Friday, September 30, 2016
While media reports imply that this is one more step toward a Manifest Destiny of scaling healthful behaviors to lower U.S. healthcare costs, the Population Health Blog is more sanguine:
1. The impact of wellness programs - exercise promotion, healthy eating and lifestyle management - on short term health insurance claims expense is highly variable. There's lots of peer reviewed literature like this that shows "fitness" is not a healthcare money-saving slam dunk.
2. In addition, wellness programs are far more likely to be successful if they are tailored, multi-modal and sustained over time. Kudos to Aetna, which linked the smartwatch to a broader employee wellness program that probably meets that gold standard. As for the "other customers," the PHB doubts that the one-time provision of a wrist gadget will do anything to mitigate their healthcare costs.
3. It is the conceit of today's Silicon Valley Robber Barons to think that no problem is immune to their business models. Just like Carnegie and Rockefeller, the Gates and Zuckerbergs seem to believe that but for (their) information technology, the world could be a better place. Apple's executives can't be blamed for its "features to help our customers live a healthy life" hype.
4. But even if some of Apple's executives are immune to the hype, their marketing department undoubtedly understands that "cause related" appeals to societal fitness builds brand. Plus, if the earned media helps deflect attention away from Apple's lackluster stock price and Aetna's other travails, all the better.
5. It's difficult to know for sure, but the PHB doubts that Aetna is deploying any of its customers' premium to underwrite their cost for the Apple smartwatches. Rather, this is far more likely to be a group purchasing discount in which Apple agrees to less margin in exchange for a bulk purchase. That's probably also part of the math for the Aetna employees, with the rest of the economics of the wellness program simply being part of Aetna's administrative overhead.
Nonetheless, the PHB is intrigued by the downstream possibilities of a Wintel-like alliance between a major commercial health insurer and a major information technology company. What's described above is small potatoes compared to the larger possibilities of data sharing*, big-data analytics, co-branding, mutual investments, joint ventures and administrative combinations.
Think Aepple. You read it here first.
*After this post was published, this news report came out.