This year’s Health 2.0 brings another wave of big launches of “consumer healthcare” companies. ShareCare is probably the biggest healthcare web site launch in recent memory, covered by CNN, NYTimes, and Oprah. Castlight is another huge launch backed by $60M of VC money. Everyone seems to be expecting a billion dollar company coming out of consumer healthcare. It is certainly great to see so much commercial activities around Health 2.0. But how about the high profile consumer healthcare companies launched at last year’s Health 2.0?
Well … some of them are no longer in business (e.g., polka), and the remaining have, for most part re-focused on the “enterprise software” model (e.g. Keas, TheCarrot, and several others). The “enterprise model” is to white label the product to insurance carriers or employer payers as wellness modules. But that begs the question: if a product cannot get consumer traction on it’s own, why would payers want to white label it? The key to effective corporate wellness programs is a high level of employee participation. It is true that some carefully designed wellness programs saved money (like Safeway), but for most companies, it is just something that comes bundled with health insurance, which they have to buy. For a lot of payers / employers we talked to, wellness is just window dressing. In fact, only around 10% of employers even bother to measure the ROI of their existing wellness programs. So, why would they pay extra money to get another solution that probably would not work?
So, why are wellness programs largely ineffective? That is because they are tackling a very hard problem: Human Behavior Change.
Behavior change is the billion dollar question in healthcare, and is the basic value proposition for most consumer healthcare / wellness products. So far, no one has even come close to solve it. Last year’s health 2.0 companies were hot on ODL (Observation of Daily Living) and patient journals. But truth to be told, people who have the will power to keep a food journal probably already live pretty healthy. In Health 2.0, people like to talk that they want to be the mint.com of health information. Yet, mint.com has not demonstrated that it can change people’s behavior when it comes to financial decisions. It just happens to be a company that had a good exit. Information (user generated or provider generated) + analytics alone do not seem to provide the magic formula for changing consumer behavior in either health or financial sectors.
In this year’s Health 2.0, the hot approach is to drive change via social games and high definition video “coaching”. Again, most companies in those two spaces are looking to sell to “corporate wellness programs”. I actually do like the social game angle, and some preliminary research has shown that it might work. But the jury is still out. Ringful is innovating with other companies in this space. We will have a more definitely answer next year.
At Ringful, our approach is to work with existing healthcare providers to support better decision making on the parts of both patients and physicians. We incorporate evidence-based guidelines, and put the doctor inside the feedback loop. We believe that this is an effective approach (Well, Keas sort of experimented with this as well. But I do not believe they have gone far enough). Indeed, a recent PwC survey indicates 40% Americans are interested in paying for personal healthcare applications to communicate with their doctors. (Chilmark Research has an excellent writeup on this survey).
So, if you are a physician or hospital, we’d love to partner with you to make our personal healthcare apps work for your patients and for your practice!