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No. of Recommendations: 63
Ever since I heard of this company something tweaked my BS detector, so I decided to do a little digging around today to see if all the hype is justified or if my spider senses may be onto something. As you can tell from my subject line, I wouldn't touch this company. In fact, if I shorted stocks I'd short it.

Below is text from Livongo's About Page.

The bold are my BS triggers which I'll discuss briefly below...

Livongo offers a whole person platform that empowers people with chronic conditions to live better and healthier lives, beginning with diabetes and now including hypertension, weight management, diabetes prevention, and behavioral health. Livongo pioneered the new category of Applied Health Signals to silence Noisy Healthcare. Our team of data scientists aggregate and interpret substantial amounts of health data and information to create actionable, personalized and timely health signals. The Livongo approach delivers better clinical and financial outcomes while creating a different and better experience for people with chronic conditions.

What exactly is a whole person platform? The term is laughable.

Not really even sure "behavioral health" is a term with any actual meaning. Is there anyone left on planet Earth who doesn't know we should sleep 8 hours, drink water, eat lean proteins, veggies, work out and spend time in nature? In a video on their site they talk about treating the whole person and mention that they could be dealing with "socio-economic" factors. So if a person is out of work, has marital difficulties and lives in a high crime area with limited health resources, the Livongo "whole person platform" does exactly what?

They do "weight management?" They're Weight Watchers? Jenny Craig? Peloton? Joe Rogan Podcast? Is there an industry more rife with nonsense and outright fraud than weight loss? Eat less and move your fat bottom and you'll be healthier. There I just practiced behavior modification in the health care space.

They silence noisy health care to create timely health signals? So presumably if you fail to take your meds, you get a "nudge" or the like reminding you to take them. Fine. Sounds reasonable enough.

But the CEO and founder talk a big game that makes them sound like the Stitch Fix of health care, where the magic formula is to combine incredible amounts of data with a human touch. So if a patient feels chubby and just ate a pizza instead of a salad and bungled their health scores by forgetting to take their meds, they call a Livongo health pro? How many times do they talk to the pro? How dedicated is each pro to each individual? And how the heck does Livongo scale this without breaking the bank? Anyone who has ever tried to start - and stick to - a diet/exercise plan knows how hard this is. What exactly does the helpline/coaching staff do?

*** ***

Maybe you think I'm just being too hard on them. Okay, well here's a site that's committed to shining a light on the nonsense of the "Wellness" industry...

Are Livongo's Outcomes Real?
https://dismgmt.wordpress.com/2019/08/26/are-livongos-outcom...

The article questions a study Livongo cites...

By way of background, this study was conducted by Livongo’s employees, along with employees of its partnered diabetes supply company (Eli Lilly), which also funded the study. So there couldn’t possibly have been any conflict of interest, right? Right?

It was published in something called the Journal of Medical Economics (JME). And no, I hadn’t heard of this publication either. Turns out it’s an “open-access” journal offering “accelerated publication,” with an Impact Factor of 1.9.

Not familiar with the concept of Impact Factors? Those measure the influence of a publication. For instance, the New England Journal of Medicine tallies a 70.8. How hard is it to only get a 1.9?


Ouch.

*** ***

Below is an article from the Validation Institute. Here's a bit about their mission..

Performance validation makes it as easy as possible for health care purchasers to have confidence in the vendor partners and providers they choose to work with. Our attention to detail helps vendors sell smarter and purchasers buy with confidence.

The Livongo Study, as Interpreted by a CORA Pro

CORA stands for Certified Outcomes Report Analysis - if you become a CORA pro, the idea is you are better able appraise the validity of these studies we always hear so much about despite knowing nothing about what they actually did.

https://validationinstitute.com/the-livongo-study-cora-pro-i...

This article, in combination with the one above, implies that Livongo has an aggressive sales division which incentivizes companies to badger employees into signing up and then pushes more testing than is necessary.

*** ***

To be clear. I don't work in healthcare, am not especially familiar with Livongo and I realize they are growing like mad and it's possible these doubts are over-stated. But I wouldn't touch this company with a ten-foot pole when there are so many less complicated, more legit (Muji backed) companies, telling simpler stories. CrowdStrike sells software to stop hackers. Hackers are indisputably real and coming after virtually ever site on Earth. Simple, clear, authentic.

I don't doubt Livongo's ability to sell to companies and jack revenue for now and maybe in the next few years. I doubt their ability to help masses of people actually improve their behavior. Modifying human behavior is incredibly difficult. Shockingly so. For example, I listened to the founder of Duck Duck Go on the Invest Like the Best podcast and thought it a no-brainer to have more privacy in my searches. But til I actually downloaded the app and started using it took forever. And it was literally the easiest thing to do in the world.

Assuming - as I do - the articles cited above raise legit questions, what we have here is a company making questionable claims, operating in a space (behavior modification) that has failed miserably before and one that is based on a narrative of applying its methods to weight loss, hypertension, etc, etc. This story feels like such absolute BS to me - we're gonna help people with diabetes and THEN the sky's the limit! Hypertension, weight loss, etc. Give me f'n break. I have a close friend with diabetes and have watched him for years need to closely monitor his glucose or risk fainting, losing his vision and worse. So he MUST tend to this condition closely. For this type of condition I can see a massive need to closely monitor his actions. I have no clue if Livongo has a better mouse trap than his current methods. But if it's just diabetes that is no guarantee whatsoever their "whole person platform" works for anything else.

If you're long LVGO know it's unpleasant to hear someone call your baby ugly but the euphoria on this stock seems misguided and I think with social media, stock message boards here we are always in danger of over-amplifying our own positive biases. I do it all the time rooting for my stocks.

Bottom line - what we have here is a complex story that requires faith in something totally unproven. All their massive revenue growth has proven is they can sell the story to companies/orgs that are looking to save money on health care costs. That these orgs will see real deep $ benefits is questionable at best.

It makes absolutely no sense to me to be invested in a company whose core claims are utterly unproven compared to Fastly, Zoom, Crowdstrike, Okta and DataDog who provide products/services that are highly rated by our own techies, orgs like Gartner and even used by the Fool.

Not sure when, but I think Livongo is going to get shellacked. My guess is they continue selling the service and leaders will crow about the unlimited growth to come. But eventually word will come out that there's no major benefit from using their service. And on a future ER call they'll miss earnings, talk about losing some big customers and the bottom will absolutely drop out. Normally I do not put a lot of faith in gleaning anything from insider sales. But on this one I'd watch it like a hawk because no doubt the big insiders won't be the ones to lose their behinds if it tanks. It will be the same suckers who loaded up on Groupon when that blivid was allegedly going to replace Amazon.

Fool On,

BroadwayDan
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No. of Recommendations: 41
Do you know any type 1 diabetics. My sister was one. She likened it to being on a greased slide and holding oneself in place by gripping the sides. Any loosening of grip and one went farther down, hopefully stopping before one went off the end. She was a intelligent woman, but the latter part of her life she was making regular trips to the ER in an ambulance in a coma. Often, it was pure chance that someone found her in time.

Having something monitoring all of that can make quite a difference since the diabetic can often be unaware that things are not what they should be.
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No. of Recommendations: 18
Bottom line - what we have here is a complex story that requires faith in something totally unproven. All their massive revenue growth has proven is they can sell the story to companies/orgs that are looking to save money on health care costs. That these orgs will see real deep $ benefits is questionable at best.

This implies that the excellent financial results thus far are perhaps ephemeral and will disappear as soon as folks realize there are no tangible reproducible benefits. However its been reported that clients of Livongo which include insurers and health service organizations see an average annual gross medical savings of about $2000 per diabetes participant. (Various TMF articles)Are you suggesting that this is false.?

Cheers

draj
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No. of Recommendations: 3
Dan,

I can totally respect the bear case here. Humans, especially, Americans in general, have a really hard time changing any habits. Most bad habits are especially hard (smoking, overeating, etc.) because they are either addictive, fun, social events, what-have-you. However, I am willing to take a small, <1% position and watch it play out. Obviously, the stock itself is performing wonderfully at the moment.

I really hope the company can come through with their promises and provide a better and healthier life for those with some of these chronic illnesses. I'd like to think that's a better option than just ignoring the chance to help people out.

I really hope it's not all B.S., but it surely could be.

Thanks for the post.

rj
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No. of Recommendations: 6
Hey Dan, I brought up the concerns highlighted by the Validation Institute in January and it garnered quite a few responses.

I suggest anyone planning to respond here first read that thread. Here's the link to my post.

https://boards.fool.com/after-reading-this-thread-bert39s-ar...

Long LVGO (recently grown to top position)
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No. of Recommendations: 10
Let me start by saying I'm long LVGO and it's my largest holding. I've owned it since $25. So I'm biased. I will also say that even though it's my largest holding I don't have super high conviction on it. It has only become my largest because it's quadrupled in 6 months and I was lucky enogh to be talked into taking a big starting position by someone that knows health care very well. I have been selling covered calls on it to lock it some gains because I do have some concerns - mostly about competition/moat (but let's not go down that rabbit trail again....)


In response to the points by Dan:
- There have been very few insider sales - VERY FEW. Look at LVGO insider sales compared to any other SaaS company and you will see exactly what I mean. I fully expect them to start selling soon - and they should - they have earned it. I would not make any conclusions on sales if they start coming.

- The company states that they have a Net Promoter Score of +64. From the following website, an average NPS is +32. https://www.surveymonkey.com/curiosity/what-is-a-good-net-pr.... I don't know how reliable this measurement is, but it sounds like their customers like them.

- For diabetes, they do more than what you have described. They have on-demand coaching and they provide free glucose meter test strips that are automatically mailed to the patient. This is not hard to do, but no one else is doing it. It saves the patient money and hassle.

- They have been growing 100%+ every quarter for a couple years. The growth is coming from large insurance companies and some of the largest businesses. Those buyers are not dumb.


I personally would not put large sums into LVGO at $100 per share (when to buy...another rabbit trail we don't need to go down). I'm still holding a very large position - but I am selling some out of the money calls to get a little $ out (just in case it retreats or pauses).
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No. of Recommendations: 3
Hey All - sorry I missed that others posted on the Validation article.

I really don't have anything to add here. I realize how serious healthcare is and that it's a great thing if they've found a way to improve and modify our behavior. I just don't believe it based on the language they use, the doubts raised about their studies and the idea that they can target weight loss, hypertension and other conditions.

I will just say that I think Saul has an intuitive sense for what makes a clean narrative vs these more complex stories that require unproven things to happen. To be honest this thinking has caused me to reduce my position in TTD, a stock I love, as the fact is programmatic ads are a theory that's yet to be proven. We don't know that some ads will be targeted with great precision and deliver incredible results. We know that companies need to verify identify of everyone who logs on.

Why invest in what might be when we have what is?

As always, let's not make too long a thread unless someone has something key to add.

Good luck to all!
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No. of Recommendations: 7
I work in medicine, looked at livongo awhile ago and passed.

I'm just not sure what their special sauce is. I don't quite understand how they actually provide any patient benefit. Proprietary blend of.... What exactly? What can they do that a primary care doc can't? Send diabetic test strips?

I think LVGO is honestly a money grab and good marketing.

Then again, the same can be said of robotic surgery (looking at you ISRG)- doesn't really add much to patient outcomes, but those with disposable income go to hospitals that advertise robotics and bring their associated high margin business.

I struggle to see how livongo doesn't go the way of Fitbit.
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No. of Recommendations: 16
The game in investing is making money. And LVGO stockholders have been right. So far. Despite the fuzzy language that Livongo uses to promote themselves.

Diabetes is a medical problem poorly served by existing solutions. Compliance is always hard to come by in chronic conditions , but that is especially true in brittle diabetics who are always riding a roller coster. Too much ,too little. All in the same day. Constant attention, hard to do for many. And certainly something they can not get from traditional sources. They wind up in the ER often,which is very expensive for insurers . One ER visit probably costs what years of LVGO service costs,so LVGO only needs to make a slight improvement to be worth the cost. That low bar is an important point to keep in mind.
I wonder if AI will show patterns not obvious to health to providers or patients.
I suspect LVGO nudges can be helpful to some diabetics. Especially type 1. TYpe 2 is mostly about being way overweight a difficult problem itself, we are hard-wired to eat when we can.
I am a lot less sure about its usefulness in other conditions. I own some LVGO but not with high confidence. But since the big danger on these board is group think I appreciate your input.
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No. of Recommendations: 8
another point- as diabetics get older they are more and more likely to have periods when other illnesses or injuries prevent them from managing their own condition . Others, usually family members ,will have to do it and they will need all the help they can get.
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No. of Recommendations: 94
Hi BroadwayDan,

You likely made some good points....but some of your post is demonstrably wrong.

If you type 'Livongo' into PubMed (the NIH funded search engine for medical and biological research....and the best tool for finding academic articles in those fields) you find 30 results:
https://pubmed.ncbi.nlm.nih.gov/?term=livongo

The first article is in Journal of Medical Internet Research (impact factor 4.9) which specializes in health informatics and health services research. Many of the others are also in similarly decent journals.

Skimming the list, and reading a few, it's clear that there have been a series of research efforts addressing a range of topics (diabetes outcomes, diabetes cost, weight loss, etc.). Some of the papers I read were authored by Livongo employees in collaboration with researchers at Stanford,Duke, etc., and others did not have any obvious Livongo employee participation. As the performance of CGMs improves, and presumably Livongo's software, it makes sense to keep researching the efficacy of their products.

So your assertion that their research is perched on two weak papers is simply not true.

As to why a 'whole' person matters.....Type 1 diabetes is an incredibly complex disease. Depression, triggered by T1D is very common. Weight has a very significant impact on your odds of getting T2D and on your ability to control it. Buzzwords may really push your buttons....but there is substance there as well as hype.

My son was recently diagnosed with T1D, and I can tell you from my own dataset of 1, that having a CGM results in a significant improvement in quality of life. CGMs have demonstrated a very significant impact on long term T1D health outcomes, and thereby on medical costs (use PubMed to research these topics and decide for yourself). The linkage between tight control of your glucose levels and long term effects like blindness are very well established.

Read the papers for yourself.

I'd also note that Kaiser Permanente just bought their mental health service and is providing it free to all members. Evidently, their due-diligence established real benefits...sufficient to offset the cost of the program.

I personally have stock in Livongo. I found their diabetes product to have a significant positive impact, and their recognition of the coupling between chronic diseases to provide a strong basis for future growth. Good product today. More in the pipeline. I'm keeping my money where it is.

Best regards,
Chemfool2
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No. of Recommendations: 34
Livongo Founder and Executive Chairman said:
what we've done today is we have wonderful technology we have apps and we have devices and we have medications and we have health coaches and all of this and yet for people with chronic conditions it hasn't gotten any better with all of this effort. and what we have to do is put that together into an experience that people have and that's really what we're doing at Livongo today and we call it applied health signals. and that is taking this information aggregating all this information from people's bodies from their pharmacy records or healthcare records or electronic health records interpreting what that means for those people and then applying it getting it back to those people and doing what Amazon and Netflix and others do so well iterating to see did it work and if it worked do more of it and if it didn't do less of it.

Livongo may not be doing any fancy stuff but they are trying their best to close the loop of all the disconnected pieces and serving their patients through iterations. We could call them a system integrator. While it is relatively easy to list out patient’s wants and needs, it is not easy at all to create an environment that will satisfy all your patients.

Livongo supports AI+AI for our members across a variety of uses cases. Here are just a few experiences that we’re already doing for Livongo members.

EXPERIENCE #1: Medication Optimization (in Partnership With a Pharmacist) for Diabetes
Problem Statement: Medication optimization (enabling the use of the right medication at the right dosage, and evaluation of the impact of that medication/dosage) is considered one of the most difficult things to improve in medicine. A member is on a number of different medications and is having a hard time knowing what to take when, maintaining refills, and is seeing a decline in staying on their medications due to that confusion and sense of being overwhelmed. As a result, their blood glucose levels are increasing. Livongo’s AI+AI Solution:
Livongo’s AI+AI engine uses a data science and behavior change approach that drives actionable and personalized impact in tight partnership with pharmacists from the leading national pharmacy chains.

First we Aggregate a variety of data: eligibility, formulary, current medications, pharmacy claims (to understand what conditions a member has), biometric screening data where possible, and their ongoing blood glucose data (from their Livongo blood glucose meter).
Then we Interpret that data and ascertain a set of signals that tell us the member is not taking to their medications, and that’s why their blood glucose levels are spiking. We know this, because the member’s blood glucose values are high, and they are intermittently refilling their prescriptions.

We then use our Livongo live coaching application (Apply) to help understand the member’s medication barriers. When the member speaks with our coach, we probe about why they aren’t taking their medication. If the member identifies a side effect of the medication, we identify an alternate medication that is on their formulary and connect them live with their pharmacist (by phone) to discuss the switch, or directly with their provider. The pharmacist (or provider) formalizes the switch to the new medication and guides them to make sure they are taking their medication optimally. The pharmacist has the new medication delivered to the member’s doorstep.

As the member uses their new medication, Livongo observes that their blood glucose is improving and Iterates the coaching messages, nudges, and encouragement to help keep the member on the medication.

In doing this, we reduce the complexity of the back and forth for a member with their pharmacist and providers trying to manage their medications and getting the right medication for them to be as healthy as possible.

EXPERIENCE #2: Medication Affordability for Diabetes and Hypertension
Problem Statement: A member has both diabetes and hypertension and is struggling to pay for their medications to stay healthy.

Livongo’s AI+AI Solution: In this scenario, Livongo can provide a special AI+AI solution for a member who is working for clients of ours that have put in place a program to completely pay for medications (with $0 co-pay for their employees) if a member performs certain health-related activities, such as measure their blood pressure regularly using the Livongo for Hypertension program.

So in this case, Livongo Aggregates the data that tells us which meds are in that $0 co-pay program and the criteria to be eligible for the program. We combine that data with the tracking data about how individuals are performing against those criteria. We mix in all the data we described in the last scenario: pharmacy claims, blood pressure values, blood glucose values, formulary, medications.

We Interpret all that data and create clear health signals that tell us that a specific member would use the medications more consistently if they are offered a $0 co-pay plan. And we also ascertain that the member often has a lag between prescription refills, so that signals to us that they may be having trouble getting to the pharmacy to actually pick up their prescriptions.
As part of a live coaching session, a Livongo coach Applies these signals by introducing the $0 co-pay opportunity to the member, and offers to help ensure delivery of their hypertension medication refills. The member is excited and uses the Livongo cellular-connected blood pressure cuff to measure their blood pressure consistently over the next month. They are then eligible for their $0 co-pay medication.

Livongo passes this eligibility information, blood pressure signals, and blood glucose values back into the engine, ensuring that the member’s next refill is a $0 co-pay, observes that the member’s blood pressure is improving, and Iterates the next coaching session content to congratulate and encourage the member to keep up their great progress.

In doing this, we reduce the costliness of healthcare for the member while also helping them achieve their health goals.

EXPERIENCE 3: Smarter Coaching for Weight Management
Problem Statement: A member has recently decided to take control of their weight but has been unsuccessfully using a traditional weight-loss program before. The coaches called them during the workday. They were too embarrassed to even talk to the coach, and so avoided the calls and had a bad feeling about the whole experience. They had one call and felt that the coach really didn’t know anything about them specifically and wasn’t a good “fit” at all so they gave up.

Livongo’s AI+AI Solution: For the member experience on Livongo’s Weight Management program, we Aggregate their eligibility data, nutrition and exercise data, psychographic information, and communication preferences. We have a powerful set of algorithms that allow us (from a few member-provided responses) to understand the profile of the member and how to most appropriately coach them in terms of content, style, and tonality. We also aggregate nutritional data, as well as Fitbit® exercise data.

We then Interpret their data and create a weight management curriculum that is most appropriate for them.

As we Apply that weight management curriculum, via digital, voice, video, or group-based coaching, we observe the member’s interactions and patterns. Members use Livongo applications to track nutritional data, Livongo’s digital scale to track their weight, and they interact with their Fitbit, which feeds data iteratively back into Livongo’s Aggregate layer.

Then we Iterate the coaching content and determine how best to deliver it specifically for them, continually tailoring the program to their needs. We also watch for signs of burnout and encourage them in the tough moments. For example, we may suggest they join a group coaching session to learn from their peers. Such advice is not based on speculation, rather on actual signals we’ve generated through AI+AI about what they need and what would work best for them (patterned on what we’ve seen work for others).

In doing all of this, we reduce the confusion around the set of options that work for a specific person to have impact on their weight. We help people understand what specifically works for them, and help them achieve their weight management goals!
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No. of Recommendations: 22
Sounds like Sour Grapes to me Dan. Sorry you missed the ride.

Livongo’s revenue growth continues to speak for itself. It is higher than any company discussed on this board besides Zoom. Where does the revenue come from? Giant insurance companies- are they all being bamboozled like you seem to be implying? Do you think they aren’t doing their DD and all just throwing money at Livongo and hoping it saves costs for them? Do some research on Glenn Tullman, maybe that will help you change your mind.

I still see a lot of doubters in investing communities on this company. This to me is a good sign.

Disclaimer- Long LVGO, third largest position
Bnh
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No. of Recommendations: 16
Diabetes is a medical problem poorly served by existing solutions.

No, diabetes are TWO distinct medical problems, type 1 and type 2. As far as I know type 1 is chronic and incurable. Type 2 is curable, I know because I no longer have it. The cure was losing 50 pounds. Not only was I cured of type 2 diabetes but of all the associated illnesses. I no longer take any medication that I was supposed to take for life.

The main thing that keeps me from Livongo is that the two other monitoring companies I follow, BioTelemetry, Inc. (BEAT) and iRhythm Technologies, Inc. (IRTC) are not doing so well. Anyone know why the disconnect exists? Is it the sales method?

Denny Schlesinger
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No. of Recommendations: 10
The main thing that keeps me from Livongo is that the two other monitoring companies I follow, BioTelemetry, Inc. (BEAT) and iRhythm Technologies, Inc. (IRTC) are not doing so well. Anyone know why the disconnect exists? Is it the sales method? -- Denny

Rather than keeping me from Livongo, the examples you provide would have me thinking it was even MORE evidence to own it.

Disclosure: LVGO ~18% of portfolio

Rob
Rule Breaker / Supernova Starshot Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.
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No. of Recommendations: 12
Livongo offers a whole person platform that empowers people with chronic conditions to live better and healthier lives, beginning with diabetes and now including hypertension, weight management, diabetes prevention, and behavioral health. Livongo pioneered the new category of Applied Health Signals to silence Noisy Healthcare. Our team of data scientists aggregate and interpret substantial amounts of health data and information to create actionable, personalized and timely health signals. The Livongo approach delivers better clinical and financial outcomes while creating a different and better experience for people with chronic conditions.
https://ir.livongo.com/investor-relations

I agree that this is a too long and too many buzz words for a mission. That's because it is not a mission, it is a investor relations statement about the company -- and I think they would be better off leading with their mission:

OUR MISSION
Livongo has reinvented the healthcare experience for people with chronic and behavioral health conditions. Our Applied Health Signals solutions deliver actionable, personalized, and timely insights that make our members happier and healthier, while reducing overall healthcare spending.


Behavioral health is a thing:
Behavioral health is defined as the connection between behaviors and the health and well-being of the body, mind and spirit. This includes a wide variety of healthcare services.
https://www.insynchcs.com/blog/behavioral-health-vs.-mental-...

There is a lot more at that site on behavioral health. This thread is helping me get clearer on what Livongo does -- I was being lazy as I only have a small position.

One thing I try to keep in mind about innovation and disruption is that there is a tendency to assume that there is insufficient value, because it require a different way thinking in order to see that value.

Enjoy,
Brian
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No. of Recommendations: 37
Good discussion. I obviously own a lot of LVGO. In fact, it’s moved from my #4 spot (14.8%) to #2 (18.2%) with this recent surge. I tend to view my holdings something like this:

Conviction = numbers + narrative

You simply can’t deny Livongo’s numbers. They are overwhelming and meet just about every checkpoint we have around here. The recent preannouncement suggests this isn’t slowing any time soon. I’d guess at least through 2020 since current clients have already committed for the year.

The narrative is a different story. Even as a bull, I view Livongo's story as about 50% substance and 50% slick marketing. It's admittedly unproven, but LVGO is the only company I know in this arena diligently working to show positive ROI. They have a smart founder with skin in the game. The company president is also an MD. And they REALLY seem to know how to navigate this space.

As mentioned by several, it is near impossible to significantly change most human behavior. However, I don’t view that as what Livongo’s trying to do. They are simply trying to be a helpful tool for those who are willing to help themselves. There seems to be enough of those folks around to make it work right now. In addition, LVGO is perfectly positioned as a remote monitoring option during a pandemic where people with chronic issues are hesitant to even venture outside. Will these conditions be enough to justify the hype and bring about significant change? Darned if I know, but I don’t need to. I only need to know clients WAY more in tune with this market – Kaiser, CVS, Blue Cross Blue Shield – have decided to give LVGO a legitimate chance. Until that narrative changes, I don't see a reason to adjust my current conviction.**



** Of course, it’s a lot easier to say that when my entire position built between March and June is up 202%. That’s taken away at least some of the sting from choosing SMAR over ZM last December. 😃
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No. of Recommendations: 63
In addition to chemfool2’s points, I would think it is just as appropriate to question the trustworthiness of the blog you posted as it is to question the validity of Livongo’s solution. The author of this article shed some light on that here:

“With respect to your blogger himself, they (Livongo Management) noted that the blogger had approached them a number of years ago and solicited compensation to endorse LVGO on his site. They obviously declined, and since the post you referenced, he has been unwilling to respond to their requests to engage in discussion. They claim he has been paid in the past by one of their competitors and is running a pay-to-play scheme. We noticed that he is very promotional of the Validation Institute on his site. It turns out he is listed as a certified consultant/broker for the VI (https://validationinstitute.com/certified-professionals/), which offers a certificate program starting at $1195 (https://validationinstitute.com/certification/). In a prior post, he trumpeted the benefits of the CORA Pro certificate course while simultaneously cherry-picking a couple of points to disparage LVGO (https://dismgmt.wordpress.com/2019/05/23/questions-to-ask-li...). We find his motives at best ambiguous. Needless to say, numerous 3rd party consultants have raised concerns to LVGO about this blogger and his claims.”

Regarding the author’s point that those study results were self-reported, there are certainly better methods to perform a study but may not be realistic to implement with live clients. In any case, Livongo's results can be corroborated by additional studies that used more controlled methods: https://www.hindawi.com/journals/jdr/2018/3961730/#B13.

A commenter on the Seeking Alpha article I wrote raised similar concerns and I addressed them thoroughly: https://seekingalpha.com/article/4316581-livongo-health-revo....

The rest of your points seem to be related to questioning the effectiveness of Applied Health Signals as a whole. Livongo is the first to scale but they are by no means without competition as their largest competitor, Omada Health, is focused on pre-diabetes / weight management but is expanding to compete in the same conditions as LVGO. A look at their app reviews tells it all about how effective they are. Livongo is also no slouch, they clock in a 4.8/5 rating on 13,134 reviews on the app store, some of the reviews are of patients saying it has changed their lives.

But forget all that, look at their results. Employers signing up in droves for multi-year contracts, churn at only 2% a month, and an NPS of +64. They claim demonstrable cost savings of $1900 per year per patient which translates into an average 3.7x ROI after one year, and 4.4x after two years. Is that all due to good salesmanship? In an interview, the CEO said this: “What's fascinating is that we have a handful of clients where the experience and the outcomes are so good that they're paying for the insulin if the member uses Livongo (https://www.fool.com/investing/2019/11/27/exclusive-intervie...).

And insurers are also loving it. It was the only “preferred service” on Express Script’s new digital health formulary. This was a clear indication of their dominance as Express scripts staked their own reputation behind LVGO. https://pharmaphorum.com/news/livongo-takes-centre-stage-in-...

So here we have really happy insurers, employers, and patients. Patients get to see better outcomes from gaining a better overall picture of their health and having access to personalized resources at their fingertips to help them manage it; providers can better utilize precious appointment times to more effectively engage with patients on a deeper level, having been provided with the real-time dataset that the app has gathered; and insurers can save costs from fewer hospitalizations, lower intake of medications, and more productive and happy patients. I think the results speak for themselves.

I was first introduced to this space because my friend is doing something really similar with his digital health startup he founded for managing behavioural health and I can attest to the validity of the research behind it. I think it’s not uncommon for investors to share your concerns considering that nothing like this has been done before (the technology simply wasn’t there yet), but that is the reason why LVGO gave such an incredible buying opportunity in the months following IPO. Now, with COVID-19 shining a spotlight on this space, I think that investors are starting to realize that there is a revolution going on in healthcare and it’s based on empowering patients.
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No. of Recommendations: 80
Brian,

After skepticism to the point I tore apart one of their clinical trials, I came to your same conclusion. I bought a large amount of Livongo 5 or so weeks ago. I initially was very skeptical due to two things: (1) clinical trials, and (2) like what is the value add and CAP here? I tossed it aside after looking at the numbers, and realizing that this is a tremendous and disruptive (disruptive in creating green fields, not setting aside other solutions) in medicine.

There are two things in all of medicine that can save the most money and produce the most marginal improvement in medical outcomes: (1) exercise (and people are out there counting their steps these days, Fitbit and Apple have not hurt there), and (2) compliance with cardiovascular and metabolic disease. This latter point is an enormous and unsolved pain point. Here comes Livongo that finally produces a solution, and a solution that saves its customers (large medical networks) money.

Livongo is not a monopoly (VIDA, for example, is what is used by my health insurance network) but Livongo is the clear and undisputed leader in the market. It reminds me of ISRG (that was a clear monopoly) who was derided by medical insiders as no proof of improved outcomes, too expensive, and the like. Yet, the numbers spoke SO WHAT! ISRG did eventually produce those clinical outcome trials, but only years later.

Anyway, once I figured this out, and that this does not appear to be a commodity market, AND Livongo still has not expanded internationally, and its indications are mostly new and still really unexploited (thus lots of room for upside surprise even beyond the core product) I did what I do, and I bought a lot at one time. Subject always to changing my mind and sell at any time, or of course continuing to buy more if I please, but you hit it on the head, and Livongo is the clear market leader, and also clearly has the endorsement of the leading figures in the market, and its clinical trials are well ahead of anyone else:

Livongo has reinvented the healthcare experience for people with chronic and behavioral health conditions. Our Applied Health Signals solutions deliver actionable, personalized, and timely insights that make our members happier and healthier, while reducing overall healthcare spending.

One thing I try to keep in mind about innovation and disruption is that there is a tendency to assume that there is insufficient value, because it require a different way thinking in order to see that value.

It seems to provide more relative value than Teladoc does, and yet Teladoc continues to be the dominant player in its market. Livongo is not treated as anything but in its market. It has some customer concentration issues. 5 customers make up 58% of its current revenues. Will something else come along and knock them off? That is always a risk with any investment. But Livongo's advantage is not its better product (which appears to be the case, with multiple and growing clinical evidence demonstrating its efficacy and advantage vs other solutions (well at least in one study)), but its first mover advantage, and network connections, and relationship with its customers.

Could be wrong, but that is why I invested here.

Tinker
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No. of Recommendations: 2
don't want to be argumentative Denny but diabetes is one disease see definition
https://www.niddk.nih.gov/health-information/diabetes/overvi....

Diabetes is a disease that occurs when your blood glucose, also called blood sugar, is too high.

Type 1 ,2 and gestational. All 3 are different forms or types of the disease
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No. of Recommendations: 29
Behavioral health is not a buzzword. It a department in Medicine. It is the relationship between psychiatry (MDs) and clinical psychology. They work together to provide mental health care that can in-office or inpatient (ER visits, crises centers, admissions). Just Google "behavioral health" and your favorite university and see that it's a real field.

It also interacts with other fields of medicine in the realm of compliance. Compliance, especially with chronic disorders, is the most important component to long term health (maintenance or cure).

Small nudges like reminders (alarms, calender) are helpful but they still require the patient to create those reminders. Creating apps with push notification results in better compliance. A simple analogy is setting up your alarm or calendar to set up a doctor's appointment. Most physicians don't rely on the patient to remember as 20% of patients would forget about an appointment. So offices began calling patients to remind them. This decreases the no show rate but actually creates the unintended consequence of making patients reliant on the reminder and became contact points to allow them to cancel. Next came email reminders. A big leap but not everyone checked their email. Now offices are sending text reminders and no-show rates have fallen tothe 5% range.

This same thing occurs with diabetics. Some offices would call patients with severe cases as a way to decrease admissions (capitated HMO providers) but this can be expensive, relies on actually reaching patients, and requires the doctor to stop and talk to patient. So diabetes clinics were developed where nurses specialized in diabetes would adjust insulin based on protocols until the patient demonstrated excellent control. This is expensive.

Having automatic reminders saves the doctors from having to contact dozens of patients and saves insurances ER visits and admissions.

AI controlled insulin pumps that monitor glucose continuously and responds with insulin injection mimicing normal insulin release could be LVGO next play or could take them out if developed by someone else.

I see LVGO as a intermediate-term gorilla that will be individually be picked off by companies that specialize in AI driven artificial system controlling devices. This is because there is no loyalty in medicine to any device/company by the insurance companies. There is no way that LVGO can prevent competitors from creating better systems. And insurances will drop you when something else does something similar for 5% less. And it doesn't have to be equal or better, just comparable. Each year the insurance companies will squeeze LVGO to get more with less reimbursement.

But in the intermediate term, it will do well as insurance companies put more patients into the system.
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No. of Recommendations: 10
I have really enjoyed the discussion on this. Thanks to everyone that provided input - especially those who have medical experience. I have been following this company for 6+ months and have read everything I could find on it, and I learned several new things through all these posts. I find it interesting that it took a counter-perspective to bring out all this great information.
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No. of Recommendations: 1
https://enlyft.com/tech/products/livongo


So basically 31 hr departments decided to incorporate livongo in their healthcare benefit package and revenue in 1st quarter 2020 is approx. $69 million.
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No. of Recommendations: 0
https://ir.livongo.com/static-files/b8b645dc-4ef3-4291-8760-...

This slide states over 1200 clients and 30% of fortune 500 companies.

5 customers make up 58% of revenues? Is client and customer the same thing?

If 5 customers make up 58% of revenues I would love to know who those customers are.
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No. of Recommendations: 7
For me, the simple narrative for Livongo is that America's high hospitalization costs mean the Livongo doesn't need to be that effective for there to be a solid ROI. Even if, each year, they only prevent one trip to the hospital by every ten diabetics, the cost of a hospital visit is so high that money will be saved.

And their customers have the data to prove--or disprove--that ROI. So to me, it seems reasonable to bet that ROI exists, and also to bail if there is convincing evidence arises that there is no ROI (such as Livongo losing customers).
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No. of Recommendations: 87
BroadwayDan,

Let me start by stating that there are 34 million diagnosed diabetics in the US with 500k new diagnoses each year. At present, LVGO manages just 328k of those (<1%). Those are domestic numbers, not international.

This seems like common sense to me, but from reading your post you’ve self-proclaimed as not medically savvy, so I’m going to explain it from a medical point of view. None of what I say is meant to be condescending and I want to state that I am grateful for stumbling upon this board. It’s given me 63% returns YTD. Better than any year I’ve ever had in my 6 year investing career. Thank you Saul and community.

Diabetes is a disease that requires tight control of one’s blood glucose. If HgbA1C rises above 7%, long term damage and irreparable changes occur to the vascular system of the body. This affects the heart, kidneys, carotids, retinas, peripheral vasculature, and reproductive organs. Often a way to scare a male diabetic patient straight is to inform them that they may be unable to obtain an erection if they let their diabetes go unchecked. I’ve personally witnessed countless diabetics be hospitalized for infections (bacteria love glucose), surgical amputation of gangrenous or necrotic extremities (due to loss of blood supply), and diabetic keto-acidosis (requiring mechanical ventilation and intensive care measures including hourly monitored/adjusted insulin infusions. These patients can die easily due to metabolic changes and electrolyte shifts between their cells and plasma which can ultimately results in dysrhythmias and cardiac arrest.)

It’s no wonder diabetes is the single worst comorbidity for those with a COVID infection!! I’d be concerned if I was obese, diabetic, and hypertensive. Yet, those are the THREE most common co-morbidities I see on a DAILY basis as an anesthesia provider. It is common place in my line of work. Just another “day-in-the-life”.

Healthcare has been SLOWLY transitioning from a reactive entity to a proactive entity. With good reason too. The money is in treatment. Hospitals make much more money to react to a problem or perform surgery than to prevent a problem. Surgery is where the money is. I’m surprised insurance companies haven’t pushed harder for preventative measures. It would save them money!

As for Muji, here is his LVGO analysis:

LVGO - Q120

PR: https://ir.livongo.com/news-releases/news-release-details/li......
Fool take (Crumly): https://www.fool.com/premium/coverage/investing/2020/05/08/c......
BreakerForce recap: https://boards.fool.com/livongo-q1-review-34497163.aspx
Buynholdisdead recap: https://boards.fool.com/lvgo-q120-34522030.aspx
Saul's take and buy: https://boards.fool.com/why-i-took-a-position-in-livingo-thi......
CC transcript: https://www.fool.com/earnings/call-transcripts/2020/05/07/li......
Digized on seq adds spiking in Q1: https://boards.fool.com/no-problem-i-added-some-more-today-a......
gmcnatt take: https://boards.fool.com/matt-already-pointed-out-but-worth-r......
AnalogKid take: https://boards.fool.com/i-own-a-large-chunk-of-lvgo-it39s-ac......
AnalogKid on moat: https://boards.fool.com/quotwhat-exactly-is-livongo39s-compe...... [under-rated post!]

Revenue 68.8M +114.6%, +27% seq !!
EVA (Est Value of Agreements) 89M +85%
Adj Op Inc 2.5M (vs -8M) swung pos
... margin +3.7% (vs -28.9%) !! +3260 bps
Adj Gross Margin 74.4% +330bps, -548bps seq
Adj EBITA 3.8M (vs -9.2M) swung pos
Adj EPS 0.03 (vs -0.49) swung pos
Opex 57.5M +50%
... 23% of rev -2100bps !!
CFFO -10.4M (vs -25.2M)
FCF -13.5M (vs -26.8M)
... margin -19.6% (vs -83.6%)
Cash 368M
Custs 1252 +77% !!, +44% seq
- Diabetes Members 328K +100% !!, +32% seq
$NER 110%

* 18% of clients have >1 solution
* services are more vital under COVID-19 pandemic, as chronic disease sufferers are so at risk (78% of COVID-19 ICU visits were from those having pre-existing or chronic conditions)
* added new solutions for Diabetes Prevention and Behavioral Health
* new modules for to manage stress & anxiety from COVID-19 only 3% of BH content but driving 25% of member views
* partnered with Dexcom to hook into their G6 glucose monitor https://www2.livongo.com/news/livongo-and-dexcom-partner-to-......
* partnered with Prognos Health to aggregate clinical lab data (opt-in program over members in partner labs) https://ir.livongo.com/news-releases/news-release-details/li......
* first provider selected into new curated healthcare platform Welltok from the Health Transformation Alliance (HTA) https://www.prnewswire.com/news-releases/the-health-transfor......
* major new cust Kaiser Permanente, signed up for Behavioral Health
* major new cust Govt Empl Health Assoc non-profit provider, signed multi-condition contract (largest ever) to cover their 2M members
* FDA granted emergency period for in-patient facilities to use LVGO's diabetes meter

Investor slide deck: https://ir.livongo.com/static-files/9d0d9694-2ab8-4699-be48-......
*328k diabetes members, vs 31.4M total
* 500k new diabetes diagnoses per yr
* 1252 clients +44% QoQ
* Q120 rev 68.8M +115%
* $NER 110%

My stance: I now own Livongo. This is not a biotech hinging on a binary outcome -- this is a med-tech company using hardware and ML/AI to improve lives, by managing a user's existing health condition on their ever growing "Applied Health Signals" platform. They are gaining customers at a huge rate, likely due to their heavy focus on proving ROI for companies and healthcare providers. I had them on watch list a while but am always drawn to those pesky enterprise SaaS providers over it. However, these numbers from the current Q are too good to pass up. I wish I would have acted faster (before the massive rise over past few weeks), but there is no better time than now to buy in to their continued execution from here.

[I'd really like to thank Saul's teachings for this shift in my investing behavior. As a contrast, my typical reaction to a price rocketing up after stellar earnings is "I'll just wait til it has a FUD price stumble and get in then" -- which then is a moment that never comes (or does and I'm not paying attn).]

Look at top line revenue growth in tandem with the massive drop in opex as a % of rev, as a perfect example of what we call OPERATIONAL LEVERAGE. The company is massively ramping top line, while drastically reducing the expenses needed to generate that hugely increasing revenue. I like seeing this very, very much -- so much so that I cannot put off owning this company any longer. This leverage then leads to all the bottom line metrics swinging positive last Q and this Q. Op and Cash flow margins all trending the right way.

It's a smallish position, as ultimately I am not sure how far LVGO can go (customer-wise), and unlike enterprise SaaS providers, scaling up covered members has its limits with its platform. There is a process involved, so they have to SLOW the on-boarding of new members in order to temper it's own platform growth! [If that is the extent of its "problems" here ... sign me up.] So far, their game plan (of getting more and more customers that are covering their members) has been stellar. More diseases & conditions can be added from here, and every bit of data they are collecting only strengthens the ML-driven system's power. It's not much of a moat (others can and are capturing their members' data and building ML engines over it), but their experience in this and first-mover advantage has really created a nice core platform that can only expand from here as they become the go-to market leader in this new frontier.

CEO: In particular, we believe remote monitoring is rapidly becoming the new standard in health and care. Livongo's connected technology allows our members to track vital signs of interest in maintaining health. ... There is no question in our mind that this pandemic has accelerated a more extensive virtual care delivery model. Remote monitoring is here to stay, and we expect it to become the standard of care for the most vulnerable and expensive populations.

I expect lumpiness from here, as customer sign-ups & member on-boarding waxes and wanes. If they show signs of expanding into new conditions to cover, I would likely increase my position from here. Clearly it's a new reality from this pandemic, and the populace has now had a sea change in their options of 'tele-health' vs in-person visits. This is a great trend, and LVGO is at the forefront. I like that, tech-wise, the sky is the limit in what they can cover to help members manage their own health. And I expect this company to continue tying their platform into more and more to smart-watch and medical monitoring devices from here.


-muji
long LVGO 3.5% (so far)

——————

END MUJI’s review


NEVERMIND that they just raised Q2 guidance from $73-75 million to $86-87 million! 113% revenue growth vs 83% revenue growth previously forecasted

COVID caused an acceleration of many things. Cloud adoption, remote work, and telehealth. Why go through the pain in the ass of getting hospitalized if you can avoid it? Though, admittedly I’ve taken care of patients who just enjoy the attention and turkey sandwiches and sprite we can provide at the hospital. Yum!

What exactly is a whole person platform? The term is laughable.
This is a common term in healthcare. Just google doctor of osteopathy (DO). What I take them to mean by this is they offer solutions for diabetes, hypertension, and mental health.

Not really even sure "behavioral health" is a term with any actual meaning. Is there anyone left on planet Earth who doesn't know we should sleep 8 hours, drink water, eat lean proteins, veggies, work out and spend time in nature? In a video on their site they talk about treating the whole person and mention that they could be dealing with "socio-economic" factors. So if a person is out of work, has marital difficulties and lives in a high crime area with limited health resources, the Livongo "whole person platform" does exactly what?

Yikes okay. Behavioral health is common terminology in healthcare and encompasses mental as well as physical health. Especially mental health which is an underserved population. If behavioral health was such common sense, we wouldn’t have as much of a homeless population, people on selective serotonin re-uptake inhibitors, or people committing suicide. We would have far lower obesity and diabetes rates because people would do the right thing and eat the right thing.

Individuals perform better when they are held accountable. THIS is common sense. Why has Peloton done so well? People haven’t been able to go to health clubs and gyms where there’s a social aspect and they’re held accountable by their peers. Instead they’re now held accountable by their peers and lifestyle coaches with the added bonus of doing it from home. Oh wait, this also sounds like Livongo.



I won’t pretend to know the tactics of Livongo’s sales team or the future or the end result of Livongo’s game, but it sounds way less far-fetched than you are making it out to be. If they do “badger” clients, it is probably with some good reason as I’ve described above.

I don't doubt Livongo's ability to sell to companies and jack revenue for now and maybe in the next few years. I doubt their ability to help masses of people actually improve their behavior. Modifying human behavior is incredibly difficult. Shockingly so. For example, I listened to the founder of Duck Duck Go on the Invest Like the Best podcast and thought it a no-brainer to have more privacy in my searches. But til I actually downloaded the app and started using it took forever. And it was literally the easiest thing to do in the world.

This is the most sensible point you made in this post. It is EXTREMELY hard to modify behavior. We are prone to the status quo and we fall into habits. We are inclined to do what requires the least effort. (Thank Jesus this board is NOT like that). Look at Apple watches and FitBit’s. Those things alert you if you haven’t moved enough, essentially modifying behavior. Everyone’s talking about “getting their steps in”.

I am intrigued by LVGO based solely on the TAM of diabetes and their <1% crack into the TAM thus far. They save employers and insurers money and ultimately should reduce healthcare costs in general. It is the long-term effects of obesity, diabetes, and hypertension that tax the healthcare system the greatest.


Respectfully,

HugoStocklitz…
Long LVGO since $27 (it has organically become my largest holding)
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No. of Recommendations: 1
Here is a link to Muji's original post since none of the links I inserted work.

https://boards.fool.com/livongo-q120-recap-34525093.aspx


- HugoStocklitz
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No. of Recommendations: 1
Type 1 ,2 and gestational. All 3 are different forms or types of the disease

While it is true that some people can control their type 2 diabetes with diet and exercise ... for a while, anyway ... it is not true to think that everyone can.
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No. of Recommendations: 2
Type 1 ,2 and gestational. All 3 are different forms or types of the disease

While it is true that some people can control their type 2 diabetes with diet and exercise ... for a while, anyway ... it is not true to think that everyone can.


I think everyone can but not everyone will. Not even a majority I would guess.
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No. of Recommendations: 2
BroadwayDan, I totally agree with your assessment and have posted my skepticism on this board in the past. I didn't want to push too hard as I know many on this board are long LVGO, but since you started it here is my assessment. My conclusion is that this company is perhaps committing some kind of fraud? I can't prove it of course. But the story, as you said, makes no sense.

No one can give me a good answer as to why LVGO is so successful when:
1. They have no proprietary tech
2. They rebrand a standard device provided by Dexcom https://www.fiercehealthcare.com/tech/jpm20-livongo-strikes-...
2. There are at least five independent competitors, you mentioned Omada. There are more all of whom are not doing well.
3. All major health insurance companies also have solutions for this. Here is the link to Optum's solution. https://www.optum.com/content/dam/optum3/optum/en/resources/...
4. The claims are nearly impossible to prove and don't directly benefit the buying department which is HR.
5. Why is revenue soring for an optional health service in a down market?

It's very possible, that I may be wrong. All I know is I will not be buying this stock anytime soon. If you're long LVGO, I wish you all the best of luck.
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No. of Recommendations: 2
I think everyone can but not everyone will. Not even a majority I would guess.

No, not everyone can. I had a good friend with type 2 who did pretty well controlling his while he was still working and then got drug free when he retired and spent what I thought was an insane amount of time exercising. But, after a number of years drug free and keeping up on the diet and exercise, he started finding that he wasn't quite controlling it as well as he had been and he and his doctor reluctantly began exploring adding drugs into the mix. I don't know how this would have worked long term because an idiot driver pushed him off a bridge onto the rocks below.

And, one needs to remember that, at best, one is *controlling* the disease, not *curing* it.
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No. of Recommendations: 12
No one can give me a good answer as to why LVGO is so successful when:

I can and I did, it's not the technology but the business model, it's not about healthcare but about reducing the cost of healthcare, follow the money. Cynical but real.

https://boards.fool.com/who-are-livongo-customers-34560484.a...

Denny Schlesinger
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No. of Recommendations: 9
5. Why is revenue soring for an optional health service in a down market?

This is from a MF article:
“78% of COVID-19 cases come from the immunocompromised or those with serious chronic conditions. As a result, patients with diabetes are deferring checkups at local hospitals and clinics due to fears of contracting the coronavirus.

Therefore, the demand for a no-contact telemedicine app like Livongo's to keep track of diabetes and hypertension has increased dramatically. “
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No. of Recommendations: 0
Thanks, Denny. That post was a straightforward answer. Does this mean that the primary benefit in the short term is a reduction in the cost of drugs or treatment for that member? For example in the case of diabetes, if you weigh less than you consume less insulin?
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No. of Recommendations: 1
Does this mean that the primary benefit in the short term is a reduction in the cost of drugs or treatment for that member? For example in the case of diabetes, if you weigh less than you consume less insulin?

Not Denny, but...

I would say the primary benefit to all diabetics will be reduced hospital visits, reduced doctor visits, and reduced insulin costs in that order. Reduced hospital costs will be a huge savings.

The majority of diabetics are type 2s and most, not all, do not take insulin; they take other meds that assist the insulin they still make themselves to be available to the body. Some type 2s eventually need insulin. Type 1s need insulin and the amount for each person varies hugely depending on weight/diet/sensitivity to insulin/age of diagnosis.

Fafar
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No. of Recommendations: 29
BroadwayDan, I totally agree with your assessment and have posted my skepticism on this board in the past. I didn't want to push too hard as I know many on this board are long LVGO, but since you started it here is my assessment. My conclusion is that this company is perhaps committing some kind of fraud? I can't prove it of course. But the story, as you said, makes no sense.

No one can give me a good answer as to why LVGO is so successful when:
1. They have no proprietary tech
2. They rebrand a standard device provided by Dexcom https://www.fiercehealthcare.com/tech/jpm20-livongo-strikes-......
2. There are at least five independent competitors, you mentioned Omada. There are more all of whom are not doing well.
3. All major health insurance companies also have solutions for this. Here is the link to Optum's solution. https://www.optum.com/content/dam/optum3/optum/en/resources/......
4. The claims are nearly impossible to prove and don't directly benefit the buying department which is HR.
5. Why is revenue soring for an optional health service in a down market?

It's very possible, that I may be wrong. All I know is I will not be buying this stock anytime soon. If you're long LVGO, I wish you all the best of luck.



Really? I'm not sure I can let that pass.

Since your first post, there's been about a billion comments on the pros and cons of LVGO. While many reinforce the bull case, there has been a nice balance of posts detailing the very real risks of owning Livongo. In some way, shape or form I think all your concerns have at least been touched upon. In fact, some were addressed in great depth including quotes and links. Shareholders should always know the bear case for their stocks, and this thread has been very helpful in that regard.

If your conclusion is the company is committing fraud, you should probably just abandon the thread. You'll save yourself a lot of time and money. You can just chime back in to say you told us so after it's revealed the books were cooked all along.
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No. of Recommendations: 4
No one can give me a good answer as to why LVGO is so successful when:

I can and I did, it's not the technology but the business model, it's not about healthcare but about reducing the cost of healthcare, follow the money. Cynical but real.


Absolutely correct.

And that explains why insurers are reporting annual cost savings for each diabetic of in excess of $1900/yr.

cheers
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No. of Recommendations: 4
Thanks, Denny. That post was a straightforward answer.

My pleasure!


Does this mean that the primary benefit in the short term is a reduction in the cost of drugs or treatment for that member? For example in the case of diabetes, if you weigh less than you consume less insulin?

I doubt anyone can map how the cost reduction is achieved member by member. We are dealing with complex systems with thousands of members with diverse ailments treated by various services with a diversity of procedures and products. It could be reduced visits to the doctor, fewer tests, fewer medications, and even non-medical spending like reduced insurance rates or less paperwork. I wouldn't dare try to answer that question more explicitly. Maybe the company answered your question in an earnings report of SEC filing. You could always ask Google

How does Livongo save money?
https://www.google.com/search?client=safari&rls=en&q...

This comes up:

Case Study: Livongo Demonstrates Cost Savings

A scientific study presented at the 77th Annual American Diabetes Association’s Scientific Sessions shows Livongo drives cost savings for two large self-insured employers.
Livongo’s data science team conducted a retrospective data analysis for two large self-insured employer clients leveraging multiple data sources.
1. Health benefits eligibility data from clients
2. Enrollment, population demographics, and blood glucose values from Livongo
3. Medical claims spending from claims administrators


https://www.livongo.com/docs/pdf/LivongoCaseStudy-CostSaving...

Ideally you would want third party confirmation but growth (clients, members, and revenue) is a good proxy assuming their clients are not taken in fraudulently. I assume innocent until proven guilty and my instinct tells me it's a good business model. I used to sell insurance way back when and my portfolio included a few group healthcare policies. I was successful in part because my spreadsheets were able to answer complex questions. It's not just how much the policy costs but how the benefits compare with competing policies. I took the time to assemble that kind of data when spreadsheets were still a novelty, around 1977/78, on an Apple II.

Denny Schlesinger
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No. of Recommendations: 32
Hey All,

I have nothing but respect for the investors on this board and root for all to make money.

I'll just say this - we all have our defining experiences. Recently the legendary Fool and brilliant writer, Morgan Housel wrote a very compelling piece about a tragedy that greatly affected his life.

https://www.collaborativefund.com/blog/the-three-sides-of-ri...

This tragedy made him particularly risk averse. And he has said he optimizes his portfolio for peace of mind.

For me, I once got suckered on a franchise deal. So I'm hyper-sensitive to what I believe to be hype, over-promising. I do NOT believe Livongo is a fraud. But I see things in the language I just don't feel comfortable with. And in the narrative it is too easy to see the hole in the Death Star that brings the whole thing down. ONE large client comes out and says it didn't work to drive down costs so they dropped the service - and the stock collapses. And on top of that I don't believe in behavior modification working at scale, so for me it's just too easy to see the downside.

Bottom line is there are companies like CrowdStrike, Fastly, Okta that indisputably work. Our top tech guys and orgs like Gartner vouch for them. I know some here cite peer-reviewed studies that claim Livongo is lowering costs/improving health. I just think the possibility of these being skewed or the foundations of the studies being questionable are higher than in non healthcare tech.

Livongo is up against all the forces aligning against human health - junk food, fear inducement, income inequality, marital stresses, etc. Again with the Narrative - those are bad guys in the story that I personally don't want to go up against. When the CEO says his biggest competition is "inertia" I run screaming like I just saw a mouse.

Feel free to email me any responses I think we all know where we stand here and don't want to further clog the board.

FWIW - on a side note, after reviewing my negative feelings towards ROKU and LVGO I decided to drastically reduce my TTD position as the fact is we do NOT yet know if companies can demonstrably deliver better ROI with targeted ads, nor do we know Facebook/Google walls will fall. I believe those things are likely to happen but it's not certain. So I believe the Saulinian method is, above all, trying to invest in WHAT IS over WHAT MIGHT BE. And never settling for an A- stock when you have A+ stocks.

Fool On,

BD
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No. of Recommendations: 1
People with diagnosed diabetes incur average medical expenditures of $16,752 per year, of which about $9,601 is attributed to diabetes. On average, people with diagnosed diabetes have medical expenditures approximately 2.3 times higher than what expenditures would be in the absence of diabetes. and I assume that is for all diabetics, not just type 1 or bad type 2 . As people get older that average 2.3 X figure will rise.
So as has been pointed out, making even a modest dent in that pays off. So far the evidence is that Livongo can do that, The insurance companies know what diabetics cost, if Livongo is not helping they will soon drop Livingo services.
Not my biggest holding because of the same questions.
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No. of Recommendations: 3
And on top of that I don't believe in behavior modification working at scale

It will have an impact on people when the insurance companies start adding a "non-compliant fee" onto their monthly premium.

I just recently retired, and our insurance carrier charged anyone that used a tobacco product an extra $100 per month for insurance. This would be refundable if they quit within the calendar year after signing up for one of their health programs.

Now all of us nonsmokers were indifferent to the tobacco fee until it was asked how long before they come after the people that are over weight, diabetic, have hypertension, etc. We could see a time in the future where they will expect you to be compliant in living a healthy lifestyle or pay an additional fee.

gcr
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remote monitoring is rapidly becoming the new standard in health and care. as an example a family member was fitted with a pacemaker that can be remotely monitored via the internet Before that it was a pulse monitor, constantly monitored, which notified my health care provider with ecg readings. That found the arrhythmia problem leading to the pacemaker install.
IOT at work
Other big prizes are obesity and mental health, rather obviously the present system is not dealing well with them. I have more doubts about utility of LVGO here
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Denny did not know that the insurance companies only pay for LVGO if the employee uses it. Thus avoiding that large group who will never help themselves.
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Hi GolfCaddy4PLynch,
From my reading of their papers the biggest short term cost savings is the number of ER visits. From my reading of diabetes papers the biggest long term cost savings stems from the number of ER visits saved, plus the number of complications that don't need to be treated because they didn't develop. The metrics relating blood sugar levels to care cost have been developed in several nations (relating blood sugar to care cost) including the British NIH and the American Diabetes Association. Both have big databases of patients.

Basically Livongo offers preventative maintenance (pay me now or pay me later stuff (from the old oil change commercial)). It's cheaper to care for someone who stays healthy.

Chemfool2
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Hypertension is not always or even mostly driven by life style choices
According to the Mayo Clinic. "For most adults, there's no identifiable cause of high blood pressure. This type of high blood pressure, called primary (essential) hypertension, tends to develop gradually over many years."
As long as weight and diet is kept to a responsible level this can be controlled by medications taken only 2 or 3 times a day. Even then compliance can be spotty
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No. of Recommendations: 11
BD,

Feel free to email me any responses I think we all know where we stand here and don't want to further clog the board.

Actually, as others have also posted, I think this thread has been extremely helpful for those invested in, or considering investing in LVGO. This is not clogging the board, this is great discussions going on (much better than the hundreds of Zoom anecdotes we got that my uncle's girfriend's son's company is using Zoom for their calls), and also appreciate hearing both sides of the investing thesis to avoid group think and confirmation bias.

That said, I don't agree with your position. Full disclosure: LVGO has grown into my largest holding and I couldn't be happier/more confident in it's future! I bought most of my position in the low $20's in the first few months of this year to bring it to a mid-sized holding in my portfolio, it then did the rest to become my largest position.

ONE large client comes out and says it didn't work to drive down costs so they dropped the service - and the stock collapses.

It's funny you say this, then in the next sentence list Crowdstrike as an alternative company that indisputably works and therefore doesn't have that risk (maybe putting words in your mouth, sorry if I am, but that's the way it reads to me). What about Crowdstike having ONE large security breach to bring it crashing down and the stock collapses? Seems like just as valid a concern, right?

I know some here cite peer-reviewed studies that claim Livongo is lowering costs/improving health. I just think the possibility of these being skewed or the foundations of the studies being questionable are higher than in non healthcare tech.

I suppose that's possible, but... I have some diabetes experience (not personally, but my Dad had it, and died from complications of it), and aren't sure of what the typical costs are, but as Mauser pointed out in a previous post, they're significant. Two years ago I had to make an emergency room visit for a kidney stone, some IV pain meds given, a couple xrays taken, and sent home in less than an hour and a half. I imagine this is much less than a diabetic would go through with a trip to the ER. My portion of that ER visit was $2800 (don't remember how much my insurance also kicked in), I can EASILY see where Livongo has an incredible ROI for a WIN-WIN-WIN-WIN business model (enterprise, insurer, member, stockholder). And as others have pointed out, currently <1% of just the US diabetic population, not even considering the other conditions they're now treating or the international expansion opportunity that exists, the greenfield TAM is staggering!

Keep the dissenting opinions coming!

Long LVGO.
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No. of Recommendations: 1
I don't own Livongo because I don't trust their engagement/ROI #s and at this point, I think the stock is acting like they're going to sustain 100%+ growth which I don't think will be the case.

Too many other good opportunities in my opinion and I'm willing to miss this one because of how unsettled I feel about it.
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No. of Recommendations: 3
Denny did not know that the insurance companies only pay for LVGO if the employee uses it.

Can you prove that I did not know?

I can prove that I did know.

Denny Schlesinger
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No. of Recommendations: 6
Actually, as others have also posted, I think this thread has been extremely helpful for those invested in, or considering investing in LVGO.

I want to second that. I know the board rules are pretty strict, and sometimes I feel they stifle discussions like this. As the previous poster was worried about "clogging the boards". He's afraid of having an on-topic discussion about a stock. I have no position in LVGO, and haven't really looked at the company at all. However, it is just this sort of discussion that I (and I'm sure many others) would value. I would think this should be a must-read thread, along with some of the deep dives on the financials, if someone was considering investing in this company.

I realize this is bordering on OT per the rules, but I hope this will be left up on this board as an encouragement to engage in detailed discussions like this. IMO, this is what TMF was created for, and it's why I'm here.

1poorguy
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No. of Recommendations: 5
Foodles,

Sorry about kidney stone. Ow.

CrowdStrike was not best example to use in that instance. But still it would have to be an absolutely catastrophic breach AND market would still need to believe another company could do better the next time. Longer distance to travel to get to devastation to company that could befall Livongo.

I totally get the story of how Livongo can win big. What I do not hear anyone saying is exactly how the company successfully modifies behavior to improve health and lower costs. And if they don't really improve health, merely lower costs, then story is a bad joke. Founder and CEO talk a flowery game of their commitment to humanity.

So let's say a worker, let's call him Chubby Gilooly, is eating terribly, hates working out, is pulling double shifts at his computer terminal and keeps forgetting to take his meds causing him to return to doctor, need more expensive health care etc - exactly what does Livongo do? Send clips of Tony Robbins cheering him on? Do talk therapy for hours to address the emotional part of his whole person platform? Send alerts to his app to give him a Pavlovian shock as he salivates over the bacon wrapped chicken donut sandwiches his buddy brought to celebrate a birth?

I respect that Saul preaches let the money talk and trust that if the growth is there the product is almost certainly good so we don't need to know intricacies of the tech. But I think that's not way to go here. This is narrative investing gone wrong - a fantasy story of magical health care provided to a race of humans, Homo Reasonablus, that doesn't exist.

I'm not commenting anymore as dad yelled at me once and I can't take another beat down.

BD
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No. of Recommendations: 6
There is one other thing to consider about LVGO's patient monitoring and reminder system. They collect data. Tons of it. That data will (should?) be fed to AI algorithms to "data-mine" new insights into diabetes and patient behaviors. AND, when something seems "wrong" to the observant little algo-puppies, they bark loud and tell the patient something that could save their life, like those dogs that bark when a person is about to have a seizure.

On human behavior: I hear you and agree somewhat. The Industrial Safety engineering community (people who design safety gadgets for machine shops and factories) will tell you that the LEAST reliable safety device protecting the life of a human IS THAT HUMAN. The human will disconnect a safety strap if it is uncomfortable, like refusing to wear a seatbelt in a car.

Nonetheless, the data can still be gathered, and many humans will do the right thing for themselves when reminded. And at some point, insurance companies will use the voluntary surveillance of the app to ding the human's employer about non-compliance, just like how an automobile insurer might use their app that tracks the driver to ding them for speeding too much.

LVGO does have the potential to be overrun by some competitor. Their idea is easily duplicated and maybe improved. But it hasn't happened yet. When it does, I hope we see it coming and get out before it has been commmoditized.
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Denny I meant that Idid not know, left out the"I"
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No. of Recommendations: 26
I respect that Saul preaches let the money talk and trust that if the growth is there the product is almost certainly good so we don't need to know intricacies of the tech. But I think that's not way to go here. This is narrative investing gone wrong - a fantasy story of magical health care provided to a race of humans, Homo Reasonablus, that doesn't exist.

I had a longer post which disappeared into the ether.

I have been bullish on LVGO since it was at much lower prices. Being in medicine, I can tell you that this is not a "fantasy story of magical health care." My longer term experience with patients gives me a window into the potential of LVGO. Your knock on LVGO for using a "whole human" approach seems wrong-headed. This is a strength since it is addressing multiple conditions and this increases its chance of success. All of these conditions are inter-related. And "behavioral health" is a legitimate part of medicine which addresses psychiatric issues, substance abuse and other disorders. It doesn't have to produce earth-shattering benefits to be a huge winner. In addition, this pandemic has made LVGO's telemonitoring indespensible and I believe this change in medicine will be long lasting. It won't completely replace interactions with physicians but augment them.


I agree with your concern about the efficacy of LVGO's approach. So I appreciate your bearish take even if some of your thoughts don't seem perfectly founded and might be overly dramatic. The most successful companies all had their detractors - nobody thought SBUX could become a behemoth from making coffee!! - and their risks (our tech companies could be outflanked by better tech). But they all had one thing in common. They were top dogs in their niche - that describes all of our more successful companies. And they are each riding a huge wave. LVGO has risks and I always have doubts so it's only 11% of my portfolio after its rise. But it has massive potential and its just getting started. It's probably best to follow the money, ride the wave and not overthink things.

Dave
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Denny I meant that Idid not know, left out the"I"

The skinniest letter of the alphabet almost started a war, amazing! Thanks for clearing that up.

One of the articles I read before posting did mention it and I did a double take... "Is this material? If so, how?" Licensing software is not simple, charge too much and you price yourself out of the market, too little and you leave money on the table. Business wise it makes sense to charge per member.

--------

There is a lot of value signaling in this thread (I don't mean you) and, as far as I'm concerned it's irrelevant. What matters is whether or not Livongo makes good on the promise to reduce the cost of healthcare. If it does it's doing society a lot of good!

Denny Schlesinger
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No. of Recommendations: 2
So let's say a worker, let's call him Chubby Gilooly, is eating terribly, hates working out, is pulling double shifts at his computer terminal and keeps forgetting to take his meds causing him to return to doctor, need more expensive health care etc - exactly what does Livongo do?

Not the point. Probably not much to be done with Mr. Gilooly. But, there are lots of people who would like to do better than they manage to do on their own who are good candidates for help if the help is easy.
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LVGO does have the potential to be overrun by some competitor. Their idea is easily duplicated and maybe improved. But it hasn't happened yet. When it does, I hope we see it coming and get out before it has been commmoditized.



But The idea may be duplicatable but I'm not certain about how easy that would be. You have got to build the database, garner the experience establish the AI framework and build the system and then market it. Surely that represents a few years of effort.??
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Surely that represents a few years of effort.??

During which Livongo is presumably improving on the quality and breadth of their offering. Catching up can be hard to do unless the leader relaxes or you have some "trick" that allows you to do something much faster than it was done before.
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No. of Recommendations: 11
Broadwaydan,
I am bullish on Livongo and have posted on it before. Several posts have covered many positive attributes of Livongo. Let me try to add a few points that may not have been discussed much.

1. Whole-person approach - this is their moat. There are many 1 solution companies. Management has said that it is because of there whole-person approach where Livongo is looking at multiple chronic issues that helped them get Medicare approval. Livongo will continue to add more and more chronic conditions. Management has said that they plan to add cholesterol this year. Think of a feature where all your medical data goes into an AI database and you can actually predict the onset of a disease or a condition. Can AI, remote monitoring do that? That would be totally disruptive. But that is far into the future. It is not the thesis to own Livongo now of course. The thesis now is to manage chronic conditions slightly better so that we can save costs.
2. Mental health - Management has said that it is the mental health feature that got 3x more use during the last 3 months.
3. You say management is hyping. Both Glen Tullman and Zane Burke are veterans. They were running multi-billion $ health care companies. I find their knowledge of their business simply amazing. Look at all types of partnerships they have developed. It will be very hard to replicate by any new company.
4. Behavioral modification - 35% of the members in a client sign up for Livongo as opposed to single digits for typical wellness plans. Think about that - it seems to me they are selling something that is wanted.

Best wishes
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No. of Recommendations: 28
Personal integrity of a company's leadership is, along with vision, capability, and executive acumen, a sine qua non for me for holding a significant position. LVGO recently passed MSFT as my largest holding.

If i were asked to name 5 leaders in whom i have a high conviction in their honorable, shareholder friendly values, Glen Tullman would be on my list. He's a recipient of the Ripple of Hope Award, an annual honor to those who make profound contributions to humanity. It's run by Ethel Kennedy and named after Robert Kennedy's "Ripple of Hope" speech. They carefully vet/scrutinize the character of recipients.

i have watched or read maybe 30 speeches, interviews, Q report transcripts by Tullman and believe i know him as well as any CEO among the large 100+ basket of stocks which i follow at varying levels of detail. He is brilliant and i think fully committed to living an honorable life. Without exception, the content of his public statements focus on larger issues than Livongo and i have never seen him hype the company in any way. It's clear to me that his legacy as positive contributor to society is at the top of his life's mission

Livongo is the last company i would have worried would overhype. To the contrary, Tullman especially is inculcated with modesty and that is reflected throughout the company, IMO.

As a disclaimer, i should add that i have been wrong about CEO integrity more than once. Most memorable to me was 2002 when i felt sure that Dennis Kozlowski was an capable, honorable executive who was getting a bad rap, and i lost a ton of money on TYCO.

I understand how to use the Internet better than i did then and make fewer mistakes. But that was not the only time i have wrong about CEO integrity. It is the most difficult element for me to be right about among my investment criteria. To be clear, leadership integrity is usually not a problem, IMO, most CEO's try to fulfill their fiduciary responsibilities, and i am generally optimistic about people in that regard.

But integrity is critical. Buffett has said he looks for 3 qualities in hiring leadership: 1)intelligence or capability, 2)energy, and 3)integrity. "But if you don't get the 3rd quality, the first 2 will kill you." Buffett is right about that.

I've been ultra conservative about integrity the last 12 years or so, and have missed out on multiple opportunities due to doubts about leadership's shareholder friendly values. While i could be wrong, Livongo would be the last on my list of integrity concerns among our hyper growth stocks. That's not to say i am right in thinking LVGO will become a great company. That is a different question. But if i'm wrong about Tullman's character, i'll have to conclude that i simply don't have the tools to assess that quality.
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