Wearables and health insurance: A health bar over everyone's head

Wearables and health insurance: A health bar over everyone's head

Summary: Would you make use of a fitness wearable and consent to sharing that data with employers and insurers if that meant cheaper health insurance premiums?

TOPICS: Mobility, Hardware

Many people are choosing to wear health related wearables such as the Jawbone UP or the Fitbit Flex in order to track their steps, sleep and such. But now companies are using them to offer employee and their families cheaper health insurance.

The other day Bloomberg ran a story about how, by wearing a Fitbit, the husband of a BP employee was able to trim $1,200 from his annual insurance bill. The firm bought 25,000 Fitbit devices for its American employees and these can be used to earn points, which in turn can be redeemed to trim premiums.

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The offer was a simple one – log 1 million steps and earn half of the 1,000 points needed each year to qualify for lower co-pays, deductibles and out-of-pocket health expenses.

And BP is just the tip of the iceberg. Other companies are buying tens of thousands of wearable fitness devices with similar ideas in mind.

This new move has numerous wide-reaching implications.

Fitness wearable sales

The wearables market is currently a pretty small one. It optimistically represents about 2 percent of the billion or so smartphones shipped last year. This means that there's huge potential for growth, especially where corporations are buying them by the thousands.

According to Parks Associates, 22 million fitness-tracking devices will be sold this year, and this is set to increase to 66 million by 2018, with corporate-wellness programs accounting for a third of that.

On top of this, think of the replacement market, and sales from people seeing other people wearing them. People want what they see other people using, and health-related success stories will also help fuel sales.

This is a huge market opening out in front of the fitness wearables players.

The Apple connection

Apple is clearly heading into the health and fitness industry. Not only has it integrated HealthKit into iOS 8 which will act as a repository for user's health and fitness data, but there are persistent and compelling rumors that the Cupertino giant is preparing a wearable that will include health and fitness related features.

This, along with the huge iOS user base, puts Apple in a strong position to take advantage of the fitness wearables wave. Even if Apple doesn't have a device in the pipe, HealthKit will be present on hundreds of millions of devices, and this will offer a single place for users to store a whole raft of health and fitness related data.

HealthKit is likely to allow users to upload information into their electronic health record, and this is likely to be helpful for employers and insurers, which will expand iOS penetration into the workplace, and increase use of wearables to track employee fitness.  

Privacy and security

"You didn't sleep very well last night, did you Jenkins. What was up?"

People are on the whole careless about their personal data. This accounts for the success of social media and how we get people uploading photos of their credit and debit cards to the web. But at the same time some people will be particularly sensitive to their personal health information being open to snooping.

At a time when there's a lot of uncertainty and ambiguity related to BYOD, throwing health and fitness data into the mix will undoubtedly throw up a whole raft of issues. Here are just a few:

  • How much access do we want our employers to have to out medical data?
  • How much access to our daily activities do we want our employers and insurers having?
  • Just how securely will this data be stored?
  • Do we want this sort of personal information stored on a BYOD device that might be seized for legal examination in conjunction with a corporate litigation matter or other legal or security issue?

What's voluntary today can become mandatory tomorrow

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Remember when BYOD was wholly an opt-in program? It's now estimated that by 2017 some 50 percent of firms will demand that employees make use of BYOD.

How long until fitness wearables become mandatory? Sounds crazy, but so does the idea that you'd have to take personal devices to work and those devices could be seized as a result of your company finding itself in a legal tarpit.

And if companies can negotiate better deals with insurers if they can show that their employees are taking steps to get fit – pardon the pun – then there's a strong incentive to push fitness wearables onto employees.

I can see governments around the world having to write reams of new laws to accommodate this.

Step fraud

How long until people attach their Fitbit to their cat or pay the local paperboy to carry their UP around in order to rack up a few extra miles? It took me all of five seconds to think of that.

If people can make savings in the thousands, then expect some people to find inventive – and undoubtedly fraudulent – ways to accumulate miles.

Beyond pedometers and sleep monitors

So far we've been looking at companies pushing wearables such as the UP or Flex at employees, but why end there? What about blood pressure monitors, weighing scales, and blood sugar monitors? Not only would that data be significantly harder to falsify, but it would also give all concerned a better picture of the health of the individual, and the workforce as a whole.

It would be like having a health bar over everyone's head.

See also:

Topics: Mobility, Hardware

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  • Interesting thought on the fraud angle...

    In my case, it would work almost as well to just fasten it to my foot. I'm allways moving my feet - even when lying down or asleep, one or the other is nearly always moving...
  • they miss a lot of activity and they are easilly fooled

    I had (still have but don't use) a fitbit. Its waterproof... yet the battery drained quickly if I wore it swimming and it didn't detect a single thing while swimming. I swam 66 lengths in a 25 yard pool and nothing, I tried several times it never picked up anything. Rode 30-60 minutes on a bike... nothing. I do triathlons and for 2 of 3 sports it doesn't work. Sorry it will have to be much better than that to put any kind of insurance gate on people.

    All you have to do though is walk around and it reports you're an exercise rock star. OR yep, just shake your hand, prop your elbow on the arm chair and twist your wrist like you're fanning yourself.
  • Doing it now

    I'm doing this now. I'll get a discount on my insurance and extra money put into my HRA. To qualify, I have to log what I eat, log my steps, strength training, cardio, etc.... I take wellness classes and workshops, submit labwork, weight, blood glucose, blood pressure. I also had to complete a brain assessment, rack up 10,000 points in a brain training program, and reassess. Even though I do not smoke, I had to take a smoking cessation class, and even though I don't drink, I had to take a class on alcohol abuse. I get points (1 point = $1) for having my teeth cleaned, eyes checked, a yearly health checkup, and various other yearly exams. It's all voluntary, and I went into it knowing that I'd have to do all of this. I chose to do it for the very substantial savings on my health insurance, but I chose the option to manually log my data rather than have my fitbit synced to my account.

    The insurance company has a right to ask you to take responsibility for your own health. If you don't want to do that, then you can certainly pay the higher premium.
    • What a waste...

      of your time and the company's money. Especially on classes which do not address your behaviors. About 20% worthwhile and the rest....BTW are you not at all concerned about who's viewing or actioning your data--or how secure this is?
      • Not worried

        I'm not worried, sort of. Assuming they follow the laws, they only report the total points to my employer, not the details. The HIPAA laws cover me there. According to their privacy statement, the laws, and the agreement I signed, they only report that I've participated, and how much of a discount and how much is to be added to my HRA at the end of the reporting period. Because this is a huge international company, they created their own health insurance company to cover their employees. It follows the law in the US and is running that as a separate company with it's own board, etc...

        It's a lot like the old days where to get insurance at all, even through an employer, you had to have a health assessment and they could either choose to insure you or turn you down. The difference is that I cannot be turned down, but I am taking personal responsibility for my health. The key is that I don't have to do this, but if I do, there are very big financial incentives for participating. Plus, the logging isn't time consuming.. maybe 5 minutes per day, and the brain training and workshops can be done on the clock. This is why my employer has won awards for having the healthiest work force.

        I'll also add that they are very accommodating to those with a chronic illness. I know several people who've had severe illnesses and they did a lot of things not required by law to help those employees and keep them on the books until they were able to return to work.
      • I'll also add

        These two classes were kind of outliers. I've taken several classes that address my personal issues and have helped me make changes. You have to be open to the changes to start with, and there are a lot of ways to game the system, like shaking the pedometers, but there are always dishonest people who will find a way to game the system. They usually spend more effort gaming the system than they would do by just following the proper procedures. No, I'll just worry about me, and look at the positives... I'm moving more, have lost weight, my labs are looking better, all because I took responsibility. Yeah, they had to pay me to do it, or at least get started, but I did take the responsibility and am getting benefit, both financial and personal.
    • Insurance companies have no rights

      only individual humans have rights.
    • I don't mind taking responsibility

      Ask health care entities why they all force people to sign forms saying they take no responsibility if they make a mistake, thus leaving the patient in a lurch.
  • It doesn't help those who need the monitoring the most

    This notion is so bass-ackwards it is likely to be adopted by companies flailing to lower their HC costs and equally clueless insurers chasing the myth of 'consumer engagement'. Previous posters and the author--as well as device advocates such as Joseph Kvedar MD of Partners Healthcare/Center for Connected Health in Boston--have noted the fragility and inaccuracy of these devices (plus spoofing!)

    For the 'wellest' the monitoring is not needed because they aren't the source of major HC cost. For the sickest or those with chronic conditions who are the costly ones, they are at this point the least likely to adopt these trackers because they are EXTRA WORK, complicated and PERPETUAL REMINDERS of their illness. That is why 'consumer engagement' websites, devices and programs haven't broken into the mainstream. Solve that problem and you might actually help people manage their conditions better, even if only incrementally. Glen Tullman, former CEO of Allscripts, takes the contrarian view: http://telecareaware.com/patients-should-be-less-engaged-not-more/

    Clubbing employees into behavior doesn't work and creates a bonanza for trial lawyers. CVS Caremark is right now fending off multiple lawsuits re their requirement around health behavior disclosure. And PHRs plus lightly secured device websites are a bonanza for international hackers. (Community Health Systems, #2 health system in the US, just got 4.5 million records including SSI and DOB hacked, out of China--which is very interested in our pharma and healthcare services on several levels.)
  • To answer your summary question: yes

    I would wear one happily if it meant cheaper insurance. On the worst increase (2013 renewal) our premium went up 400% which is ridiculous.

    I think the key for the data to stay relevant is to give most importance to the activity during work hours. I think we as a society need to break out of spending 8+ hours at a desk. As an employer I'd love to make taking breaks mandatory and be able to track that via movement. I have some employees that go to the conference room to get in a quick workout as a break and it really helps their stress levels and productivity. But there is a lack of consistency and sometimes weeks/months go by where they forget or don't make it a priority, then all of a sudden they do it again.

    Another thing is a million steps is trivial. I wear a [dumb] pedometer and just walking from the parking lot to office, office to parking 5 times a day for a year is 228k steps. My fitness coach recommends a minimum of 10k steps a day, and while it's not possible to make it every single day, there are days where going way over is easy. I expect to be close to 4 million steps in a year, and that's without any walks or runs for the sole purpose of exercise but solely from day to day working, shopping, helping out in the house, the yard, taking the dogs out, etc.
    • Correction

      err 5 times a week is what I meant.
    • Think about what you are saying...

      In 1930s Germany, if you did not raise funds and donate generously to Winter Relief for the poor and hungry, it was noted and you'd have a local Nazi Party officer at your door or at your child's school. Of course, after the war we learned that the money raised did not go to the poor or hungry (which were officially supposed to be non-existent), it went to the Party leadership (e.g. Goebbels, Goering, Himmler) to fund their art collections, mansions, movies, jewels, mistresses and Swiss bank accounts.
      • We should question...

        Why premiums are increasing, and where the 'savings' are going--and to whom.
  • A new way to pick cherries?

    Quite aside from any possible fraud issues, there is a serious question that providing an incentive for something as simple as a patient's activity level will result in improved health commensurate with the discount being offered. Measuring such parameters may well be worth while to insurers, but aside from creating a differential in the cost for the lucky high activity types, may not improve health very much.

    Insurance companies are very good at drawing correlations, and the correlation between low activity level and poor health outcomes is pretty well established. That correlation does not necessarily mean that high activity level promotes health or longevity, or that extreme activity does so more than more common levels. A person bedridden by congestive heart failure for example has a very high probability of death within a year, but it is doubtful that it is the decreased activity that is the is the primary cause as opposed to the condition.

    From the insurer's point of view, however, the cause of the health calamity is irrelevant. What they need to do is find the likely victim in advance and either charge a higher premium to pay his increased cost or, better still, avoid selling him a policy altogether by simply denying his application, or raising his rates so high he will not buy it. Critics of the industry calls this risk selection "cherry picking," and it more or less defeats the purpose of an insurance pool, which is to spread the risk among the population as a whole. While insurers have been strictly limited in their ability to exclude patients with pre-existing conditions, in an attempt to prevent the costs of all of these health insurance pariahs being forced onto the government or charities, and employer plans have traditionally resisted cherry picking among the covered employees, the hidden "stress test" that "health incentive" programs provide has been welcomed.

    So a person too ill to show up at the company gym, or meet the million steps criterion will have to pay a higher premium to subsidize the "discount" being paid to the healthier insured, and voila cherry picking and differential costs for pre-existing conditions has returned.
  • Accuracy does not count.

    Most of these devices can be fooled by simply shaking them or in my case driving a lawn tractor around for an hour or so. I have one of these devices and if I drive the lawn tractor around for an hour I rack up about 4000 steps or more. And I don't even have to take one step.
  • Wearables and health insurance: A health bar over everyone's head

    I would wear one only when exercising. I wouldn't do it at any other time and especially not while sleeping.
  • This is Where Insurance Wants to Take You

    Control, manipulation, power. Of course this is where it is going and has been for years. Look at ingestibles and pill bottles that report being opened. You will be required to take your meds or dropped by insurance or increase in premiums. I predict being forced to medicate also. This is all a huge cash cow for the insurance industry as is all of Obamacare. That's why the FDA is involved - that keeps the power out of the hands of the people and puts it in insurance.
    • Obamacare

      Obamacare prevents this sort of thing. Since they can't consider pre-existing conditions, the healthcare industry can't deny you coverage if the "device" finds something interesting. Now, if Obamacare goes away, of COURSE the insurance companies would want to know what is wrong with you so they could drop you. Thats why the Repubs were paid all that money to get rid of OC. Unless you believe all of the BS.
  • So Far, Mostly Illegal in the U.S.

    "People are on the whole careless about their personal data. This accounts for the success of social media and how we get people uploading photos of their credit and debit cards to the web. But at the same time some people will be particularly sensitive to their personal health information being open to snooping."

    It is also something to consider the federal laws in the U.S. that protect people against just this sort of thing. Why not read up on HIPAA? Even Kaiser wanted to have DNA testing done on random blood samples but they warned me that I'd have to give up my HIPAA rights and the information on what they find could be given to employers or heath insurance companies. Maybe less of a problem with Obamacare, but still....

    "Remember when BYOD was wholly an opt-in program? It's now estimated that by 2017 some 50 percent of firms will demand that employees make use of BYOD."

    Since when can a company REQUIRE you to use your own equipment for anything? True, they can make your life miserable if you don't go along with it. Where I worked, they were going to pay a stipend of $30-$50/month for you to use your own portable equipment (cell phone, at first). Most of the employees refused because they would be forced to turn over their cell phones to have MDM software installed and there would be a requirement if the phone is lost or stolen to report that within 24 hours and the company would reserve the right to completely wipe the phone in that case. Including the kids pictures! (I don't know why people object to that. If you do find the phone it IS backed up, isn't it?).

    If my boss claimed that I didn't get sleep the previous night, I'd start looking for a new job. Federal law says it is NONE of his business. Period.

    And ObamaCare may make reporting things to your insurance irrelevant since they can't deny you coverage any more but what happens if the Republicans win an election and we go back to not getting coverage for pre-existing conditions? Then what? "Sorry you have diabetes; we won't cover you..."

    What is next? The auto insurance people want to monitor the speed of your car? The car will issue violation tickets? It's bad enough everyone knows where we are but is that band-aid really covering a cancer?
  • Transparency and privacy..

    I'm a privacy advocate and a lot of this is all about selling your data to make big money. Walgreens pulls in about a cool billion a year, just selling data. We need to form an index of all the data sellers in the US and require a license and yes we need a law for this. I have been working on this for 3 years and have a little campaign going and I might have to kick it up a bit as I have been working on this on my own time so far.


    Read my comments and links and find out what insurers already buy, your credit card transactions and they record your voice and analyze it at the call centers, "score" you and sell that too. It's an epidemic.

    Senator Schumer was right, FTC found 7 apps/devices selling data so anyone can get a hold of it. It's a good post as I included my tweet chats w/the US FCC CIO and Acxiom too when they decided to reach out to me:)


    If we get a law that requires all data distributors to be licensed, we have an index and then we would also require disclosing what kind of data they sell and to who. Last thing we need is United Heatlhcare and Apple writing code together. By the way, United makes 1/3 of their profits from creating software and analytics, the other 2/3 is from selling policies.


    There's a lot to read with the links but you'll be better educated on what really goes on.