Tackling Mental Health With Happify Health’s Ofer Leidner

In this episode of TD Cowen’s FutureHealth Podcast Series, Ofer Leidner, Co-Founder and President of Happify Health, and Charles Rhyee, Health Care Technology Analyst discuss treating mental health with personalized digital therapeutics and its implications for treating chronic conditions. They also discuss how Happify’s intelligent healing platform uses gamification to engage users and effectuate behavior change.

Transcript

Speaker 1:

Welcome to Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.

Charles Rhyee:

Hello, my name is Charles Rhyee, Cowen’s Healthcare Technology analyst, and welcome to the Cowen Feature Health Podcast. Today’s podcast is part of our monthly series that continues Cowen’s efforts to bring together thought leaders, innovators, and investors, to discuss how the convergence of healthcare, technology and consumerism is changing the way we look at health, healthcare and the healthcare system. And in this episode, we’ll be discussing the increasing issue of mental health in this country and around the world, and the potential of digital to be a key part of the solution going forward. And to discuss the topic with me is Ofer Leidner, co-founder and president of Happify Health, a global software enabled healthcare platform that connects mental health with physical health. The Happify Health platform offers a full spectrum of solutions for customers and individuals, including wellness, AI based coaching community, as well as combination and standalone prescription digital therapeutics. Ofer, thanks to you for joining us today.

Ofer Leidner:

Hi Charles. Good afternoon. Thanks for having me. Delighted to be here.

Charles Rhyee:

To start, I want to talk about of mental health, which has been an issue for some time, but has only grown more so during this pandemic. Happify recently published an analysis quantifying the cost of individuals with unrecognized signs of depression. How big of an issue are we facing here?

Ofer Leidner:

So, Charles, I think that as much as these last couple of years have raised the awareness for mental health and have caused more people to raise their hand, experience what is characterized as a mental health challenge, our analysis shows that even a bigger problem exists with the unrecognized depression symptoms population. Those are essentially people that aren’t raising the hands and are walking around with all symptoms, suffering with depression, anxiety, chronic stress, and other mental health conditions, but aren’t getting the right treatment, are stepping forward for a lot of reasons. And our data shows that we are talking about one in five people, very similar to the number of diagnosed people. So, we’re talking about one in five. So, 20% of the population that is walking around with diagnosable mental health and getting diagnosed, but we have the same amount of population, slightly less, probably 17% of the population that is going with unrecognized symptoms of depression. What this mean that they show mild to severe depression on clinical assessments.

              And so, by all means if they would’ve been diagnosed, they would basically categorize as, with a diagnosis, but walking around without diagnosis has tremendous effect on the system. First of all, more people are suffering and are challenged by mental health issues. Second, the connection between mental health and physical health has a direct impact on the overall health outcomes of those people. And they tend to be even more expensive for the system. In fact, for those who are going unrecognized depression, they would carry 39% higher cost in their overall healthcare cost compared to those who are walking around with diagnosis and getting treated.

Charles Rhyee:

And when we think about that, what are some of these broader implications even beyond cost? When you’re talking about treating chronic conditions along with depression and anxiety.

Ofer Leidner:

Yeah. So, we can talk about specific health outcomes. We’ve been always at Happify very focused about, thinking about mental health in a broader context than just the primary indication. So stress, anxiety, depression, the episodic nature of mental health obviously has tremendous toll on individuals, on societies, on the healthcare system. But if you’re looking at the broader context whereby you know that there is a well documented, validated connection between physical health and mental health, you could see the impact. There’s one recent study that I’ve seen from Cleveland clinic that found that people that have signs of depression following heart attack were five times more likely to die within six months. So, imagine a person that had a heart attack, has depression and has not been diagnosed or recognized for their depression.

              They’re more likely to die from the physical condition. Mortality rate for those people when up from 3% to 17%. Those are people that the existence of depression going unrecognized untreated can cause significant deterioration and acceleration of physical diseases. And that is something that I think is kind of not often kind of dressed, or brought to the main awareness of that cohort of unrecognized depressive symptom population. One of the things that we have looked in this study that we published, we’ve looked at the, and tried to assess how large this group is, understand the impact of that kind of unrecognized depression on their direct healthcare costs, and then understand persistent unrecognized depression among people with different chronic conditions. Where is this problem most significant? And in terms of the direct cost aspect, we found out that an individual with unrecognized symptoms of depression would have an average cost for the system of about $10,000 in direct healthcare cost.

              And if you are recognized, the cost’s still going to be higher than if you have no depressive symptoms, it would be $7,500 on average direct cost. So, we’re talking about 38% more expensive individual from a pure healthcare cost. Now, when you apply that into the suffering, where you apply that into the impact on the physiological connection between the mind and body, we think this is a pretty serious effect that needs to be addressed. I know, again, in the pandemic, we were very lucky to kind of highlight that they need to better mental health support and address a lot of issues around stigma, access, convenience of care and address some of the shortage in providers. But we have as great and as significant problem with unrecognized depression, those are people walking around in our, among us, next to us, and they’re suffering, and they carry all the effects, they just haven’t been identified and aren’t treated. And that’s an impact on the system.

Charles Rhyee:

Ofer, you don’t come from a healthcare background. How did you find yourself coming to try to tackle this disconnect between mental and physical health?

Ofer Leidner:

Yeah, so I kind of, so I’ve been on a journey with Happify for the past nine years. Came to healthcare as one of the earlier kind of digital guys that was kind of interested in trying to take and apply what I’ve learned in the digital world and bringing into healthcare, more specifically, I’ve spent with my co-founding partner for Happify, about eight years prior, building a fairly large casual games company. For those who aren’t familiar with, casual games are those small simple games that simply drive through persuasive design, through behavior, change models behaviors, and often those behaviors in gaming leads to excessive use. Those mechanism of action may lead eventually to addiction. It’s simply a highly optimized behavior change looks that are designed to drive a sense of pleasure. Mechanism of action that drive dopamine infusion, and then you’re kind of hooked to your screen.

              We’ve done that at scale in our previous company over 60 million month uniques on the platform. But then I realized that they’re probably not the best use of my time and the talent that we’ve built in kind of creating those experiences, and really try to identify an industry where we thought that if we could only take some of the level of engagement that we’re able to drive in that kind of gaming experience, platform that we built, and apply and help those individuals that spent enormous amount of time with us. By the way, at the time, I remember looking prior to a board meeting, we kind of calculated and found that people spent on our platform about 21 billion hours a year. If you divided by number of unique users, it was 14 days per year per gamer on this platform. And we basically said, “Hey, if I can get people to come and interact with our platform for eight years, for eight times a day, maybe there’s a better way to apply those skills and drive people towards healthier behaviors and just kind of entertainment value.”

              Nothing wrong with the gaming industry, it’s great industry, but we thought that we can take some of those principles of engagement design, behavior change, and try to marry it with evidence based science and create experience that change healthcare on a digital platform and doing it at scale. The idea of focusing on mental health was really kind of came again from being an outsider and thinking about what would be the best way to engage the broader based population. And the insight that we had there is that, like it or not at any given time, most of us will experience depressive symptoms at some point in our lives. Most of us would just experience episodic experience. So, you could get overstressed, you could get anxious, you could get depressed episodically, but if I’m looking for a way to engage the broadest base population into healthcare, mental health wouldn’t be a bad place to start.

              So, that was the origin of why mental health. And then I would say that I’ve long been kind of fascinated by the clinical evidence and connection between mental state and physical health. In some practice of medicine, Eastern medicine, this has been a well known linkage for 1500 years. In the Western medicine, maybe less of. But I think that today, the mechanism of actions that make the connection between your mental state and your physical physiological kind of response to stress, anxiety, depression are so clear and validated.

              Ultimately the insight that we had from a clinical care point of view was to use the central nervous system that essentially regulates through the two nervous systems, the body, the physiological system, the emotional system, into state of homeostasis. And by applying behavioral interventions, you could actually see results on physiological endpoint. So, some things that are pretty kind of well known and obvious, if you are stressed and have an autoimmune response, skin disorders, you will see greater level of flare ups. If you are dealing with inflammatory conditions, cardiovascular conditions, autoimmune diseases, you could actually apply that mechanism of action. And that to me was a much broader way of thinking about mental health. Significant importance to treat it as a primary indication, too many people walking around suffering, we can help them with various types of evidence based practices, but if you really want to make then the impact, you have to go broader in, at least in our mind than just treating the mental health as a single [crosstalk 00:13:34].

Charles Rhyee:

Yeah. So, then maybe, it’s a great segue here to jump into and see, maybe you can give us a brief overview of Happify’s core offerings and then how they link together.

Ofer Leidner:

Yeah, sure. So, we’re kind of, over the years have built what we like to call today, intelligent healing platform. Essentially we’ve built a stack of software services that enable us to drive patients through those services in a patient-centric approach. So, we build set of services that drive engagement through wellness solution, so evidence based intervention that we are able to attract people onto this experience. We then build Anna, which is an AI engine that allows us to really help patients navigate through health condition. Anna is trained in supporting people through a clinical protocol with understanding of an ability to converse, to understand what would be the next best step for that individual, that is Anna. Anna is trained to support patients with MS, trying to support patient with mental health. We have a very interesting patent on this technology about adherence, fidelity, understanding psychological traits that will give us indication if an individual is adhering to specific modality versus another. Next, we built Care Journey Solutions, we call it Kopa.

              This is essentially a platform that enables us to intelligently engage and help patients navigate through their care journey. Kopa is a platform, I like to think about what Kopa is to healthcare is what Expedia is to travel, everything that a patient needs in one place. What I couldn’t understand coming to healthcare from the world that I came from is, how did we create a very siloed point solution reach type of environment, but never stop to think about the patient experience and how can we actually put in front of the individual the right thing that they need at that given time that might be interaction with other members in the community that are going through similar situation, that might be interaction with clinicians, HCPs, that might be behavioral interventions, that might be content and information that helps with the help of machine learning optimize towards where people are in their journey, and then where they’re going and where do we want them to go?

              And then last but not least is our Digital Therapeutics Offering. We have built on this platform an array of solutions that are all taking the same clinical mechanism of action. Let’s intervene with behavioral interventions and look at endpoints that are both mental and physical and secondary endpoints. And we’re able to build those products and essentially address specific disease areas on an end to end platform. The core principles of this approach is what we call the precision care or precision engine, which basically speaks about the need to drive patients with much more real time information about where they are in the journey and what is the best action for them to take. So, we can own this platform, create the journeys around specific disease areas and drive people through this vision of intelligent engagement, connectivity to services and softwares medicine digital therapeutics.

Charles Rhyee:

You’ve reported that your evidence based behavior change platform can lead to a 25% reduction in symptoms of anxiety and depression. Given the pieces that you just talked about, can you give us an example of how somebody coming on to the Happify platform would kind of touch sort of each of these points, maybe somebody with psoriasis. How does somebody experience this?

Ofer Leidner:

Yeah, so, let’s take the example of psoriasis as an example, because that’s kind of a journey that is very much sitting in that category of therapeutic areas, which sits fair and square within where we think we can drive a lot of value. So, for those of you, aren’t familiar with psoriasis, it’s autoimmune disorder characterized by skin disorder. And typically because of this consistent need to deal with skin disorders, there’s social anxiety and over time you would see depression. The journey of patients with psoriasis is typically long and characterized by having to switch between therapies every few years, they begin with over the counter creams, they will then go into prescribed creams. Then typically would go into light therapy, and eventually will get into the stage of biologics, which try to support the disease by kind of suppressing mechanisms in the immune system that attack the skin and create the disorder.

              One of the key linkages among this particular disease is the fact that stress and anxiety actually elevates the autoimmune response of the body, which will end up being with elevated skin disorder and flareups. So, ultimately, the way we designed the experience, we decided to go and create a first in kind, first in market. And today the leading psoriasis care platform, and it’s kind of broader than psoriasis, it’s dermatology. But ultimately a patient that deals with that disease would be able to find Kopa for psoriasis. They will find it in various channels and in various ways where we market this offering. They would be able to go on this platform. As we onboard those patients, we would really get a very good view towards where they are in their journey. How long have they been with the disease?

              Are they treated by PCP or are they treated by dermatologist? What is the severity level of their disease? What type of treatment stage they are on and how aware they are of the different solutions they have. And with that set of information, we can really start personalizing their journey in supporting their disease. So, for example, if we determine that individual is falling in the moderate to severe category in this journey, but they still getting treated by their PCP, that is likely an off protocol treatment, the outcome is going to be suboptimal for that individual. So, we can then based on that kind of knowledge of the care protocol, understanding of where people are on this platform, can start tailoring along this journey, different types of activities and modalities. Activities may be a decision that will be made by a machine learning engine that is very sophisticated.

              Hey, the first thing that we want to do with that individual is help them understand that there are other patients that are going through the same exact experience. Let’s surface an interaction with patients in the same journey. Another behavior could be, let’s kind of provide content and educate people about the availability of different therapies along this journey. They could be interacting on this platform with dermatologists, certified dermatologists that may provide them guidance or answer to questions. Those dermatologists aren’t prescribing, they’re not providing specific medical advice, but often the case and in our kind of desire to remove barriers to getting healthcare and advanced people in their care, we thought that kind of allowing people to log and get a free access to be able to ask dermatologists a question would not be a bad way to engage people into taking care of their need.

              Another good example. Many people drop off the journey that they have in their disease management because they lose hope. They basically have switched many, many therapies, nothing really worked for them. They haven’t found the right thing, and they basically lose hope that their situation can be improved. And that causes suboptimal kind of outcome. They’re not managed, their psoriasis can get more severe and advanced. And maybe with that individual, we may want to kind of help weave in behavioral intervention that help them drive sense of optimism, help them drive self-efficacy, which is a major, major kind of theme in how we thinking about healthcare. It needs to be a patient led healthcare. So, why don’t we weave in behavioral intervention to help? That is kind of the algorithm that constantly run and looks for the best care options for individual. And we’ve been, yeah, sorry. You had a question.

Charles Rhyee:

Oh, I just wanted to ask you, in this example, you’re saying if a patient is moderate to severe, this is a self-reported diagnosis. That the patient is identifying that their psoriasis is moderate to severe. You mentioned that perhaps if they’re just still seeing a PCP, that’s a suboptimal outcome for them or suboptimal care for them. You talked about providing access to maybe dermatologists to provide some advice. Are you able to help guide them or direct them, particularly for maybe employer customers to help recommend specialist care that this member probably could benefit from more advanced care?

Ofer Leidner:

Yeah. So, the way we kind of, advanced people on this kind of care journey, so I described example of how this care journey protocol works. But obviously the next phase of that is connectivity to different service providers. We do not provide the services ourselves. We do provide the software as medicine application. So, for example, if we are interested in improving the mental health of that individual with psoriasis while helping them reduce flareups, because their stress level will go down, that will be a software solution that will be part of that, we call them sequences. Those are these end to end digital care framework. But what’s important in the way we deploy those solutions, we deploy them in partnership with ecosystem participants. And those ecosystem participants could be employers, could be health plans, could be pharma companies. What we want to do is to take that highly engaging and sophisticated framework that we’ve built, and algorithms that help us drive care, and connect it into existing care that is enabled for individuals based on their eligibility, based on their services.

              So, for example, if we would work with a health plan, they have pretty good access on the health plan side into e-network dermatologists and services, we would authenticate that individual as a member of eligible network, and then offer them the services. All that we actually do here, I’m saying all because the impact of doing it right is just pretty, pretty impressive. But all that we’re doing here is kind of using a highly engaging framework and data that helps us understand where people are. One of the problem in healthcare is that the data that we actually often operate and take actions on, is just an aged data. It sits in the EMR, it’s episodic data. And what we’re doing with this kind of set of digital platforms that are connected in driving patient behaviors is just feeding off near real time data that is often the most actionable data.

              So, for example, on that psoriasis journey that I’ve described to you, while patients self-report their condition, there are pretty standard kind of assessment to understand and evaluate the severity level of the disease. What percentage of your body is covered? Where are the areas of psoriasis that you covered? Those are things that essentially can be captured pretty effectively through patient reported data. And then this platform is also in kind of… Other instances is connected into claims data and things that allow us to actually take the best that we know on the patients from the EMR with explicit consent, match it with another layer of data that is created by the patient with consent and trust, and then act on this data and advance and improve care. We are really kind of thinking about what we’re doing as a system, rather than a point solution, rather than a point platform. This is an open API platform. So, we often would have solutions that are not provided by Happify, but right so, for their own rights provide great solution in specific disease areas or therapies that we’re involved in.

Charles Rhyee:

Maybe talk about, right? Because I think at the core of a lot of what you are providing, right? Is the behavioral intervention, right? In support of the, any of these kind of chronic conditions that somebody might be suffering from, psoriasis being example. Talk a little bit more about the behavioral intervention part that you are providing. What does that kind of entail? How long is a course of therapy? And I know that currently your solutions are over the counter, but you’re also trying to, you have a developing pipeline for prescription digital therapeutics, so PDTs, maybe talk about your strategy in this regard.

Ofer Leidner:

Yeah. So, on the therapeutic side, because of the way we kind of wrote and built this platform, we have the ability to develop products with different clinical rigor and claims that we’re going after. And each of those require different kind of configuration and different validation. But on this platform, we can develop what we call enforcement dispersion products, which essentially are used to manage symptoms. So, that’s the claim level. It’s still, you need to develop it on QMS. You need to be compliant with all the requirements of the regulator, but you are not required to submit for clearance. And in this category, we basically work on solutions in disease areas. This typically the first step that we taking in a category. From there, we are kind of, as we see the category of digital therapeutics evolve, we do think that prescribed digital therapeutics is an interesting category.

              The category is still forming. There are still barriers that needs to be addressed, but we are very bullish on software as medicine, as a category. And then the question is, do you go prescribe therapeutics first? Which basically means you have to work through reimbursements, you have to work through physician education. We think that this could take time. So, our approach is yes, we have products that we built into this category, those are product that essentially have treatment claims. One of the products that we’ve announced in this category is ensemble, which is the first of its kind, trans diagnostic product, which has label that calls for improvement for treatment of MDD, major depressive disorder in GAD, which is the general anxiety disorder. Those products basically go through are built on a similar platform, but go through different kind of clinical validation, clinical trial then enforcement discretion, management of symptoms.

              We think that the way we kind of approach this is a portfolio of therapeutics. And in some categories we will go non-prescribed enforcement discretion. In some categories we go prescribed. When you build the platform the way we have built it, you have the flexibility to develop products to address those different needs. I can tell you that the work that we’re doing with our payer customers, work that we’re doing with pharma, typically start with enforcement discretion and then can lead into other higher claims categories. But both products fall in the MLR. So, the only difference is kind of, what type of channel you bring this to the market, and what type of reimbursement model you work towards?

Charles Rhyee:

Yeah. And then when we think about the behavioral intervention that you guys are providing, there’s others in the space, right? Treating other areas, right? But kind of using kind of tenants of, so far we’ve seen largely around cognitive behavioral therapy. Is this something that you guys are employing within your behavioral interventions or are there other kind of types of methods that you’re employing?

Ofer Leidner:

Yeah. So, we are, basically our approach in kind of applying the science and the clinical interventions, we are taking eight different care modalities, CBC’s primary mindfulness activation therapy. The principle has to be, it is clinically validated, Meta analyzed, used by clinicians in the field. We are not in the business of inventing science. There are companies that are trying to invent and validate interventions. We are in the translation of validated science. Our expertise is taking that translation and do it in a way that engages patients on those therapies for the required time, which as you know, in digital health, 90% of the applications in the market was not withhold 30 days retention at 5%. So, we worked for many, many years to apply what we’ve learned in gaming and engagement design into applications that sustain very long retention curves.

              Our months 30 retention rate on this platform is at 37%. I’m sorry, months 24, so two years retention is 37% retention. Three years retention rate, those are the long cohorts that we have are 30%. That’s where the curve flattens pretty much. And those are our best in class internet grade retention rates applied into clinical protocols. What this allows you to do is really kind of start thinking about longitudinal care, treatment of episode versus maintenance, and more informed form of care that is done because you have that engagement.

              When I came to healthcare, I wanted to solve three problems. I wanted to bring the level of engagement as we’re engaging with other digital technologies into healthcare. I wanted to help design a better system than a system that is essentially closed loop point solution, which would eventually implode with too many of those solutions under utilized, not coordinating a better care. And that’s the second problem. And the third is the software as medicine, not for everything, not for all, but there’s a growing number of conditions and populations that you can actually provide very decent digital care with products that would help unlock the provider demand challenge. This isn’t getting better. The needs is growing on the system, we’ve got to figure out a way to scale healthcare with software when possible.

Charles Rhyee:

Yeah. You touched on the engagement metrics that you just provided. Maybe talk a little bit more about how you are engaging, and maybe I’m simplifying it. I think a lot of people use the term gamification as a method of activating and engaging members or patients here. Maybe I’m over simplifying in the case of Happify, but maybe talk about, how are you maintaining this level of engagement? What are some of the tools that you use to keep people continue to use your products?

Ofer Leidner:

Yeah, so, that’s something that we could probably spend the week talking about in a different settings, because that has been a passion in this company. But basically coming from the gaming industry, where we literal optimize for having people coming eight times a day to our application, because we knew that within 30 days they’re gone onto their next experience. We actually needed to work in a different way here. We first needed to understand what are the engagement mechanism that may have been very very successful in gaming but have no place in healthcare? So, for example, competitive mechanism, very relevant for gaming, completely irrelevant and would discourage people from taking care of their healthcare. So, this is a mechanism that we actually had to tune down. Another question that we asked ourselves early in the journey, are we talking about immersive experiences within game, or are we talking about mechanics that drive engagement and reward people for behaviors?

              We concluded that the latter is the right approach if we don’t want to take the risk on a hit driven nature that immersive experience has. And we kind of kept those into interventions that we limit our risk on the game design onto specific interventions, not on the system. The other very important thing is a lot of people think about engagement as a simple way to nudge people enough time so they come to the site. And the reality is that people get fatigued, tired, and eventually shut you down. If you do it without kind of thoughtful methodology of how, why, and when. And ultimately one of the key principle that has often been overlooked in our mind is the correct exchange between information that is given to you by the user and the value that they see immediately on the platform.

              So, we all talk about in gaming, power apps and rewards. How do we translate those in principle from gaming into healthcare while maintaining the clinical protocol? So, for example, I need some information that helps me engage people into their care, but I don’t need it all. This is not a data collection exercise. I’ve seen so many designs that just kind of, you look at it and you say, this would never work, people would never give you that information when they onboard the experience, that’s one. So, the individual gave me some information, how do I immediately turn this information into something that provides value and easy to engage with? Principle of gaming, right? Easy to engage with, hard to master. So, the easy to engage with, we need to put in front of the individual, the first intervention that we know in high likelihood that they would adhere to, and that would start driving value.

              What is the value is, I feel better. What is the value? I got valuable information, something that I didn’t know before. All of those kind of principles. And I just gave you a few of those kind of consideration translated into years and years of experience that was built onto the platform, and then tedious optimization. I always like to tell people, you need to know everything that there is to know about this, implement it correctly, test it correctly, and then have some luck and kind of just see that it’s working.

              There’s no shortcuts here. It’s a complex task. And gladly, we were able to achieve those over time, interaction with millions of users, interaction with users across different cohorts. So, we have solutions that are provided to commercial population, we have solution that we worked for years to validate with cared population, the elderlies. Preconceived notion, older people do not engage with digital solutions, wrong assumption. They engage with it, but they need certain things that we would otherwise see younger population engage primarily through the apps. They use mostly web applications, how to engage Medicaid population, which has a tremendous challenge around trust in the system, access to the system? This is the knowledge that we brought in and kind of applied it systematically onto the framework that we’re working around.

Charles Rhyee:

Yeah. That’s really interesting. And certainly it looks like you’ve done a lot in this regard. As we’re kind of coming up, maybe towards the end here, you’ve touched on it a couple times where you see software as a medicine. And we’ve talked a little bit about prescription digital therapeutics. Certainly not for everything, but it sounds like there… It does look like there’s a growing number of conditions where digital and software can be a meaningful intervention to either support or even modify these disease progression here.

              So, where do you see this going then? What do you see happening in the next five to 10 years? You talked about some of the structural challenges that probably need to get resolved. I mean, is this something that you see happening within the next five years, or do you think this is going to take a really long time? Are we looking 10 years and beyond? Maybe put your prognosticator hat on a little bit and, how do you see things playing out over the next, for several years?

Ofer Leidner:

Yeah. So, I think the, one of the things that I’ve learned coming to healthcare after nearly the first decade is that the drive innovation typically takes 10 years from the moment you start. If you look at telemedicine, if you look at EMRs. And the curves typically kind of, in 10 years you got decent penetration. So, you need to be patient and realize that it takes time to drive innovation through a system that is generally misaligned and has a lot of challenges to solve. When it comes to the prescription digital therapeutics, I think that the, looking at the last couple of years, definitely seeing improvement in the kind of regulatory pathway, there’s clarity about, what do you need to do to clear a product?

              You see it with the FDA, you see it in other markets, the DiGA program in Germany, definitely you start getting a better clarity on the regulatory pathways to achieve what you need. Where I think we still have a way to go is convincing health plans that software is a medicine and therefore should not be treated in a more strict way than medications are, kind of evaluated for efficacy in the market. So, there’s way to work there. I think there’s progress. It’s a bidirectional learning experience because as payers become clear about what they need to see from companies to reimburse, companies learn how to design the evidence that they’re generating in a better way. And then the last place which I think still requires work is the physician adoption. As you know, physicians are conservative by the view, they should. Physician adoption is going to take time. I think that the prescribed digital therapeutics probably in the next five years would work through those issues.

              And by that time, we’re going to start seeing portfolio of products that are really providing the answer to unmet needs, the clinical evidence, the value evidence and distribution models. So, I think that is a category that is here to stay. It represents tremendous opportunity. It will take time. We are kind of, because of the way we’ve built our platform, think that we do not need to bet the firm on a single kind of pathways with prescribed digital therapeutics. There are other ways to drive value from those in… And get reimbursed, not through the kind of reimbursement. Ultimately, if we provide clinical value and HUR value to a payer and they decide to contract with us directly, and sponsor their [poculation 00:45:31] for kind of therapeutics, this is a viable path for us and others are doing it with employer channels.

              There are going to be multiple paths of reimbursement, but I think that for this category to fulfill on its promise, we need to kind of continue to work as an industry and collaborate and learn from each other, companies among themselves, companies and stakeholders in the category. But anyone that is bet on software to drive greater value in as medicine and in healthcare, is in my mind betting on something that is going… Again, something that is unavoidable. Software will support clinical outcomes. Software will support better behaviors, it has been proven, it has been done. It’s now making its way through adoption in the industry.

Charles Rhyee:

Great. And I think with that, that’s a great way to end it. Ofer, really enjoyed this conversation, and I really appreciate the time you spent with us today. Looking forward to seeing the progress that Happify makes and really want to thank you for spending time with us.

Ofer Leidner:

Yeah. Thank you, Charles. Great to be here. I appreciate the time, enjoyed the conversation as well.

Charles Rhyee:

Great. And thanks everyone for listening in and hope you check us out on future podcasts. Thank you.

Speaker 1:

Thanks for joining us. Stay tuned for the next episode of Cowen Insights.

---