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

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?
Written by Adrian Kingsley-Hughes, Senior Contributing Editor

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.

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

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.

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