Can Wearable Fitness Devices Lower Healthcare Costs?

Businesses have been trying to crack the corporate wellness code for years to no avail. The below article published on www.crains.com speaks to what possibly could be a positive trend for wellness and healthcare costs.

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 A study by a healthcare analytics firm that tracks corporate wellness efforts found that employees using wearable fitness monitoring devices had lower healthcare costs over a two-year period.

Indianapolis-based Springbuk Inc. evaluated medical-related claims of those using the devices at a healthcare company with 20,000 employees. The study comes at a time when most of the nation’s large health insurers have or are about to offer discounts to employees and employers using such devices. From an employer’s perspective, they may be most valuable in motivating healthy lifestyles among employees who are at higher risk of incurring substantial medical claims.

“The analysis shows that after two years, employees who opt-in to the wearable program cost on average $1,292 less than employees in the control group,” said Phil Daniels, co-founder and vice president of Springbuk.

That amounted to a 46 percent cost reduction for those using wearable devices at the company. Springbuk did not identify the employer but said it is in the healthcare industry and has an active wellness program that includes the option to use Fitbit devices.

Such wearable devices, from an increasing number of manufacturers, monitor activity such as heart rates and the number of steps walked.

ABI Research in late 2013 estimated that more than 13 million wearable devices with embedded wireless connectivity could be integrated into employer wellness plans by 2018.

Lots of devices, lots of questions

Use of such devices – including those from Apple, Google and Samsung – is still small relative to the overall population. Just 1 to 2 percent of individuals in the U.S. have used them, but annual sales could hit $50 billion in 2018, according to data cited in a study last year by physicians at the Philadelphia VA Medical Center at the University of Pennsylvania.

Currently, those who wear them tend to be young, early adopter-types and not necessarily those who need them most: older, less-healthy populations. The study suggests that affordability of such devices – some starting at around $100 – will be a determinant in usage, though increasingly insurers or employers are picking up part or all of the cost.

Wearables have the potential to engage “less motivated” individuals, according to the study.

“Some of these devices may justify that promise, but less because of their technology and more because of the behavioral change strategies that can be designed around them,” the study reported.

Data from wearables has become an exciting new stream of information for companies like Springbuk, which helps some of the nation’s largest employers find ways to reduce healthcare costs through efforts such as wellness programs.

About 500 companies use Springbuk’s health analytics platform, which assembles and analyzes disparate sources of data. Grouping employees’ medical claims and pharmacy and lab records into a dashboard for employers to view helps model and predict future healthcare costs and take steps to reduce them.

There’s still more that can be learned from data captured from wearable devices, Daniels said.

“Does taking, say, 10,000 steps a day actually matter? Does it lower obesity rates?” he asked.

Answering such questions is key in helping employers justify expenses for wellness programs, let alone help them get a grip on ever-rising healthcare costs.

So far, “We really view wearable devices as just one more piece of the wellness concept,” Daniels said. “For us, this wearable piece is one more data stream.”

Insurer, employer rollout

Insurers and employers have been slowly gaining experience with the devices.

Last March, Minnetonka, Minn.-based UnitedHealthcare and San Diego-basedQualcomm Life rolled out the “Motion” wearable device. It’s now used in UnitedHealthcare wellness programs offered to about 120,000 people in over 40 states.

Workers and spouses covered under the plans can earn up to $1,460 per year toward their health savings accounts if they reach certain fitness goals. They may earn a smaller amount, however, if they hit some of the goals. That’s important, as some research has shown employees doubtful about fulfilling a heath goal may simply give up entirely.

UnitedHealthcare also caps the amount at which an employer’s health insurance premiums rise each year if employees achieve certain goals.

Craig Hankins, vice president of digital products at UnitedHealthcare, said the insurer applied a great deal of clinical analysis in developing those targets, looking at factors such “frequency, intensity and tenacity” of fitness exercises.

That means participating employees not only had to take so many steps per day – say 10,000 – but also keep heart rates up throughout the day to produce meaningful health benefits.

The Qualcomm device was designed to provide “nudges” throughout the day, in some cases buzzing to remind folks to get moving.

“People need that nudge. They get busy,” said Hankins, who himself wears one. “This was a program that was developed over a couple of years, with a lot of thought.”

Most all other major health insurers have devices as well. One of the earliest efforts was that of Indianapolis-based Anthem Inc., which began wearable device implementation four years ago. It has relationships with several wearable device companies and offers discounts to health plan members for wearables from Fitbit and Garmin.

Anthem piloted fitness tracker engagement with its own employees in 2012.

“We found that our own associates who had a chronic disease or were at risk of a chronic disease and used the Fitbit tracker for a period of six months experienced increased activity levels and weight loss,” said Anthem spokeswoman Geraldine Rodriguez.

The devices by themselves, however, weren’t the only component in positive health results.

“We did learn that coaching support and incorporating reinforcement strategies was instrumental in its success,” Rodriguez added.

“As a result, we determined it would be best offered through our disease management programs.”

Devices alone not the answer

Anthem may be on to something.

A University of Pittsburgh study published last month involving more than 400 people over a two-year period found that while those using a wearable device lost 7.7 pounds, those who received traditional counseling lost 13 pounds.

“Devices that monitor and provide feedback on physical activity may not offer an advantage over standard behavioral weight loss approaches,” authors stated in the study published in The Journal of the American Medical Association.

Both test groups had “significant” improvements in fitness, physical activity, body composition and diet, however.

UnitedHealthcare said it still needs more time to study patient experiences with the wearable devices. So far, about 60 percent of individuals at employers offering the devices have at least registered them, the company said.

“It’s about getting to: ‘How does it work and what do we need to understand about how people interact with it?’” Hankins said. “The early indications are promising.”