Wellness Apps and Point Solutions - What's the point?

“Money can’t buy health, but I'd settle for a diamond-studded wheelchair”

- Dorothy Parker

Inundation without intention

During my time at a large, regional, integrated health insurance company my team was asked to inventory all vendor supplied programs, products, and apps – internally we referred to them as “point solutions.” The task proved never ending. When the list grew to close to 50 vendors across a dozen different departments we paused and asked “what are we trying to achieve with all of these?” No one in leadership seemed to have an answer.

With the huge influx of investment in health tech startups, the entry into healthcare by big tech and retailers, as well as the challenge to carriers and employers to “bend the cost curve” – there has been plenty of incentive for everyone to sell their wonderful “silver bullet” solutions to the healthcare industry.

This influx of products and programs claiming to reduce costs and improve outcomes go by many names. They are often positioned as wellness or navigation programs. In the self-funded market they are called point solutions. There is also a segment sometimes identified as quality improvement programs.

These vendor products and services are sold to insurance carriers, healthcare delivery organizations and self-funded employers and generally fall into four categories:

Condition management	Accessing care	Care beyond basic coverage	Keeping up with competitors
·   Diabetes ·   Neurologic ·   Obesity ·   Musculoskeletal ·   Mental health ·   Rx adherence	·   Navigation ·   Telehealth ·   Engagement ·   Education ·   Provider search ·   Cost estimation ·   Insurance help	·   IVF/ fertility ·   Sleep ·   Genomics ·   Digital therapies ·   Home monitoring ·   SDOH support ·   Self/ home health	·   Dental ·   Vision ·   Hearing ·   Naturopathy ·   Chiropractic ·   Acupuncture

Priorities drive choices

Payers, be they insurance companies or self-funded employers, focus their cost containment efforts on conditions that drive high cost claims and conditions that are widely prevalent. One high cost claim condition example is cardiac conditions requiring surgery or intervention. Widely prevalent conditions driving costs include diabetes and obesity. Unfortunately, if your product or service does not target either a high cost or highly prevalent condition you are likely to struggle to get anyone’s attention.

There are insurance carriers and self-funded employers who do offer programs and apps that just deliver consumer satisfaction without expecting much in return. I worked at a large corporation that offered the Virgin Pulse program to all employees. It was promoted as an employer workforce wellness program, with the goal of getting everyone more active. A points system was implemented with a year-end financial incentive offered to those who met a total points goal. Every employee I spoke with thought it was silly, ineffective and a waste of money by our employer. It was so easy to game the system and gather the require points. No doubt Virgin Pulse collected a healthy fee for providing their program to the 120,000 corporate employees. I don’t know what if there was an expected ROI on the program, but I very much doubt there was a positive one.

Proving efficacy

With market saturation comes buyer maturity. Proof of program outcomes and efficacy are now table stakes. The days of pitching a well-designed app to an insurance carrier or self-funded employer without outcomes data are over. With the underlying unit cost of care delivery rising post-COVID, there is little appetite to pay for “bright shiny objects” that don’t drive material outcomes.

One option for a new market entrant or start-up to get a foot in the door is to put financial skin in the game. Offering to take compensation based on meeting or exceeding an agreed upon metric is likely to garner more interest than merely pitching a fee per enrolled consumer or cost per head based on utilization. The large, incumbent vendors in the healthcare market almost all charge a fee per enrolled consumer regardless of utilization or outcomes. This allows them to offer very low fees, but also creates zero incentive for them to drive real outcomes or real engagement. And their performance often reflects that.

Lead with outcomes to a specific problem

Without an answer to the question “what are we trying to achieve?” answered by outcomes data - wellness apps, programs and point solutions are just more noise and expense in an already challenging business.

A good strategy for early stage companies is to run a demonstration pilot in your local market with a collaborative provider practice or employer to collect data, document outcomes and highlight opportunities. Many of the large, incumbent vendors in this space are resting on their laurels – creating opportunity for smaller companies that can prove they deliver value with a performance or outcomes based payment model.

Money can’t buy health, but that hasn’t stopped many healthcare businesses from throwing a lot of it at their many challenges, hoping for results as desirable as a diamond-studded wheelchair.

Copyright 2itive 2024

2itive is a Portland based consultancy founded by Erik Goodfriend, offering a unique combination of market intelligence, knowledge of healthcare payment systems and creative business strategy insights. Feel free to contact us at info@2itive.com