In this episode of the McKinsey on Start-ups podcast, Daniel Eisenberg speaks with Dr. Tryggvi Thorgeirsson, the CEO and Co-founder of Sidekick Health, an Iceland-based start-up that works with pharmaceutical companies and insurers to provide gamified, digital care and therapeutic programs to help patients with disease management and treatments. An edited transcript of their conversation follows.
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Daniel Eisenberg: Hello and welcome to McKinsey on Start-ups, I’m your host, Daniel Eisenberg.
Technological innovation plays a critical role in healthcare, whether we are talking about MRI and CAT Scan machines, electronic medical records, e-prescriptions or pacemakers. These days, a growing number of start-ups are focusing on using digital tools to improve the quality and availability of care, especially for chronic conditions that account for a large share of rising healthcare costs. The pandemic has in many cases only increased demand for these kinds of products, as quarantines and lockdowns made services such as telemedicine and remote patient monitoring often the only way to obtain medical or mental health care.
On today’s episode, we are going to speak with the CEO and Co-founder of Sidekick Health, an Iceland-based start-up that works with pharmaceutical companies and insurers to provide digital care and therapeutic programs to help patients with disease management.
Dr. Tryggvi Thorgeirsson is Sidekick’s chief executive officer and co-founder. He is an experienced physician and researcher with an engineering background. Thorgeirsson is a guest lecturer at Harvard and MIT on topics including data-driven health and the application of behavioral economics to lifestyle interventions. He is the current chairman of Iceland’s Technology Innovation Fund, and advises the country’s government on innovation strategy and implementation.
Tryggvi, thanks so much for joining us today.
Dr. Tryggvi Thorgeirsson: Thanks so much for having me.
Daniel Eisenberg: Tell us about what Sidekick Health does, and how you came to establish the company. You were a practicing physician earlier in your career, right?
Dr. Tryggvi Thorgeirsson: Yeah, that’s right. Sidekick develops digital care and digital therapeutics programs. We partner with global pharma companies and global health insurers to improve patient outcomes, improve treatment adherence, and reduce cost of care.
I was a practicing physician. I absolutely loved working as a clinician, but I really felt I didn’t have the right tools to approach health care in the way that I would have wanted to. One of the things that I repeatedly felt was that I was putting out fires that I would have wanted to prevent, working more downstream than I felt was necessary, partly due to a lack of effective tools.
Daniel Eisenberg: And was there one overarching aspect of the health care system that you wanted to solve?
Dr. Tryggvi Thorgeirsson: Yes, our current health care structure is still based on what we created in the last century, lots of brick and mortar really well suited, in many cases, for acute conditions. But today 80 percent of our health care costs, and the majority of our deaths, are due to chronic, lifestyle-related diseases. To tackle them at the scale that we are doing today, we obviously have to do a much better job at empowering patients to take an active role in their treatment at home, so that our very expensive, brick-and-mortar institutions and our fantastic professionals in the health care industry are used primarily for the most complex cases.
We know that to have a lasting impact on health behaviors, and really tackle the kind of underlying problems that drive many of our disease burdens and costs, we have to have a long-term relationship with patients over weeks and months and years. And we obviously can’t do that within the brick-and-mortar setup. That’s where technology can hugely help us, allowing us to have those touchpoints multiple times a day, week by week, month by month.
Daniel Eisenberg: So you develop digital tools and online portals that essentially act as that vehicle for engagement, enabling an ongoing relationship with the patient, especially for chronic diseases?
Dr. Tryggvi Thorgeirsson: Exactly. Our platform can be applied across a wide range of different diseases, ranging from inflammation, immunology and cardiovascular to metabolic, oncology and other therapeutic areas.
If you’re a patient with one of these chronic conditions, your health care professional, be it your doctor, your nurse, or other professional, will give you access to our patient support program. Through your smartphone, we deliver every week a tailored program that walks you through questions such as, “How can you better navigate your symptoms?”; “What are the symptoms to look out for?”; “What are the underlying risk factors?”; “What are things you can adjust in your life to in order have a beneficial impact on your prognosis?” That can be things like helping you quit smoking, exercising more, weight management.
And then we help you optimize and better understand your treatment—for instance, are there any side effects that we can help you manage with? In some cases we also use remote patient monitoring, which is one of the capabilities on our platform that allows your care team to remotely monitor your symptoms so that we can step in in a much more timely manner.
That’s one of the things that our current structure in health care isn’t doing well enough. You have a chronic condition, and you meet your doctor on a predefined schedule. So once a year, you’ll have a checkup. But, in the meantime, you can have adverse events. Just the other day we picked up a silent heart attack in one of our users, where the nurse who was monitoring that patient saw that certain signals were going in the wrong direction, and immediately gave that patient a call. This was in a remote area, so the patient was flown in and admitted to the hospital. And through a couple of days of admission, they were able to turn around the condition, as opposed to having things deteriorate rapidly at home, where you might have much worse outcomes, both in terms of health and costs. So that combination of patient support programs, remote patient monitoring, and timely interventions is at the core of what we do.
Daniel Eisenberg: Tell us a little bit about how you chose the therapeutic areas to focus on initially.
Dr. Tryggvi Thorgeirsson: First of all, we’ve been in this industry for quite some time. We started out eight years ago, with myself and my co-founder, Saemundur Oddsson, who’s also a medical doctor and was practicing cardiology at the time. And then a fantastic team of technology developers, designers, and others grew with us.
I think it’s quite natural to a clinician to start in the cardiovascular space. It’s just so clear how supporting people with nutrition, physical activity, mental health, all of this, can directly benefit health outcomes. Within cardiovascular, we’ve been expanding into peripheral artery disease and a few others with our clients and partners. We also did research and work in in obesity, Type II Diabetes. We then started working within inflammation and immunology, initially in ulcerative colitis, but then we expanded into Crohn’s disease, rheumatoid arthritis, and psoriatic arthritis. And we are looking into adding a few additional inflammatory conditions.
We have recently been expanding into oncology with some of our partners as well. So that’s how our portfolio has been growing, from initially cardiovascular to cardiometabolic in a wider range, then into INI, oncology and others.
And to me, this was always the plan. Very often patients with chronic conditions have more than one condition, and if you think about it from their perspective, they definitely don’t want two different tools. They want a platform where they can be supported holistically.
Let’s say you have heart disease and you smoke, or Type II Diabetes and you’re overweight. You want programs that tackle these holistically and work together. That makes sense both from the patient’s perspective, but also from our partner’s perspective, where they really do choose and prefer vendors that can have that broader capability to work across multiple conditions.
Daniel Eisenberg: What kind of results, clinical outcomes, have you seen as a result of your programs?
Dr. Tryggvi Thorgeirsson: We have seen lots of different types of outcomes through different randomized clinical trials (RCT) and live data with our partners. We’ve seen in obesity that people are three times more likely to achieve their weight loss goals when using our platform as opposed to standard care alone. In a study that came out last year, Type 2 diabetes patients receiving full care who were additionally supported by Sidekick over a period of six months experienced a significant drop in HBA1C, which is the long-term blood glucose. And the drop that we saw was not just statistically significant, but clinically significant, and translates to about 16 percent less risk of death from diabetes, and about 30 percent less risk of complications like amputation and blindness.
We really do see a strong impact on those types of hard clinical outcomes. But equally important is we see a positive impact on mental health and quality of life. For example, in the diabetes study, we saw 40 percent improvement in a score that measures disease-specific distress, based on questions like, “Do you feel discouraged, alone, or depressed about your condition?” We also saw a 24 percent reduction in scores for anxiety and depression in those same patients.
Daniel Eisenberg: And in terms of your work with global pharma companies, what are the end goals of these deals? How does this work for your chosen business model?
Dr. Tryggvi Thorgeirsson: In our experience, pharma have been very clear, over the past few years, that they are selling outcomes, they’re not selling pills, really.
It’s all about creating the maximum value. If you’re a pharma company, you might have spent $1 or $2 billion getting a new drug to market through all of the different phases of development. If packaging that traditional therapeutic with a digital therapeutic can augment the impact of that therapy, there’s a huge value in that.
So improving patient outcomes has a huge benefit, of course, just in brand differentiation and competitive standing. More and more, it is also relevant for direct reimbursements, and that’s one of the interesting evolutions happening in the industry.
There are about 300,000 lives lost in Europe and North America alone every year due to lack of treatment adherence. So just helping there is a hugely impactful thing. There are a lot of things that we can impact, direct business outcomes for our partners, while improving patient outcomes and cost of care. And all are a part of what pharma calls “going beyond the pill.”
Daniel Eisenberg: Whether you’re working with pharma or starting to work with payors, insurers or providers, does the business model vary, or is it pretty consistent across those different groups?
Dr. Tryggvi Thorgeirsson: There is usually both some kind of a traditional license fee element and then a value-based element, which is definitely adapted case by case.
We see an interesting evolution going on in the market, where pharma has been an early adopter. But pharma are huge organizations, where you have the commercial teams, medical, market access. You also have the BD, you have the R&D, compliance, regulatory. All of these are different stakeholders within pharma, and even there, you have different levels of adoption.
So at least in our case, we started working more with the brand and the commercial units. But we are having more and more interesting dialogues now more “upstream” within the drug development process. We are now starting projects where we are doing joint R&D and joint clinical trials with our pharma partners, and then aiming for joint marketing with a combination therapy of a traditional and a digital therapeutic.
Daniel Eisenberg: As you start to push more into R&D side, and especially clinical trials, how much of a challenge is that for your organization? Does that require different skills or capabilities from your end?
Dr. Tryggvi Thorgeirsson: We have done research projects already, RCTs and different types of projects, be it Phase III Clinical Trials, Phase IV Clinical Trials. So we have experience and a strong clinical research team, in addition to the product development team.
Adapting a product and an approach for this setting is quite straightforward to us. Of course, there are interesting considerations and dialogues on how to set up the trials and the end goals, with all of the stakeholders.
Daniel Eisenberg: To what extent are you pushing into working with payors and insurers or even providers at this point?
Dr. Tryggvi Thorgeirsson: As I mentioned before, when we were getting started a few years ago our feeling was pharma were the early adopters in taking solutions like this to scale. For that reason, while we had pilots with payors and providers as well, we really decided to focus on pharma.
But one of the things we have been experiencing over the past 12 to 18 months, and even just the last six months, is an acceleration in the marketplace, especially when it comes to payors, who are becoming much more serious at scaling these types of tools. And COVID has definitely accelerated the pace there.
Obviously, the benefits for payors of scaling these tools is tremendous—both in terms of their patient outcomes and cost of care. There are some really interesting things that we hope to be able to announce within a few months.
Daniel Eisenberg: Let’s talk briefly about COVID. Obviously it seems the pandemic has generally had a significant impact on telemedicine, remote monitoring, and virtual appointments. How has it impacted your business, or business model at all?
Dr. Tryggvi Thorgeirsson: The biggest change was just this overall acceleration that we see in our market. Things had already been moving fast, with rapid growth, but with COVID our feeling is that many aspects of the market have jumped forward by two or three years. Everyone has been forced to use digital tools to greater extents in all aspects of their lives—patients, providers, clinicians—and everyone’s readiness to use and scale these kinds of solutions has overall increased.
Earlier on in the epidemic last year, there was a short-term slowdown, where our pharma partners, for example, just didn’t have the access to clinics, naturally, that they had previously had. So there was a cool-down in distribution for a few months, which has been slowly resolving.
In terms of our product, one of the things that we definitely did emphasize more over the past year is remote patient monitoring. Throughout the pandemic, there has obviously been a lot of need to be able to remotely track patients who aren’t able to come in for their checkups. That way, we can monitor symptoms, bring that up on a dashboard, which, in some cases, is monitored by our care managers, but in other cases integrated into the dashboards with our provider partners.
Daniel Eisenberg: I understand you did quite a bit of work on COVID in your home country of Iceland.
Dr. Tryggvi Thorgeirsson: Yes. We are a small island in the North Atlantic Ocean, and things are different here from larger countries. So we were able to have a centralized, let’s call it the “call center” approach, where there was just one division at the National University Hospital who remotely monitored and supported all of COVID-19 patients in Iceland.
Anyone with a confirmed diagnosis went onto the roster of this department, and was remotely supported, initially through phone calls, by a fantastic team of nurses and doctors. When this started, we felt our technology could help, so we offered our assistance, and patients with COVID-19 received a program in their phones. We had doctors, nurses, physiotherapists, and a psychologist, talking to patients about such things as the symptoms to look out for, or how to manage the stressors of being in home isolation with COVID-19. And each day, the patients were entering their symptoms through an outcome form in the app.
We also had a dashboard for the clinicians where they could see, day by day, how their patients’ symptoms were evolving. With a large team of expert clinicians, we came up with a risk scoring system (green, yellow, or red) to have the ability to easily flag a patient for action if they needed early intervention.
Through this monitoring system here in Iceland, both through the phone calls and our platform, we have had really good results in terms of low mortality rates and low ICU admission rates. And that’s largely because of early interventions. If you have this structure in place, for instance, and you see, through the self-reported symptoms, that a person at home is becoming dehydrated, really fatigued, maybe even experiencing nausea and vomiting, you can bring them in, often at the outpatient clinic, give them medication, maybe IV fluids, and send them back home.
The alternative could be that they might stay for two additional days at home, and due to dehydration, they could go require ICU admission in a very serious state. So by remotely monitoring and supporting, you can really, in many cases, turn things around in a much more timely fashion.
Telehealth: A quarter-trillion-dollar post-COVID-19 reality?
Daniel Eisenberg: That makes perfect sense. One of the aspects of COVID was that people were often told not to come into a healthcare setting, or certainly the hospital, unless they had reached a certain point based on their own self-monitoring. But this made many people feel at sea. They may have felt sick, but they really didn’t know how sick they were and whether they should make the trip to a hospital, or just try to ride it out.
Dr. Tryggvi Thorgeirsson: Absolutely.
Daniel Eisenberg: I just wanted to shift gears a little bit and talk about the customer experience with Sidekick. One of the key attributes of what your programs offer is gamification. Can you talk a little bit about the origins of that approach, and how you think it helps with retention and engagement?
Dr. Tryggvi Thorgeirsson: So back in 2008, 2009, I was working as a clinician, as I said earlier. I really wanted to be able to approach things a little differently, so in 2010 I enrolled in a Master’s in Public Health (MPH) program at the Harvard School of Public Health, focusing on preventive medicine and public health. I felt we had so much research on questions such as, “What are the risk factors?” or, “Should we do this diet or that diet?” But in my view, we had so much less research on, “What are the behavioral methods to better help people change their habits and stick to their programs?” So I really focused on that question.
I had a fantastic mentor there, Professor Ichiro Kawachi, and with him, I looked into the field called “Behavioral Economics,” which combines psychology and economics to really explain the drivers behind our behavioral choices. We have these two different parts of the brain—the emotional, impulsive part, and then the rational part. While we definitely think we are quite rational beings, we really aren’t. In fact, some 80 percent of our choices are controlled by the emotional, impulsive—the “lizard brain,” if you will. So if we are going to help people, nudge them into better habits, we have to be able to talk to both sides of the brain. In my view, for decades many industries, whether food producers, advertisers, or computer games, have been talking to our impulsive, emotional brain centers, whereas healthcare has been a little bit more focused on our rational side, and losing that battle.
And doing better in that aspect of healthcare really became my passion. When I started exploring how I can use technology to deliver these types of interventions and use these behavioral principles, it was just so logical to look at the gaming industry, which really has mastered the art of high jacking our dopamine system to keep us engaged in their games. There’s just so many principles and tools from gaming that we can use, because in order to have a clinical impact, we have to be able to work with people for months on end.
So here in Iceland, we have had a great collaboration with this large global gaming company, CCP Games, known for the game EVE Online. They even gave us access to some of their developers to help us accelerate our specialized COVID program. We’ve been able to work with some great talent from that company, and others, to inject strong gaming elements into all of our programs. As a result, we’ve been able to see really fantastic, long-term engagement and retention numbers, which again is essential to be able to have a strong clinical impact.
Daniel Eisenberg: The behavioral economics field has taken on such prominence over the last couple of decades, whether it’s a better understanding of markets or consumer behavior, so it is interesting to see how you have incorporated that into your offerings.
How much of your product’s usage is smartphone or tablet as opposed to laptop or desktop? I ask that in part because smartphones, as I know from my own kids, have this dopamine effect, too, like gaming, even if they’re not being used for games. We are all to some extent constantly checking phones, so I would think that would actually really help with retention and engagement with your kind of product.
Dr. Tryggvi Thorgeirsson: That was a design decision we made precisely with this in mind, that we would focus on delivering our programs through smart devices. And that’s both, as you pointed out, due to retention and engagement, but also because of the sensors that are part of phones. For instance, our patients can use the phone’s camera to create a food journal. We use the GPS, the step-counter, and a host of sensors already in the phone for the programs. For the health care professional, of course, we have our care management portal accessed through a web.
The age of users of smart devices also happens to be going up. One of our more recent patient populations is in peripheral artery disease, where we have a median patient age of 72. So we definitely see patients up to 80-plus-years old are able to use technology if it’s designed for easy accessibility.
Daniel Eisenberg: I was going to actually ask you about your demographics. Do you have a good sense of the makeup of your customer base, in terms of age and gender?
Dr. Tryggvi Thorgeirsson: Well the biggest driver, of course, is the type of disease that we’re focusing on. In some diseases, we have younger adults, in others, it’s mostly over 65. I think our average user age is around 44.
There’s a slight majority of female users, and that’s what you see in any type of disease management program. We have to do a better job at engaging with male patients, and that’s in healthcare in general. Male patients often are a little bit too late to access preventive measures such as checkups. But that’s another part where gamification can really help.
Daniel Eisenberg: Let’s switch briefly to the regional view of your business and the sector. You’ve expanded meaningfully in Europe. How have you navigated the process of dealing with different regulations in various countries?
Dr. Tryggvi Thorgeirsson: Well, luckily, over the past years, many of these things have become more centralized. So you have obviously GDPR (General Data Protection Regulation) in Europe, and HIPAA (Health Insurance Portability and Accountability Act) privacy rules in the U.S., and of course, to be a serious player in this field, you have to have all of that covered.
And in many cases, there are definitely other considerations at the country level. That’s just part of the game. Maybe that’s one of the benefits of having European roots as a company. We have had to learn to do what we call country-hopping in Europe. We create a global-level program, which we work with global-level experts to create. But then when we go to an individual country, we work with local experts in that country, typically patient associations, physicians and nurses, and other experts, making sure that we comply with local and clinical guidelines, and, of course, regulatory compliance as needed.
We’ve created a process where we can do that pretty efficiently, going from one country to another. And that’s also another driver of retention engagement. The user has to see that this content is locally relevant. Just a small example: When we localized, going from Switzerland to Austria, we found out that we had to re-voice our videos so that we had voiceovers in a Swiss German versus Austrian German accent. Those small details can really have an impact on how relevant patients feel that the solution is for them.
Daniel Eisenberg: How do you see the European health tech scene evolving? And what do you view as future opportunities in the U.S. market?
Dr. Tryggvi Thorgeirsson: There are certain obvious big differences. In the U.S., you have the big self-insured employers, and of course, the private, large health insurers and providers.
And that comes with pros and cons. There is, to a certain degree, more agility in that system. Once those private payors decide to move fast, for example, they definitely can put a lot of weight behind that.
There are interesting developments happening within Europe, like with DiGA (digital health applications), and the whole Digital Health Care Act in Germany. So I just see interesting evolution happening on both sides.
Daniel Eisenberg: How much do you see competitors taking a gamification approach like Sidekick, and to what extent do you view them as a serious threat?
Dr. Tryggvi Thorgeirsson: We do believe we have quite a unique look and feel, and a unique approach really focusing on this. It’s one thing to inject or sprinkle a bit of gamification over a solution, versus truly designing it from the ground up, making sure that we are talking to the right brain centers, that we are using all the best practices in game design. To us, it’s always a balance of being a serious medical device, a serious player within healthcare, but also having that consumer-grade technology and game design as well.
So, yes, we feel pretty good about where we sit. We also have the breadth of the platform, being able to target so many different types of diseases very effectively. That’s another unique selling point that is quite important to our partners.
Daniel Eisenberg: Let’s talk briefly about your expansion journey. What were some of the barriers you faced in your efforts to scale, and any key lessons you learned along the way?
Dr. Tryggvi Thorgeirsson: It definitely takes time, and that’s where digital therapeutics are quite different from many other digital parts of the landscape.
I mean, to be able to really go to market with a solution like ours’, you have to have a large, robust platform. You have to have all of the compliance and regulatory issues handled very thoroughly. And you have to have robust clinical trials under the belt to prove that the solution is working.
And so you either have to have very strong funding from the get-go, or be able to build your way towards that. It wasn’t until we released our first clinical findings back in 2017 that things started to really ramp up for us. You have to have a great team, and very strong and patient investors who share your vision, and help you work your way towards that. And then you have to navigate towards a business model that you feel is scalable and makes sense to your technology and your approach.
Daniel Eisenberg: And were there things that surprised you? Anything that was either more difficult or easier than you had expected?
Dr. Tryggvi Thorgeirsson: I’d say there were not many things that were easier than I had expected. Building a company and finding your footing, growing and scaling is always going to be hard work, just blood, sweat, and tears throughout the whole journey.
But it’s incredibly enjoyable and rewarding, obviously, once you hit your stride and you start being able to grow. In our case, there were so many things that we’ve really wanted to do with a product that now, as we grow, we’re able to do more and more.
Daniel Eisenberg: Is there any particular advice you would give to early-stage entrepreneurs in your space, in terms of trying to scale and accelerate growth?
Dr. Tryggvi Thorgeirsson: Well, one essential thing is that you don’t get overly caught up in your technology. From day one, you need to think about your business model. It’s not enough to just have a really fantastic technology, a great product. You have to make sure that you are pretty clear on who’s going to be using it, who’s going to be paying for it, how, and what is the competition like? I think that you have to have strong passion for your product, but you need to make sure that you or your team jointly have a clear view on the path needed towards commercialization.
Daniel Eisenberg: You guys actually did a fundraising round during COVID. Were you able to meet in person with folks that were considering investing, or did everything have to be virtual?
Dr. Tryggvi Thorgeirsson: Yeah that was really interesting. We had just started fundraising when COVID hit. And in the opening weeks, there was obviously a kind of hesitancy, and people were leaning back, and thinking about what the impact was going to be. But then we saw that investors who are deep in this space actually leaned in. And they saw that in the medium to long-term, the demand for this kind of product is just going to accelerate.
As for the format, we didn’t meet our investors face to face until the absolutely final stages of the process, when everything was more or less clear. And so it was quite interesting how far you can go with this process completely remotely. We raised a $20 million round led by two new investors, Wellington Partners and Asabys Partners, joining our current investors, Frumtak Ventures and Novator Partners.
Daniel Eisenberg: Yeah, it will be interesting to see if that more remote approach, at least for the early parts of meetings and fundraising opportunities, if some of that lasts even after COVID?
Dr. Tryggvi Thorgeirsson: I’m hoping some of that will stick.
Daniel Eisenberg: Just a couple of last questions. You mentioned GDPR and HIPAA. How much of an issue has it been at all getting buy-in from consumers for a health tech product like yours’. Is there any hesitancy because of data privacy concerns?
Dr. Tryggvi Thorgeirsson: Well, I do think consumers are much more knowledgeable and guarded with respect to their data than they have been previously. And that’s good. So people like us need to be on our toes, making sure that we do everything completely right, and that we communicate that with our users.
I think this evolution has been really needed. And GDPR is a great framework, in my view. If we are doing it correctly, and if we convey that to users, then we have earned people’s trust, and that’s been our experience.
Daniel Eisenberg: Finally, when you look ahead for Sidekick, say, three to five years from now, do you have a vision of where you are at that point? And what you’ve achieved or are hoping to achieve within that timeframe?
Dr. Tryggvi Thorgeirsson: Yeah, well, in our view, in the next three to five years it’s not going to be acceptable anymore that people with a chronic condition leave their doctor’s office without a digital companion to help empower them and support them to actively participate in their treatment, and to remotely connect with a clinical team.
So we see this as being a completely integrated part of receiving care, that you can have a digital aide or two that optimize so many parts of your treatment. And our vision is to be a central global partner for that, impacting patients on a global scale, improving health and quality of life, and making better use of resources in the healthcare industry. And that’s what we’re working towards.
Daniel Eisenberg: Well, I think that’s a great final note on which to end. I want to thank you, Dr. Tryggvi Thorgeirsson of Sidekick Health, for joining us. It’s been a great conversation. I also want to thank our listeners for tuning in to McKinsey on Start-ups, and I hope you’ll return for future episodes.
