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Lowering Employer Costs and Improving Health with Proactive Services

Wellness has emerged as a fairly umbrella term within the last 5 years. Factors for this include changing attitudes to control health cost by moving from defined benefit to defined contribution structures, and technology tools and transparencies that are shifting capitation from providers to consumers through increased consumer participation and rewards for self-care. This study discusses the market for general wellness and early intervention technologies. It covers key drivers and restraints as well as market engineering measurements and forecasts for each segment. An overview of the competitive landscape and key vendor profiles are given. Market predictions are also provided. The base year is 2012, and the forecast period is 2013 to 2017.

Methodology

Primary and Secondary Research Methodology
Both primary and secondary research was utilized to develop the research findings. The primary research included in-depth discussions with a variety of market participants, including vendors specializing exclusively in early intervention and general wellness technology offerings. Within vendor organizations, discussions were usually held with chief executive officers (CEOs) or marketing and strategy executives. The secondary research consisted of an extensive review of data and literature from various nonprofit and industry organizations, information technology (IT) vendors, academic institutions, and other sources. Information was also gathered through a thorough review of peer-reviewed literature, news sources, and vendor Web sites, particularly to gather product descriptions and case studies related to wellness.

Forecasting Constraints
• Increased blurring of service categories caused by market hype surrounding consumer wellness (i.e., too many participants with similar claims), combined with a poor overall national definition of programmatic wellness care.
• The early stage of the wellness market, which may be affected by competitor saturation and attrition, model shifts, acquisitions, or shifts in private investment to other sectors.
• Potential disintermediation through greater adoption of direct consumer applications and services, including low-cost direct-to-consumer (DTC) lab testing, mHealth, and home biometric.
• Unknown legislation surrounding the federal oversight of biometrics and mobile tools.

Other Exclusions and Limitations
The study does not consider market size or any forecasting considerations with regard to the following related areas:
• Pure onsite testing services and lab mail kit services.
• Programs that are predominantly built around onsite interaction (such as coaching, gym training, nutrition counseling, or other face-to-face interactions).
• Online test result Web sites or other clinical reporting systems.
• DTC applications, widgets, or tools (such as those used through the iPhone or Android platforms).
• DTC biometric hardware (such as wearable HR*, sleep, exercise, or calorie trackers).
• Free or paid mobile tools or hardware that are not directly associated with a sponsored program.
• Tools with no interactive components (such as health information sites and/or reference-only tools).
• Any tool or service sponsored by a third-party entity (such as a pharmaceutical company).
• Any wellness program that an employer builds exclusively for its own employees and not in the context of it as an independent for-profit business.
• Provider-centric enterprise clinical solutions with interests in care management.

Key Findings

• In the last 5 years, wellness has emerged as a fairly umbrella term in the market, primarily due to the following:
oChanging attitudes, especially of large employers, toward enforcing health cost-control measures by moving from defined benefits to defined contribution structures (i.e., requiring greater employee engagement).
oGrowth in technology tools and transparencies that are shifting capitation, or care cost management, from providers to consumers through increased consumer participation in and rewards for self-care.
oShift in Medicare Prospective Payment System (PPS) incentives from fee-for-services to more holistic outcomes-based payments through the Affordable Care Act (ACA) legislation that rewards accountable care organizations.
oVast improvements in algorithmic technologies that blend traditional evidence-based protocols with behavioral analytics, which allows an increasing pool of vendors to directly target consumers while partially bypassing regulation and the HIPAA* compliance costs associated with either direct clinical or claims warehouse data, effectively creating a cheaper engagement structure.
oIncreased overall marketing value from cost-effectively driving employee and member loyalty through an engagement and rewards structure.
• Early intervention programs with an active medical baseline testing and intervention component (e.g., partnerships with onsite lab testing and mailed lab kit services, and/or approved biometrics) represent the largest part of the market in total program and service revenue in 2012. These are also run either as divisions or subsidiaries by most of the large participants in traditional disease management (DM) that want to retain large and self-funded employers (those with over Xemployees) with an expanded range of offerings.
• Most partnerships and acquisitions for early intervention want to retain the use of existing chronic care service programs, reduce their costs with the Internet, and still stay close to the per-member-per-month (PMPM) capitated fee and risk-share fee structure that is common to DM.
• Frost & Sullivan expects low per-head costs to drive the overall adoption of general online wellness tools by mid-size employers (those with X to X employees) but with lower overall margins for participating vendors.
• Frost & Sullivan expects very low paid adoption rates by employers with under X heads.
• Across the board, margins for the industry are expected to be heavily constrained by both an intensely saturated and competitive environment. Moreover, increased turnover during plan enrollment periods and among employers switching vendors as well as the choices that will be offered through health insurance marketplace legislation in 2014 will limit the ability to create a healthy market for private consumer tools without employer participation or cost.
• Downrange general online employee wellness programs (including online health coaching, social connection tools, integrated mobile apps, and gamified models) aimed at disease prevention for low-to-moderate risk patients are the new class of low-cost engagement. Overall consumer wellness tools are expected to broadly transform behavior over time.
• Frost & Sullivan expects that this segment will saturate quickly and have few clear winners because of the following reasons:
oFew PHI/HIPAA* oversight requirements and corresponding compliance costs.
oVery low barriers to entry (for example, little development is required and the human resources cost of field staff is low) and few quantifiable informational or actionable advantages.
oVertical market-hopping based on user-adoption models for large-scale social networks serving as an analogous model for horizontals in health behavior (such as demographic differences, traction, and natural network-scale limitations based on the employee base).
oLow outcome demonstration requirements due to lack of a baseline for core measures-to-improvement metrics (overreliance on self-reported information and no trackable proof of utilization).
oLow cost-benefit value for employers to sponsor or subsidize biometric screening devices for healthy employees (which would be the first line of reportable measurement), along with privacy concerns.
• Frost & Sullivan believes that leading next-generation online wellness programs for general employees will enjoy early popularity as a way to retain employee loyalty in a program at a low cost, but over the forecast period, these programs will be subsumed (either through low-value acquisitions or by being phased out) by larger early intervention participants.

Scope and Segmentation—Assumptions

Because of cross bleeding among the claimed services offered as well as marketing popularity associated with the term “wellness,” the distinction between early intervention and general wellness technologies is vague. Frost & Sullivan has, however, made the following general distinctions based on applicability to direct outcomes measurement, as would be assessed under the final 2011 ruling for federal accountable care organization (ACO) qualifications for the Medicare Shared Savings Program. Definitions used in this research service are as follows:
Early intervention programs must meet the following core quality measures:
• Patient experience—Frost & Sullivan interprets this as user experience through programs.
• Care coordination and patient safety—Frost & Sullivan interprets this as active intervention services, which may include referral to or coordination with medical caregivers.
• Preventive health—Frost & Sullivan interprets this as general wellness information, condition treatment information, and step-wise programs with completion certifications.
• Caring for at-risk populations—Frost & Sullivan interprets this as the use of data to identify specific “at-risk” populations.
All else will be considered under general wellness. Wellness tools and services must be the primary revenue source for participants to have qualified for this research service. Within larger multi-function corporations, defined divisions or subsidiaries that are focused on wellness and that have independently accountable revenue streams are allowed.

Scope and Segmentation—Early Intervention Technologies Segment

Geographic coverage: US
Study period: 2012–2017
Base year: 2012
Forecast period: 2013–2017
Monetary unit: US dollars

Inclusion Requirements (all required)
• Direct clinical intervention service in some form (nurse assessment or onsite/mail test services).
• Focus on at-risk populations by defined disease categories.
• Employee/member certification program offered.
• Ongoing online wellness tips/coaching and FSA/HSA* incentives.

Optional Qualifications (not required but can be offered)
• Supporting biometric programs and tools.
• Supporting mobile applications.

Scope and Segmentation—General Wellness Technologies Segment

Geographic coverage: US
Study period: 2012–2017
Base year: 2012
Forecast period: 2013–2017
Monetary unit: US dollars

Inclusion Requirements (all required)
• Online activity and/or wellness planning that is not defined across specific disease Tx* categories.
• Health tracking tools and information.

Exclusion Factors
• Active intervention services such as outbound nurse support or periodic biometric screening requirements.
• Integration with claims and/or clinically reported datasets for risk assessment and health scorecarding.

Optional Qualifications (not required but can be offered)
• Social network tools (private network or Facebook).
• Supporting mobile applications.
• Lab test data pulls and supporting biometric tools.

Key Questions This Study Will Answer

What are the major drivers behind the shift from disease care to wellness care?
What are the technologies that are enabling this shift?
What are the key needs of customers?
What is the competitive spectrum for early intervention to general wellness technologies?
What is the overall revenue-based market size and growth forecast?
How will key macro trends impact the market over the next 5 years?

Table Of Contents

US Market for General Wellness and Early Intervention Technologies
Table Of Contents

1. Executive Summary
o Scope and Segmentation—Assumptions
o List of Acronyms
2. Market Overview
3. Early Intervention Technologies Segment Breakdown
o Drivers, Restraints, and Trends
o Forecasts and Trends
o Competitive Environment
4. General Wellness Technologies Segment Breakdown
o Drivers, Restraints, and Trends
o Forecasts and Trends
o Competitive Environment
5. Key Companies to Watch
6. The Last Word
7. Appendix



List of Exhibits

• Early Intervention Technologies Segment: Market Engineering Measurements, US, 2012
• General Wellness Technologies Segment: Market Engineering Measurements, US, 2012
• Preventive Care Market: Demand for Upstream Services by Shift in Chronic Disease, US, 1990-2020
• Preventive Care Market: Corporate Wellness, US, 2012
• Preventive Care Market: Evolution of Disease Management by Service Type and Value, US, 2000-Present
• Preventive Care Market: Estimated Number of Enrolled Persons by Program Type, US, 2012
• Early Intervention and General Wellness Technologies Market: Service Investment Value, US, 2012-2017
• Early Intervention and General Wellness Technologies Market: Converging Forces, US, 2012
• Early Intervention Technologies Segment: Enrollment Steps, US, 2012-2017
• Early Intervention Technologies Segment: Percent of Actively Enrolled Persons by Client Type, US, 2012
• Early Intervention Technologies Segment: Approximate Percent of Program Providers Offering Core Tools, US, 2012
• Early Intervention Technologies Segment: Approximate Percent Breakdown of Employer Clients by Size, US, 2012
• Early Intervention Technologies Segment: Approximate Percent Breakdown of Programs by Condition, US, 2012
• Early Intervention Technologies Segment: Key Segment Drivers, US, 2013-2017
• Early Intervention Technologies Segment: Key Segment Restraints, US, 2013-2017
• Early Intervention Technologies Segment: Market Engineering Measurements, US, 2012
• Early Intervention Technologies Segment: Penetration of Available Market by Enrollable Persons, US, 2012
• Early Intervention Technologies Segment: Revenue Forecast, US, 2012-2017
• Early Intervention Technologies Segment: Competitive Market Forces, US, 2012
• Early Intervention Technologies Segment: Percent Estimated Vendor Share by Enrolled Persons, US, 2012
• Early Intervention Technologies Segment: Estimated Vendor Share by Enrolled Persons, US, 2012
• Early Intervention Technologies Segment: Competitive Structure, US, 2012
• General Wellness Technologies Segment: Enrollment Steps, US, 2012-2017
• General Wellness Technologies Segment: Approximate Percent of Service Providers Offering Focus Activities, US, 2012
• General Wellness Technologies Segment: Approximate Percent Breakdown of Employer Clients by Size, US, 2012
• General Wellness Technologies Segment: Key Segment Drivers, US, 2013-2017
• General Wellness Technologies Segment: Key Segment Restraints, US, 2013-2017
• General Wellness Technologies Segment: Market Engineering Measurements, US, 2012
• General Wellness Technologies Segment: Revenue Forecast, US, 2012-2017
• General Wellness Technologies Segment: Percent Estimated Vendor Share by Enrolled Persons, US, 2012
• General Wellness Technologies Segment: Estimated Vendor Share by Enrolled Persons, US, 2012
• General Wellness Technologies Segment: Competitive Structure, US, 2012

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