Wellness is Dead — Part II
US Employers have historically provided health care insurance for one main reason: It is a tax-free benefit that is powerful in retaining employees. This is expected to change as the Affordable Care Act supplies cheaper and more personalized options.
The CBO predicts 5 million people will opt to have health care provided by the government rather than their employer in 2016. This number is expected to reach 11 million by 2020 as the public’s trust in the insurance exchange market grows.
I threw these figures at Josh Stevens, CEO of Keas, a company that focused on the health management of America’s biggest employers.
In part I of this interview, we discussed how Keas aims to be the solution to the employer benefit’s fragmentation issue, while walking up San Francisco’s downtown hills.
The Quest for a Better Experience
We were now in Josh’s hybrid car, driving back to the office, with the blessing of the A/C cooling us down from our unintended workout.
“Whether you get your plan from your employer or the exchange, you still have to go to all these different places. So there are all these spokes that hold the promise of health care technology such as telemedicine, symptom trackers and transparency, but it’s still a terrible customer experience,” Josh told me.
“Keas can provide a solution of CRM and integration to access this whole basket of loosely aggregated tools that are becoming available. We see the insurance exchange as our future go to market strategy, where we can solve their fragmentation problems. We’ve already talked to some of them and they love it.”
“To be clear we don’t tell our users where to purchase their health plans from.”
Incentives & The Holy Grail
Facing the traffic jam on Montgomery St., Josh was growing concerned that he’d be late for a client meeting. I, on the other hand, was thrilled to be holding the CEO captive in his own car. I took the chance and asked him what the biggest opportunity was in the corporate health space.
“If you use a Health Spending account it is not customized around your own health risk and tax-free benefits of that money,” he replied calmly.
“So the opportunity is to say here are the risks you have, these are the activities you should do and really line them up with the incentives, so you can have more money in the HSA and that becomes a motivating tool.”
At that point, I confronted Josh with my feelings towards Keas as a motivator: “ You know Josh, I don’t know how Keas helped my health but I was happy about the Amazon gift card I won. Do you think that is a sustainable way of incentivizing employees?”
“The incentive design has to be more thoughtful than Amazon gift cards, which are a short term Band-Aid for doing tasks. We see the trend in incentives as consumers go to CDHP, they’re raising the deductibles, which is burdening the employee to figure out how to spend that money wisely.”
He explained that giving them opportunities to lower their deductible by doing health activities, would be a sustainable incentive if it’s a structured, year round program.”
“For example, let’s suppose you are at risk as a pre-diabetic and we know that you need to maintain your weight. Someone has to be helping you everyday manage what you are eating and offer motivations intrinsically in terms of community, or extrinsic incentives such as adding a $100 every month to your HSA.”
Engagement or Outcomes?
Maybe those incentives would drive engagement. But the physician in me wanted outcomes, and it seemed counterintuitive to engage everyone with no results rather than to engage a small population and improve its health significantly. Josh gave me a compelling counter-argument.
“20% of the population drives 80% of the cost. However, this 20% of employees changes every year. If we focus on one group of people we will miss the next cohort that will be driving cost. So we actually need to do both and it all starts with having all the data at one place. There is very little loyalty to one health plan or direction to better health.”
The Bridge to Reality
Having spent three months analyzing outcomes for the coaching programs, I know that Keas’ results aren’t as glamorous as Josh’s vision for a brave new health care, at least not yet. The data files Keas receives from vendors have their own fragmentation issues and there’s still a huge industry gap in understanding what it means to create engagement and measure outcomes.
Keas has an all star team backed by $33 million in 4 rounds of investment. They have already shown successful employee engagement in the space, and I think some of their hurdles can be attributed to an organizational emphasis on customer success.
Life is Many Different Shades of Grey
The start-up mantra is to listen to your customers and build what they need. But what if your customer is part of the problem in the bigger picture? Maintaining relationships with customers is vital to any business, but should it be directing where the innovation is going and how the reporting is done?
My best guess is that if these companies focused on building an interoperable system, they would lead the US health care as a whole towards what it needs, as opposed to building towards one customer’s bias and ultimately adding to the fragmentation problem.
Either way, the employer wellness space is changing rapidly, and since most Americans are currently insured through their work, digital integrative platforms such as Keas have a tremendous opportunity to be remembered as the companies that brought the bits and pieces of US health care together.
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.