Incentivizing healthy living

Health Finance Institute
5 min readJun 16, 2021

Wellness-linked insurance harnesses the potential to save lives and money, globally

Noncommunicable diseases (NCDs) are not only the deadliest diseases in the world — leading to over 40 million global deaths per year — but also some of the most expensive due to their chronic nature. If we continue with business as usual, NCDs will cost the global economy nearly $50 trillion in the next 20 years. Emerging health insurance models focused on wellness and prevention could reduce these costs and avert millions of new NCD cases and deaths.

Wellness-linked insurance programs offer members incentives to engage in healthy behaviors such as discounts on healthy food, personal care items, and gym memberships. The programs also offer rewards to members who meet their healthy lifestyle goals, including discounted premiums and gift vouchers for a variety of small items including healthy smoothies and coffees. These discounts and rewards increase in value as members continue to meet their goals, incentivizing the continuation of healthy behavior and lifestyle changes. Additionally, wellness-linked insurance programs offer fitness device payback programs, which increase the ability to track members’ activity levels and the accuracy of health data collected by the insurance company.

Early iterations of wellness-linked insurance models focused on some of the most prominent health risk factors, such as offering discounts to customers who quit tobacco use — a risk factor for both cancer and cardiovascular disease. Initial successes demonstrated wellness-linked insurance programs led to improved health outcomes for individuals and lower benefit payments for insurers. Over time this model has expanded to include other risk factor reduction techniques, including regular wellness assessments in the workplace, tobacco cessation initiatives, and mindfulness and physical exercise training.

These models show great promise in reducing healthcare costs and improving health outcomes. This is particularly true for NCDs, which require ongoing treatment and monitoring and can result in complications that are dangerous to the patient’s health and expensive to treat from both provider and patient perspectives. Not only are healthcare costs much higher for people with NCDs, but the total cost to society is even greater when considering indirect costs such as lost productivity and days of missed work for patients undergoing care or experiencing complications. It is estimated that the WHO’s “Best Buys” list of interventions for the prevention and control of NCDs could have returns of more than seven times the initial investment when including both direct and indirect costs. The Best Buy interventions have significant overlap with the goals of most wellness-linked insurance programs: reducing NCD risk factors, increasing physical activity, and encouraging healthier diets. Improving care for those with NCDs is, of course, hugely important, however, the most cost-effective way to deal with the issue is to stop preventable NCDs from developing in the first place.

Implementing cost-effective health care is crucial to achieving Universal Health Coverage (UHC). UHC aims for individuals to have access to high-quality health services without suffering financial hardships. NCD preventive measures, in particular, meet this goal because they lead to better health outcomes with low upfront costs. More so, they prevent the onset of expensive medical complications that cause financial hardship. Another promising UHC policy is publicly financed health insurance with mandatory participation. These insurance programs offer a promising avenue for promoting access to care and financial protection for the poor. Therefore, governments should consider offering elements of wellness-linked initiatives to achieve UHC.

Wellness-linked insurance initiatives present themselves as a promising inclusion for UHC because they harness the power of digital data tracking for monitoring and improving population health. There’s a growing body of evidence showing that wearable devices are useful in tracking and treating a variety of health conditions, including some NCDs. For example, one study of asthma patients found that a digital reminder on a wearable device for medication adherence coupled with instant feedback was more effective in encouraging patients to take their daily medications than personalized training on medication adherence with their doctors. Those receiving digital medication reminders were more than twice as likely to adhere to their prescribed medication regimen and less than half as likely to experience severe asthma symptoms compared to a control group. Another study on medication adherence, encompassing hundreds of thousands of people living with diabetes and hypertension, concluded that those who used digital devices to track their steps, sleep patterns, weight, or diet were more likely to adhere to their medication regimen than those who did not. This research even found a positive correlation between the frequency of digital activity tracking and medication adherence.

Though medication adherence is a large predictor of the effectiveness of chronic disease care, the evidence goes beyond just adherence itself. Several studies have demonstrated the efficacy of digital data tracking for general physical activity and lifestyle. For example, a 2017 systematic review of the literature on weight-loss programs found twenty qualifying studies reporting greater levels of weight loss when activity trackers were used as part of the weight loss intervention. Further, research shows that using wearable digital technologies increases tracked activity days per month by about 34%, maximizing the benefit of wellness-linked insurance models.

The issue with wellness-linked insurance models at present is that they serve primarily middle- and high-income customers in countries such as South Africa, the United States, Singapore, the United Kingdom, and China. However, low-income customers could benefit greatly from wellness-linked programs that employ digital tracking devices. Not only would all sectors of the population gain the health benefits already discussed, but wellness-linked programs offer an opportunity to combat inequity and increase the availability of NCD data, which is greatly lacking at a global level.

From the government’s perspective, the opportunity to digitally track health data creates the possibility to justify upfront investments needed to launch wellness-linked NCD prevention and control programs in the public sector. Reliable health outcome data makes it possible to calculate a return on investment and creates the opportunity for public and private sector stakeholders to understand the contextual applicability and potential savings of wellness-linked programs in all population settings.

In addition to the possibility of a return on investment metrics, the opportunity for population-wide digital tracking of health outcome data creates the opportunity for countries to understand the health needs of the population in real-time. For example, in low- and middle-income countries (LMICs) currently combatting the growing diabetes epidemic, the understanding of the true burden of disease is often lacking due to data constraints. The ability to collect robust data on the prevalence of the disease as well the contextual needs in the care cascade holds great promise for increasing the access to and quality of NCD care in LMICs.

There is a large opportunity for lower-cost wearable devices to ensure the availability of digital data in LMICs. Public-private partnerships harness the potential to implement wellness-linked programs to save millions of lives and ensure those lives are healthier and more prosperous without the impact of chronic conditions. The Health Finance Institute is working to apply innovative financing solutions to increase access to wellness-linked programs globally, aiming to bring health and prosperity for all.

By Jenna Patterson, Thomas Roades, Debra Winberg, Erin Gregor, Yun Fu, and Andrea Feigl-Ding

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Health Finance Institute

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