In a perfect world, says Glen Tullman, the co-founder of Livongo, digitally based health care services like his would operate the way Netflix or Amazon does: deliver on demand, and use data analytics to anticipate what's needed and improve customer service. "When we ask people about their diabetes or hypertension, they say, 'We just want to live our lives. Make it go away,' " says Tullman, who has a son who has diabetes.

A worthy goal for Livongo, which filed for a public offering on June 28 that could value the business at more than $2 billion. The company makes a blood-glucose meter that's used by 120,000 diabetes patients to instantly upload their blood sugar data to Livongo's analytic engine. Livongo has also introduced a cellphone-enabled, cuff-to-cloud blood-pressure device for people with hypertension, as well as a wireless-enabled scale.

All that data is why patients pay nothing for the equipment, test strips, and even medications, while Livongo applies big-data analytics to help them better manage their disease. And if Livongo's users' blood sugar tests outside normal parameters, they can expect a call or text within 90 seconds from a diabetes consultant to assess the situation and suggest next steps--which could range from taking a walk to calling the doctor--or to offer a few encouraging words. Patients can also contact Livongo 24/7 to speak with counselors to guide them to healthier behaviors. Revenue comes from client companies like Amazon and Target, which pay Livongo $65-to-$75 a month for each affected employee it monitors.

But the bigger idea animating Livongo is how it uses AI to continuously analyze its devices' data, plus everything else the system knows about its patients. By doing so, it's searching for patterns and discoveries across the population--potentially incredibly valuable insights--while delivering increasingly personalized advice. As Livongo agglomerates all that data, this feedback loop--what Livongo calls an "AI+AI applied health signals" platform--refines such advice, and adjusts it as needed.

"We collect medical and pharmacy claims, but also the social determinants of health: Where are you grocery shopping? What is your commute time? Gym utilization?" says Jennifer Schneider, Livongo's president. "This is very personal advice, which drives clinical outcomes." In one pilot at a Chicago hospital, diabetics who followed Livongo's program noticeably lowered their glucose levels, had a 17 percent reduction in diabetes-related medical costs, an 11 percent drop in all medical claims, and 21 percent fewer ER visits.

Chronic illnesses account for 70 percent of the nation's $3.5 trillion in health care costs, so Livongo has many other potential targets: arthritis, COPD, Crohn's disease. Because, in the evolving digital health care world, patients may not need a doctor or an ER for many medical issues. Maybe they just need a connected device and some well-timed advice.

From the May 2019 issue of Inc. magazine