clinician who is guiding that patient to understand how they're doing with their exercises, do they make them feel better? Was a particular exercise really painful, that type of thing.
(12:34):
And from my experience in this space that the value there is something that previously was not paid for and reimbursed. And so we always like to say here in the US in healthcare, if it's not paid for, it's not done. And so this is a way to make sure that clinicians are able to monitor their patients with a much higher touch on a much more sort of longer term basis to manage their care. So I commend you for finding that niche in here in the US market and seizing that opportunity to really make a difference for patients while providing reimbursement for clinicians who otherwise just weren't getting it for helping their patients.
Petter Aasa (13:31):
Exactly. And I think that's key of these new reimbursement codes because what it essentially does is that it makes high quality evidence based care more accessible to all patients. Yes. And that's including population that have historically been underserved due to barriers to care such as income, language, mobility and transport, transportation and so on. I think it's a big step, but I'm also excited to see what's going to come next because if we're looking at the evolution of these reimbursement codes from the beginning, one can only speculate what's going to come next. But of course, with all our, we don't focus on the specific reimbursement codes from the CMS. We're focusing on providing the best possible care for the patients, while also solving a big problem for the providers, which has been that they don't have the right tools or the energy or essentially the time to focus on prevention. So they're stuck just focusing on reactive treatments, which are fine, but it's not where the future is at, I would say.
Carrie Nixon (14:34):
Yeah, yeah. No, no, I totally hear you. And what you're highlighting are some differences I think in the approaches more classically found in Europe to healthcare where my guess and my understanding is that there's a more focus on preventive services and in the US where we're very, very limited in our emphasis on preventive services, it is often said that we don't really provide healthcare here in the US. We provide sick care in the US. And I, for one, would love to see us move towards providing real healthcare in the US, which includes an emphasis on preventive health. But so talk a little bit more with us about some of the similarities and some of the differences that you have noted as you are a healthcare in innovator, both in the US and in the EU.
Petter Aasa (15:39):
Absolutely, and I think the similarities are more so than you would think just at a first glance, but if we're looking at some of the main similarities, and I think they're coming or mainly at the core elements. I mean obviously the two markets have payers, providers, and patients all working or interacting with each other and in extremely complex ways in both markets. But if we're looking at the similarities, I think the similarities mainly are within the challenges in both markets. And that's that we see a shortage of nurses, a shortages of physicians in both markets. There's an aging population, growing prevalence of chronic diseases, and you would think that the EU or Europe would be more focused on prevention, but unfortunately it isn't. I think around 3% of the total healthcare spending in Europe or in Sweden at least, is focused on prevention. And I think that kind of mirrors what it's like in the US.
(16:43):
But if you're looking at the primary care markets specifically, I mean, that's some pretty big differences as well. When Sweden, it's basically, it's basically just capitation for the different primary care clinics. So obviously they have bigger incentives to provide better care at lower overall healthcare costs if they want to make some profits. So yeah, it's fun to having our feet in both markets. I think the EU serves for a very good purpose. In the beginning it's very good with government funded programs to help startups go from zero to something. And we're very good about building innovation or feeding innovation. But where Europe is lacking, or in Sweden specifically, is that we can take everyone from here to innovation, but we can't go from innovation to adaptation. It's very difficult to actually scale your innovative product within these different markets. And that's why I think we are, we're seeing a lot of these European based healthcare companies immigrating or at least expanding from Europe to the us.
Carrie Nixon (17:54):
Yeah, yeah, I mean think that's a super interesting perspective. In my experience, some of the barriers to innovation in the US are sometimes regulatory barriers. There's a lot of things you have to navigate and do and make sure i's are dotted and t's are crossed. Is the landscape, is the regulatory landscape similar in the EU that, and would you say that poses a barrier or more of a barrier here in the US?
Petter Aasa (18:32):
I would say there's always a much larger risk doing business in the US for several reasons. But regulatory wise, there are bigger hurdles of going live in the US with the FDA and all these different things. In the EU we have something similar. We have the CE markings as a medical device that you need to go through the MDR specific classifications and rules to uphold a certain standard to be called a medical device and CE mark as a medical device. But other than that, I would say it's much more lenient in Europe than it is in the US. Where Europe is much more stricter is when it comes to data protection. So the GDPR is much more strict than what we see in the US or under a HIPAA.
Carrie Nixon (19:26):
And the CE market is again sort of the equivalent to the FDA, a regulatory body, and FDA registration or FDA approval stamp here. And what we're starting to see, I think, is that companies are finding that the FDA is actually now maybe has some of the easier regulatory pathways, which was not the case previously. So that's sort of an interesting aspect as well. So let's talk a little bit more about preventive health. You know, are implementing these remote therapeutic monitoring codes. They're not technically preventive services, they're care management services. I suspect your long-term vision is to really see your platform as a driver of preventive health. What trends are you seeing that make you think that goal could become a reality?
Petter Aasa (20:28):
Yeah, it's a very good question and something that we're talking internally at least every week. Some of the trends that we're seeing, I mean, the global shift from reactive treatments to preventive healthcare or proactive treatments. And that's basically because some of the things that I listed earlier as well with some of the challenges in both the European and the US-based healthcare systems, we do have an aging population, growing prevalence of chronic diseases, rapidly increasing healthcare costs. In Sweden alone, I think 15 to 20% of the population accounts for over 80 to 85% of the total healthcare costs. So there are very big incentives in these markets to focus on prevention and to do so. But it's been extremely difficult to do and I am not so sure why. And that's hopefully a piece of the puzzle or something that we're trying to solve because we know that these different things, if we're looking at prevention and what you can actually start working with within prevention, we're looking at physical activity that Vitala is specializing in.
(21:40):
But then there's also the diet, it's sleep, alcohol and tobacco usage, how you manage stress and other of those areas. And we know that these variables account for over 90% of the total health determinants, whether a person is going to develop a chronic condition, and if they have developed a chronic condition, how well would they live with them? So if these variables account for over 90% of the health determinants, then why don't we focus more on them? That's a big question that we're trying to solve and that we want to make it possible. Obviously it comes down to the ways of working for these physicians and nurses and these providers. And we want Vitala to be a tool for them to start including these digital therapeutics to boost patient outcomes, to start focusing on prevention in order to obviously save a lot of money on the backside or in the end, but also providing better care for the patients and really putting the patients in the driver seats of their own health journey. And that's where we're seeing us today. We're obviously specializing in physical activity to be part of both the prevention of disease, but also in the treatment of diseases. But then who knows, hopefully we're able to show that this is, it's a good model for scaling as well. And then we have hopefully other digital therapeutics areas or other healthcare startups that can start working on those other variants or preventive prevention.
Carrie Nixon (23:03):
I mean, my suspicion is that we don't see more preventive care initiatives because again, it's not really compensated for, and it seems like it's not appropriately incentivized in countries in the EU either. In most cases. My hope is that this shift to value-based care where an ecosystem of providers and clinicians are compensated on keeping a patient population as healthy as they possibly can will we'll create some additional incentives to focus on preventive and that we be moving in that direction. But it's a huge sort of ocean liner to turn right. It's a big slow ship to turn, and we're only a little just, we're making slow process and getting there much slower than many of us would like to see.
Petter Aasa (24:08):
Yeah, no, I mean it is slow, but it's extremely exciting to be part of it and seeing everything happening in real time. And just earlier today was talking to someone that is running a outcome based fund basically, that they're helping companies that are outcomes based within, I mean, everything from a integration to society to education and healthcare as well. So there are things popping up every now and then or here and there. So I think it's a positive outcome for the future at least, even though it might take a little bit more time than what we're hoping for.
Carrie Nixon (24:45):
Yeah. Well, I am really looking forward to seeing how vital progresses through the market and hopefully brings some of that not only sort of care management, but emphasis on preventive care to providers here in the US. And before I let you go, I would love to hear your take on one piece of advice, one or more pieces of advice that you would give to a company who has already gotten some traction in the EU or overseas, otherwise, when they're coming into the US market.
Petter Aasa (25:23):
I would say, probably fitting for this podcast as well, I would say, find your right regulatory and compliance partners, because that is the hardest thing for a startup coming overseas to navigate through. And it's just massive amounts of time and energy and money that can be saved by finding the right partners within the areas that you're not an expert in yourself, or actually maybe not even just an expert, but far from your, you're novice within these different things because the healthcare system in the US is a jungle and it's extremely hard to navigate. So that would be my number one tip.
Carrie Nixon (26:02):
I mean, I can't say I don't like that. In fact, I like it a lot and I promise everyone I did not pay him to say that. You have it, ladies, gentlemen. All right. I think that's actually a great place to close out today's episode. Thanks so much, Petter for joining us, and we'll hope to talk to you again in the near future.
Petter Aasa (26:20):
Absolutely. Thank you very much for having me.
Carrie Nixon (26:22):
Alright. Till next time, see you on the next episode of Decoding Healthcare Renovation.
Announcer (26:29):
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