Healthcare is one of the top social and economic problems facing Americans today, as the rising cost of medical care and health insurance in the United States continues to significantly impact the livelihood of many of its citizens in one way or another.
America spends a dazzling $2.4 trillion annually on healthcare, 75% of which is estimated to go to chronic, largely preventable diseases like obesity, diabetes, smoking-related diseases, sleep disorders, stress and so on.
So what would happen if individuals were offered a financial incentive to improve their health, driving down the immense cost of the system down the line? HealthyWage is launching at TechCrunch50 today a way for people to take ownership over their own health and get rewarded up to $1000 for it in the process.
On the company’s website, people can register and complete a health risk assessment which identifies ways for them to improve their health. The individuals are then supposed to return to the website daily and enter specific data (e.g. what they ate, their activities throughout the day, drug compliance etc.) as part of their participation in a program created by Harvard physicians. After a year of participating in the program, successful consumers can earn up to $1000. Besides the direct financial incentive for them, they’d also be in better shape, which should result in a decline of health expenses over time.
First challenge that is seeing its debut on HealthyWage today: a BMI Challenge, designed to help people lose weight and get rewarded for it if they succeed. Overweight Americans or the companies they work for can put in $200 on the ‘bet’ that they’ll get to a certain BMI (Body Mass Index) and ‘lose’ all that money if it doesn’t pan out. If they achieve the targeted BMI – helped by friends and relatives and even their doctors through the system – they get their money back fivefold.
The company intends to make money not only off the ‘losers’ (people who pay to participate in the program but don’t actually complete the challenge successfully) but also from selling the (anonymous, aggregate) health history and daily health data to drug and food manufacturers, retail companies, healthcare providers, diet companies etc. and by running targeted advertising campaigns from these companies on their website.
This is definitely an intriguing (and potentially controversial) idea, and I can see this really taking off when employers start to see the benefit of offering such challenge programs to their workforce.
Expert panel Q&A:
Q – Tony Hsieh: I would do this at Zappos, we see healthcare costs rising. You may want to figure out how to separate the incentive from the need to logging in on a daily basis.
A: we’re open to ideas on how to reward people, cash or other prizes. The big idea is getting people in the habit of being mindful about their health, we tailor tips etc. It’s about wellness.
Q – Marc Andreessen: how do you translate it to a company’s bottom line?
A: A 20% or 30% decline based on our data.
Q – Marc Andreessen: do you have a sense of how much money is required to get people motivated to change their lifestyle?
A: Small amounts of money works, but it’s more about the support, the acknowledgement of the money.
Q: Why wait a whole year to pay people?
A: A year forced it to be a lifestyle change and not a short-term thing. We want to build a foundation, lead people to change their behavior long-term and keep their motviated.
Q – Marissa Mayer: I’m skeptic. There are tools for people who are already motivated, what’s to stop Weight Watchers for offering the same service?
A: their business model is different, focused on consumers, while we focus on companies/employers. In terms of addressable market, there’s a lot of room in the U.S. and incentives work. A program this comprehensive is unique in our view, and we’re confident people will embrace it.
Q – Roelof Botha: Mind that foreign health insurance companies are already implementing similar programs.
A: The U.S. is different, consumers are hesitant to participate if the program goes out from the health insurance companies, even if lower premiums are the incentive.
Video:
Pictures:
Extra coverage:
TC50: HealthyWage lets companies incentivize employees to stay fit VentureBeat.
HealthyWage.com Pays You To Be Healthy (TechCrunch50) SheBlogs.
TechCrunch50: HealthyWage Pays You to Stay Healthy Trends Updates.
HealthyWage Startup Generation.
HealthyWage Rewards You For Being Fit Pulse2.
HealthyWage Wants To Pay You To Get Fit #tc50 Techgeist.
How do they prevent fraud? It seems relatively simple to fake a BMI reading. Does a professional MD have to be involved?
What about a BM reading? Hello!
This seems like it could be a great idea. A lot of people need that little extra push and incentive to start working out and this will do just that!
same question about fraud ?
Good idea and good business model. Fraud, can be an issue (as raised by others).
Terrific idea. Simple – money drives incentive. A capitalist approach to getting people off there asses (which is the real health-care issue). Should take it one step further and micro finance the whole thing: cholesterol level, blood pressure, quiting butts, exercise time. GO ALL OUT – screw it!
The idea is wicked in the sense that you’d expect people to be intrinsically motivated to be healthy… but the world is different isn’t it
So I like the idea (and that it’s not just about weight watch) and I agree it doesn’t so much matter what $ amount is offered. A bit of social/community pressure would also help as this is another major drive for people to do (or not) things.
Any plans to go European?
The company’s own incentives are all wrong:
They’re supposed to be a force for good – helping you get in a better shape, but they only make money if you ‘lose’.
In other words, what’s good for them is bad for their customers, and vice versa.
Many health insurance companies are already supporting models like this. My health insurance, for one, has a healthy rewards program where I can get up to $650 for “being healthy.” I fear that this company can get steamrolled by the insurance companies if the model takes off…
Without physically meeting the user, one can never be sure if the user is faking. Are they planning to have physical meeting points? If yes, then how are they going to scale, being a startup?
Great concept. As a health site ourselves, I think the success hinges on execution and getting large employers to make it mandatory for their employees to get on wellness programs.
My company, Tangerine Wellness, has implemented a corporate weight management program that offers rewards for measured results for 5 years. The company is profitable and works with companies in 42 states (ranging from small employers to the Fortune 500). Incentives work, but the devil is in the details.
While I think the business plan is pretty genius in theory, it is offensive to me that this is where health care is headed. Money can’t be the only thing to motivate people who are overweight. Nor do I think this plan will be effective in lowering health care costs. One year? That is not long-term when it comes to lifestyle changes. Where’s the follow-up plan?
Very interesting article about this unique approach. Let’s hope the company is able to engage the millions who have or are at risk of developing type 2 diabetes, now epidemic, and inspire them to reverse their behavioral health risks. We should all wish them wild success.
We write extensively about related issues at http://dentistr...betics.com/blog, especially the links between elevated blood sugar and gum disease that can interfere with diabetes control and significantly increase risk of serious health events such as heart attack, stroke and blindness.
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Founder, Dentistry For Diabetics