Just five chronic conditions—heart disease, cancer, diabetes, arthritis, and obesity—account for more than 75 percent of all healthcare costs in the U.S., according to the CDC. All are to some extent preventable. So if employers could just keep their workers a little healthier, they’d stand to save a ton of money on medical coverage.
That’s the financial logic behind the “wellness” programs many employers offer today as part of their overall health perks. But there’s a problem with most of these programs: they suck. A typical wellness program might include a vaccination reminder when flu season rolls around, a newsletter with a few healthy recipes inside, or—if employees are really lucky—a discount on a gym membership. As a result, most employees simply ignore them.
That’s why San Francisco-based Keas, which makes Web- and mobile-based tools designed to help corporate employees develop healthy habits through games and social networking, eventually stopped mentioning cost savings as part of its sales pitch to companies.
“We ask everyone, ‘Has any wellness program reduced your costs?’” says Josh Stevens, who joined Keas as CEO last winter. “After the laughter stops, they say, ‘Reduce cost? We don’t even know who’s using them.’”
So instead of promising corporate customers that their employees will get healthier, Keas now offers a more realistic guarantee. It says it will track how many employees participate in its team-based programs—which range from healthy-eating suggestions to exercise-related challenges—and make sure the number is dramatically higher than it was under an employer’s previous wellness plan.
“Lowering the cost of care is a long-term issue that we are not in the business of solving today,” says Stevens (pictured above). “We are in the business of driving engagement and behavior change, and we can guarantee that. We will double or triple [employee engagement] over the incumbent provider, or your money back.”
Doubling participation is not a difficult challenge at most companies, given that the rates are so low to begin with. Keas does employee surveys before it implements its own programs, and “in no case have we found utilization of over 10 percent,” Steven says.
Exactly why traditional wellness programs are lackluster to the point of invisibility is an interesting question. Stevens thinks it’s because they’re usually provided by big health insurers like Aetna or United Healthcare, who throw them in as free deal-sweeteners when they’re trying to get big self-insured companies to sign up for another term. “Plans use it as a tuck-in to say ‘Don’t switch to the other guy, stay with us and we’ll throw in wellness,’” he says. Because the programs cost money to administer, plans don’t have an incentive to invest much in them; and because employers aren’t really paying for them, there’s not much reason to monitor usage or encourage participation.
Keas is one of a number of technology-focused startups offering next-generation wellness programs, which typically aim to increase engagement through a combination of game mechanics and old-fashioned bribery (that is, financial incentives for doing things like completing a health risk assessment, getting cholesterol levels and other biomarkers screened, or joining exercise classes). Other companies in this set include Bellevue, WA-based Limeade, Framingham, MA-based Virgin HealthMiles, and Boston-based Healthrageous. But because most companies still get wellness programs from the big health plans, “we are not competing with the Virgin HealthMiles of the world,” Stevens says. “We are competing with the plans.”
It took a while for Keas, which has raised $25.5 million in venture backing from Atlas Venture and Ignition Partners, including an $8 million round announced today, to find its focus. The company was co-founded in 2008 by Adam Bosworth, a database scientist/polymath who was formerly the main architect behind Google Health, the personal health information service that Google shut down at the beginning of 2012. As I wrote in a previous profile of Keas, the company’s early years were rocky, as it tested and was ultimately forced to abandon Bosworth’s first idea, a Mint.com-like health dashboard for corporate employees.
The problem, Bosworth explained, was that for most employees, the dashboard conveyed only bad news. “All these people would enter their height and weight and lab data, and immediately we would tell them, ‘You suck. You’re overweight, your blood pressure is too high, your cholesterol is too high, you must change.’ They were gone in 60 seconds.”
So Keas undertook a dramatic pivot aimed at creating something more palatable. In 2010 it rolled out a
