Incentivizing healthy behaviors in patients has been a difficult task for physicians, employers, and insurance companies alike. Insurance and employer wellness programs that provide positive opportunities to improve fitness and nutrition have had some success, but have had difficulty sustaining themselves. Humana, an insurance company with headquarters in Louisville, KY, has devised HumanaVitality to change the game in wellness incentives. We first heard of HumanaVitality from Stuart Slutzky, Chief of Product Innovation, at the 2013 Harvard Business School Healthcare Conference and were impressed by the program. HumanaVitality uses a novel online-based “Vitality Points” system to offer concrete rewards for being active, losing weight, and eating healthier. These rewards — movie tickets, brand-name merchandise, even hotel stays! — leverage the tremendous buying power of Humana to provide incentives that actually work for patients. The program has met with tremendous success, recently partnering with Walmart for a first-of-its-kind healthier food program.
We had a chance to speak with Stuart to get more of an in-depth look at HumanaVitality and its innovative rewards model.
Ravi Parikh, Medgadget: Could you give us a bit of your background about your career? How did you become involved with HumanaVitality?
Stuart Slutzky, HumanaVitality: I graduated college with a degree in Cellular & Molecular Biology but knew I didn’t want to become a doctor or researcher. I wanted to find a career that could allow me to apply my strong math and creative skills in a business setting. I decided to pursue actuarial science and was hired by Trustmark Insurance Company after passing my first actuarial exam. I worked for Trustmark for 3½ years while I passed actuarial exams and progressed well at the company. I knew though that I didn’t aspire to be a traditional actuary and wanted to work for a company that was an innovator.
In 1999, a friend of mine introduced me to an actuary that was relocating from South Africa to launch the U.S. expansion of Discovery, the global pioneer of consumer driven health plans and Vitality. I jumped at the chance to work for an innovative start-up with a proven global track record. Working for a small start-up gave me exposure to many aspects of an insurance company. We built a respectable insurance business which we ultimately decided to sell in 2007 due to competitive pressures from the major U.S. health plans as they launched their own consumer driven health plans and were able to leverage their much steeper provider discounts.
During this transition we saw a strong demand for a stand-alone wellness solution from the large consulting companies and employer market. We started selling our Vitality program to meet this demand. After a few years of strong growth we were presented with a great opportunity to take our deep experience and innovative model and partner with Humana given their dream of helping members achieve lifelong well-being. I joined HumanaVitality as part of the joint venture between Humana and Discovery as the head of product development and partner networks. We launched HumanaVitality externally in July of 2011 and have grown to over 2.6 million members in just the first 18 months.
Medgadget: How has HumanaVitality improved upon previous insurance models that have attempted to empower consumers?
Slutzky: HumanaVitality is a model that has been evolved globally for over 15 years. This experience has provided us with significant lessons about how to build a successful program.
Wellness solutions need to be carefully structured recognizing all of the elements needed to drive lasting behavioral change. An effective solution should incorporate behavioral, actuarial, and clinical science to motivate meaningful health improvement and cost savings.
Many people speak about behavioral economics with a typical focus on incentives. Although incentives are important, they aren’t the only area where behavioral economics should be incorporated. People also need to understand the impact of their lifestyle choices on their health today. Telling a 35 year old smoker that smoking will reduce their life expectancy by 10 years isn’t motivational since it’s too far in the future. However, telling them they are living 10 years older now than their actual age is extremely motivating. Vitality Age was created as the result of extensive research of over 32,000 published studies as well as Vitality’s proprietary data. The formula works very similar to mortality based (life insurance) underwriting where we measure the amount of increased risk that results from a member’s lifestyle choices. Vitality Age is a great motivational factor that also helps us prioritize goals and incentives for an individual as we can determine the actuarial impact of each risk on their underlying health.
A program also needs to be adapted based upon each individual’s lifestyle choices, health risks, and readiness to change to ensure it is relevant. HumanaVitality achieves this with a highly personalized approach with engagement and reward activities and support that are customized for each individual based upon data gathered from their health assessment, biometric screenings, and engagement history.
Members need affordable access to a support network to facilitate and verify engagement such as gym partners and biometric screenings. Verifiable results are critical to be able to actuarially justify the level of motivational rewards that it takes to drive long lasting change.
Incentives need to be intelligently designed to recognize what it takes to motivate different types of individuals (ex. Merchandise is more memorable than cash and provides ability for arbitrage as you negotiate discounts with scale). You want to maximize perceived value versus actual cost.
Members also need a strong social network to support their efforts both at work and at home. Wellness should be present to individuals no matter where they are. HumanaVitality includes executive support, strong communications and internal champions pushing wellness in the workplace and spousal and child inclusion to support wellness goals at home.
Medgadget: How do people respond to a point-based program? Do they keep track of and use their points regularly?
Slutzky: Point and status-based programs have been used for years and are well understood and desired by members. The airline industry recognized the motivational impact years ago and have been using their programs to significantly influence consumer behavior.
HumanaVitality takes these well understood principals and applies them in a wellness setting. We recognize that to get members to engage regularly the points need to be redeemable for relevant rewards. Some members like instant gratification and will redeem points for inexpensive rewards such as movie tickets or music downloads. Other members build up their rewards over time to save for bigger type prizes such as electronics or high cost fitness equipment.
We also recognize that people love to buy things on sale. A great example of this is the annual craze created on Black Friday. We embed this mindset into HumanaVitality by discounting the cost of merchandise on our mall based upon a member’s status. This provides an additional incentive for members to continually engage in HumanaVitality from year to year to increase their buying power within the mall.
Medgadget: Performance-based incentive schemes like HumanaVitality need to balance rewarding improvement vs. rewarding absolute benchmarks. For example, an obese individual has a lot more weight to lose than a moderately overweight individual, even though both may lose half their body fat. How do the point reimbursements reward absolute weight loss in pounds vs. percentage loss in weight?
Slutzky: Instead of providing members with a fixed program, regardless of their risks, we weight the incentives to be most impactful based upon the information that we gather from our health assessment and biometrics. As an example, we provide a healthy member with greater rewards for maintaining their health, often through increased exercise, proper nutrition and prevention.
For a member with significant health risks we provide greater rewards for things like smoking cessation, completing a digital coaching program, and complying with a health management program. This approach to total population management ensures that we keep healthy members healthy while improving the health of the sick.
Members earn points for receiving biometric screenings and additional points if their outcomes are in a healthy range. Members with out-of-range outcomes, such as weight, blood pressure, blood glucose, and cholesterol, are given extra points for completing goals that improve these risk factors. The number of points awarded for goal achievement varies for each individual and is by determined based upon the impact of that goal on the member’s health.
We focus on small steps that build up to long lasting change. As an example, an obese member may be given additional points to lose 13 pounds in 3 months. Once that member achieves their goal, and their weight loss is verified, we provide them with a new goal to build upon their success. We find this approach to be more motivational to members as the outcomes are attainable in a reasonable period of time so as to not result in them feeling discouraged or helpless.
Medgadget: Through what platforms (web, mobile, etc) can people access their points and use their rewards?
Slutzky: We vary our platforms based upon the needs and engagement preference of our members. Our commercial members, below age 65, are provided with a robust website which provides broad support for the program including the ability to redeem points at our diverse online mall. We supplement our website for our Medicare members with an offline experience that allows them to mimic every aspect of the program including a rewards catalog as we recognize many of these members lack web access. We use mobile applications to supplement various aspects of our program that benefit from continuous and remote accessibility, such as activity tracking.
Medgadget: What types of organizations does HumanaVitality partner with to offer rewards?
Slutzky: Incentives need to be intelligently designed to recognize what it takes to motivate different types of individuals. Some members spend points frequently for low cost rewards and others prefer to save their points for bigger ticket items. Members are also drawn to specific brands which provide increased perceived and trophy value. We partner with a range of companies to ensure we provide flexibility to meet our varying member interests. A few of our current partners for point redemptions include Amazon.com, Apple, Fitbit, Polar and Under Armour.
HumanaVitality also provides access to a network of partners where members receive discounts on goods and services that support their health improvement goals. These partners include Walmart where members receive a savings on healthy “Great For You” foods, Seattle Sutton for home delivered healthy meals, and our partner health club network that provide discounted access to thousands of gyms nationwide.
Medgadget: What do you think is the future of incentive-based insurance programs such as HumanaVitality under a changing health care environment?
Slutzky: The future for incentive-based programs such as HumanaVitality is bright. The changing health care environment is putting a greater pressure on insurance companies to reduce costs and build a more supportive and trusting relationship with their members. Our extensive experience and data highlights the positive savings that can be achieved by HumanaVitality. The unprecedented growth of HumanaVitality, 2.6 million members in 18 months, demonstrates Humana’s commitment to the model as the company prepares for health care reform.
HumanaVitality and its incentive-based system could set the standard for insurance companies putting wellness choices in patient hands. As a future physician, this comes as a welcome trend. I can’t wait to see how wellness incentive programs evolve!
Product page: HumanaVitality…
