Wellness-management startups are seeing success because they’re scaling through a channel that actually has money to spend: the enterprise.
Although investment in digital health startups is up and exciting technologies are on the horizon, scaling and distribution remain a challenge for health care startups. There are barriers for any company that attempts to modify the way people get health care, but convincing customers to come along for the ride is an especially significant hurdle. In short, pure consumer plays in health care are historically hard to get going.
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From a macro perspective, several trends are combining to make workplace wellness an especially smart business bet. Chronic disease is shifting to affect younger people who are still participating in the labor market. Simultaneously, the workforce as a whole is aging, bringing age-related health concerns to the fore. Noncommunicable disease is spreading (cancer, cardiovascular, diabetes, etc.), while many countries’ economies are expanding and demand for human capital is on the rise.
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And these trends will cost huge amounts of money. For example, worker absenteeism or underperformance is expected to lead to trillions of dollars in productivity losses over the next 20 years. Of that total, mental health issues account for $1.6 trillion and cardiovascular disease for $389 billion.
The World Economic Forum dubbed workplace wellness one of its core priorities, since preserving worker productivity is vital to worldwide economic development. Their alliance boasts global partners like Accenture, Kaiser Permanente, GE, and Microsoft.
That gives a lot of global momentum that startups can start to tap into.
In the U.S., the Accountable Care Act will enable insurance companies to directly reimburse wellness programs at a higher rate than ever before. About 50 percent of employers now offer workers incentives to boost their health. Insurers and companies alike are shelling out substantial sums in an effort to increase productivity and cut their own health care costs.
How workplace wellness startups can help
Workplace wellness schemes are usually designed to target specific behaviors, like encouraging exercise or helping employees quit smoking.
But robust efficacy studies are rare and a recent survey reported that more than half of employers could not identify their wellness program’s return on investment.
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Although ROI related to employee wellness programs remains elusive, the industry has predictably evolved to include more tech-enabled wellness management tools.
For individuals, health- and activity-monitoring gadgets can be quite effective. For example, Al Lewis, care management expert and Wall Street Journal contributor, recently wrote of his success using these devices:
The innate ability of personal tracking devices is the industry’s best hope for future success. I even wear one, to see how well I sleep at night vs. how much Ambien I take. As a result, I’ve cut back 33 percent.
Wellness companies like Keas and ShapeUp use this kind of technology to engage users on their own terms. These companies believe ongoing participation in your own health will eventually lead to positive behavior change and sustainable cost savings.
Keas CEO John Stevens claims his products are most effective when embedded within a company culture that supports wellness. Rather than a line item on a spreadsheet, a workplace wellness initiative requires serious monetary and cultural commitment from C-suite executives.
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According to ShapeUp CEO Dr. Rajiv Kumar, “Companies are spending real dollars on employee wellness programs,” but the industry is still in its infancy. One third of a working individual’s life is spent in an office and the startup has found their “B2B2C” approach to be highly effective.
Companies like Jiff have a different take. In addition to building its own wellness programs, the startup’s platform aggregates and vets the 15,000 medical apps on the market today. It has also partnered with professional services firm Towers Watson to channel its offerings to Towers’ existing client base, comprised of the world’s top employers.
The growth of startups like Keas, Jiff, and ShapeUp represent a step toward achieving the World Economic Forum’s vision for a private sector-led movement for controlling the spread of noncommunicable disease, increasing worker productivity, and cutting health costs.
Not to mention the sizable market opportunity for startups keen to follow the money and build sustainable businesses in digital health.
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