Wellness is Dead – Part I
“Wellness is dead, and it doesn’t matter if I believe that or not, but the pervasive perception is that wellness is not effective. Many companies have put in lots of money into programs for which they haven’t been able to measure results, or receive fair value for the product.” Josh Stevens, CEO of Keas, explained as we trekked up the steep hills of California Street in San Francisco.
It was quite surprising to listen to the brutal honesty of the CEO of Keas, a corporate wellness online tool recently re-birthed as an integrated health management platform.
Keas works with some major US employers including Pfizer, Salesforce, and Safeway to name a few. We paused mid-voyage to pick up coffee and as we kept climbing, he explained why these colossal clients signed up with Keas even after wellness companies such as StayWell and Healthways had miserably failed following 20-year-long relationships.
From Desktop to Workout
“We are one of the tech companies that entered the space and asked ourselves: ‘How do we take this old model of health fairs, gym memberships and nurse hotlines and turn that into an online set of tools that educates employees about health, tracks their activities and integrates with their benefits?’”
This unexpected hiking interview with the sharp CEO was a small fraction of the physical activity Keas coaxed me into doing during my three-month internship. Besides the data visualization and reporting work I did, I was also a Keas platform user myself along with the other employees.
I was sweating profusely as I felt the caffeine rushing through my brain and my calves working hard to carry my body diagonally against the amplified power of gravity on Nob Hill.
“You’ll reach your step goal,” Josh stated. The guy looked pretty fit for a father of three, and yet we were both wheezing our lungs out by then.
“Too bad I’m not counting,” I said, agitated but wishing I had owned a Fitbit at that moment.
What do Employers Need Anyway?
Gasping for breath, I managed to craft my next question, which was about what return Keas clients expected from implementing their technology.
“The biggest challenge is engagement, which is vaguely defined… so no one is satisfied with it. The second challenge is cost reduction. There are some cases where you see it, but it is not consistent. Another thing is risk reduction, which has to precede cost reduction. There are only three ways to reduce healthcare costs: cut people, cut benefits or lower risks. In theory, if you drive engagement you should be able to improve risk and lower costs, without having to cut people unnecessarily.”
The Opportunity in Fragmentation
‘So which of these have you accomplished at Keas?’ I asked, hoping for a definite answer I could poke holes through. Instead, the conversation transcended to his bigger vision.
“The problem we are trying to solve is fragmentation. The average employer in America with health benefits has 12 different health vendors. That means that benefits, health plans, spending accounts, wellness, biometrics and all other pieces of the puzzle are in different places!” He said enthusiastically, his tone resonating with the excitement of the start-up’s opportunity.
Being a Hub For Many Spokes
“These different health vendors do not speak to each other and then the employer complains that these solutions did not deliver enough engagement or values. How would that happen without solving for fragmentation? Our solution was not to create a technology that delivers healthcare but that integrates all these healthcare services together into one solution.”
What Josh was explaining was called the Hub-and-spoke business model, whereby providing the integration between those different spokes for free, and bringing in immense value, you can charge a bigger one time licensing fee. Pretty smart. Despite seeming so simple on the surface turns out it’s no easy feat.
A Surprising Educational Obstacle
If benefits utilization was that simple and there were millions of dollars of ROI on the line, why didn’t employers just invest in the IT skills to do so? Why wasn’t integration worked on earlier?
As it turns out, the technical obstacle is only half the story.
“The biggest challenge seems to be that most employers don’t realize that they actually own the data, and were being charged up to 75k for what they already own.”
“Are you crazy?!” Josh and his team would say to their clients as they explained that the ‘hard work’ done by the vendors was building a data extract and sending an FTP file
Just as I planned to throw a curve ball at Josh and ask him about their strategy with the eventual shift of employees buying plans from employers to the insurance exchanges, we had arrived at our destination: The University Club.
Keas held its Customer Advisory Board two days ago here, and I waited in the lobby while Josh gathered his belongings upstairs.
An Employee’s Perspective
As I browsed the elegant and historic club’s hallway pictures of bizarre royal alumni from the 19th century, I couldn’t stop feeling that I was out-of-shape for a 27 year-old. Everything Josh had explained to me so far made sense, but in 3 months Keas didn’t seem to have helped me improve my own health.
Still, I was engaged on the platform taking Keas quizzes, though I only did because I felt obligated to my teammates who were relying on me for my Keas points. It was all because of a little gift box we had on the top of our screens that we badly wanted to open. And we eventually did.
It seemed like I was motivated by how my peers would view me and not by my actual desire to be healthy. It is interesting how we solve these problems as we learn more about the brain’s psychology.
One thing was for sure— hiking/interviewing with Josh was the most excruciating exercise I’ve had all month.
In the second part of this article, I take a deep dive with Josh into Keas’s strategy in working with the Affordable Care Act (ACA), and their plans for a meaningful incentive system.
Omar Shaker completed medical school in Egypt, followed by internships in the US. He soon left primary care for the world of digital health, moving to San Francisco to work on his own projects. These posts represent his reflections on a series of interviews he conducted with some of the more exciting entrepreneurs working in digital health today. Omar can be reached at email@example.com.