Future Now
The IFTF Blog
More on the financial rewards of health and wellness
In a post earlier this week, Bradley wrote about the launch of a company called HealthyWages, which pays people to lose weight. Part of their business plan involves marketing their services to corporate clients who can use the platform for corporate wellness programs. RedBrick Health is already playing in this space.
Founded in 2006, RedBrick "combines behavior-based health financing with personalized programs and independent advocates, helping self-insured, Fortune 1000 companies and their employees experience all the rewards of better health." In May, Target announced its partnership with RedBrick to implement a pilot wellness program that offers employees the incentive of cold, hard cash (well, really it is a plastic Visa debit card) for taking steps to improve their health. For example, participants receive $25 for undergoing a biometrics screening, filling out a health-risk assessment and registering for the program online. Participants are then rewarded $50 per quarter for following the personalized health plan they receive. An annual preventive care visit to a doctor earns an employee an additional $25.
According to one report, this strategy has been successful for Target because the company marketed it to its young employees, who seem to respond particularly well to cash incentives. Watson Wyatt consultant Shelly Wolff explains, "'Younger workers . . . like cash or cash equivalents. Many more young people are hand-to-mouth so cash weighs more heavily than discounting healthcare premiums.'"
RedBrick's program, the Health Earnings System, does that, too. Much like a good driver discount, employees' health premiums are based on their behavior. Or as RedBrick puts it, "we work with employers to create and administer a financing framework where an individual's share of health care cost depends on how they engage in their health."
The investment world has responded well to this approach. In April, RedBrick raised $15 million in its third round of financing. The good behavior premium discount model found favor with Kleiner Perkins, the lead investor. Quoted here, Kleiner partner Beth Seidenberg, M.D., explained, "What we look for is big trends in industries where we think innovation can have an impact, and that's how we saw this company." Sounds like behavioral economics is hot in health care!