In 2004, the health insurance company PruHealth began running a scheme that anticipated some of the headline grabbing potential of digital health. The scheme offered policyholders financial incentives, in the form of ‘Vitality Points’, to take better care of themselves, through gym workouts,  reading self-help articles and even consuming fruit and veg. By collecting points policyholders could reduce their premiums in a virtuous circle that left everyone better off. 

 

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Emerging from the changing relationships between old and new infrastructures, devices, and ideas, digital health is still malleable and hard to pin down. But there are a few elements that have held still long enough to allow us to study them. As we noted in our first post, firms like Oscar Health Insurance are relative latecomers compared to PruHealth. Established by South Africa’s Discovery and the UK’s Prudential to run the Vitality scheme in Britain between 2004 and 2014, PruHealth’s private medical insurance (PMI) encouraged policyholders to take better care of themselves, avoid poor health, and reduce their premiums in a virtuous circle that left everyone better off. As the Financial Times noted in 2008, “A customer base that never gets sick but still pays its premiums is the Holy Grail for health insurers.” This heady blend of ‘wellness’ and behavioural economics caught the imagination of the British financial press, and PruHealth became the go-to source for stories about health ‘nudges’ as well as survey data on sitcoms that are good for your heart and the perils of working long hours. In 2014 the Prudential surrendered their stake to Discovery and PruHealth became VitalityHealth and VitalityLife. Vitality continues to prosper, sponsoring sports competitions, teams, and Bournemouth FC’s Vitality Stadium, and establishing ‘Ambassadors’ like the athlete Jessica Ennis-Hill. But between 2004 and 2014 PruHealth provided a concrete example of one way in which insurers might use health data generated by policyholders to reward those who were looking after their health. We expect to return to Vitality in a later post, but the ten years of PruHealth’s existence offer an interesting case of a precursor of current digital health and insure tech initiatives. What was PruHealth intended to do? In what ways did it pave the way for digital health?

PruHealth’s launch received a good deal of attention from the British press, who explained that gym workouts, improved BMI and blood pressure measurements and reading self-help articles could all generate Vitality points. It was compared to retailer loyalty card schemes. Policyholders with enough points progressed to new grades of membership, bringing new benefits; the highest (‘Platinum’) status brought a 100% discount on premiums. PruHealth’s chief executive, Catherine McGrath, said “One day, all private medical insurance will be like this.” Nick Bosanquet, Professor of Health Policy at Imperial College and advisor to the right-wing thinktank Reform, summed up PruHealth’s mission when he pointed out that “…we are currently giving the money to the providers of healthcare who are looking after smokers. So why not give the money to consumers who are heading off the need to spend that money?” Display ads proclaimed “I should lose the love handles” and “I should sweat less over my gym fees.” At the same time there was grousing about the sticks that accompanied PruHealth’s carrots. The Times reported that “Smug fitness fanatics now have something else to feel good about,” suggesting this was only relevant for the fit, and there was a sense that the scheme was Big Brother-ish – maybe un-British.

Indeed Vitality had started in South Africa. Discovery had been just “one man and a desk” in 1992 but after CEO Adrian Gore started the Vitality scheme in 1998 Discovery became the country’s largest health insurer. A shortage of doctors necessitated a focus on prevention rather than cure. Establishing partnerships with gyms, Weight Watchers and supermarkets (to track healthy eating), Discovery boasted lower claim ratios for policyholders who engaged with wellbeing incentives – in other words, the healthiest members were less likely to claim for medical expenses. “The beauty is that no one is a loser,” Gore told the Times. “People in the vitality programme consume less care, the premiums become more affordable, and claim rates are controlled.” In 2011 the Economist’s ‘Schumpeter’ wrote that Discovery’s success showed “how quickly new ideas are starting to flow out of emerging markets… [challenging] the West’s lead in health care and other sophisticated services.”

Discovery was busy beyond the UK, too, opening Destiny Health in partnership with Tufts Health Plan in the US in 1999, though this failed, with losses of R1.3bn after only three years (Discovery returned to the US in partnership with Humana from 2015). In 2009 Discovery bought nearly 25% of Ping An Health, one of China’s largest private health insurers. In South Africa the rewards model was extended to VitalityDrive car insurance in 2011, using telemetry to detect aggressive driving and offering careful drivers rebates on petrol. In the UK, by 2007 PruHealth had established partnerships with Alliance Boots to sell individuals private health insurance (70% of PruHealth policies were in corporate schemes); with Add Leisure for its online personal coach fitbug.com; with Allen Carr’s stop smoking therapies; and with Sainsbury’s supermarket, for healthy eating. By 2009 PruHealth had 200,000 members; in 2010 Discovery acquired Standard Life’s Healthcare division. By 2014, Vitality covered 800,000 people in the UK.

The firm’s USP had been clearly established: it rewarded good behaviour, just like car insurance. However not all of the incentives the firm offered were related to wellness. The end of free gym membership for frequent users, and the addition of Eurostar, Cineworld and tour operator Mark Warner to the list of partners in 2008 puzzled observers and annoyed some members. The scheme was being standardised – gym membership was the only perk based on frequency rather than policy status. Asked what Cineworld had to do with wellness, a PruHealth spokesperson said:

“We thought we would move into the area of ‘treat yourself’ lifestyle partners. People might sit with a huge vat of Coke and a tub of popcorn, but our policy is about a carrot-and-stick approach and you don’t want to just beat people with a stick.”

PruHealth was designed to reward individuals with company cover for healthy behaviour, even if they did not claim, and was prepared to use any means, fair or foul, to encourage members to be healthy. And when rival firms suggested “investing in health and wellbeing won’t reduce private medical insurance premiums”, PruHealth continued to point to their South African claim ratios.

But if PruHealth was the solution, what exactly was the problem? Beyond the dream of an insured population that did not claim on its policies, was the firm intended to provide a challenge to the NHS? A few stories did note that PruHealth had adopted cancer treatment drugs rejected by NICE. However the real problem appeared to be the declining market for private medical insurance. Sales of PMI had been falling since tax relief for the over 60s had been cut in the 1990s, with 82,000 fewer policyholders in 2003 than 1999; individual annual premiums had risen from £871 to £1280 over the same period, with the over 50s seeing the largest increases. The Financial Times said a report for Lang and Buisson suggested that government investments in the NHS and attempts to shorten waiting lists constituted a “threat to [PMI] providers”. But by 2006 the number of personal plans was beginning to increase as the rise in premium costs slowed, and by 2007 more than 12% of UK population were covered by PMI, its popularity driven by new concerns about the NHS. Perhaps schemes like PruHealth that caught the public imagination – and which were reported widely in the press – helped rejuvenate the market for PMI. Rather than solving the problem of how the UK pays for healthcare, PruHealth aimed to raise the profile for ‘smart’ health insurance, and to reward members of corporate schemes with a mixture of wellness rewards and more hedonistic ‘treats’. Like Oscar, PruHealth was selling an idea, using innovative advertising like fruit-dispensing bus stops.

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photo credit: sonia kalfon

bottom photo credit: sonia kalfon: https://www.flickr.com/photos/soniafrommarseille/

So was PruHealth an experiment in digital health? It did collect data, but despite their importance as precursors of big data, loyalty card records hardly seem to match the claims made for digital health today. The firm’s adoption of wearables happened so early that the press barely mentioned it, and the use of wearables by Vitality members only took off in 2012. But not long after PruHealth launched, the former (Conservative) sports minister Lord Moynihan suggested that the NHS might save £1 billion pounds a year if GPs were able to prescribe exercise for patients. Half of this saving could go to “reformed couch potatoes,” in the form of rebates for National Insurance Contribution payments, and the other half might pay for sports facilities. PruHealth was offered as proof that incentives could encourage better health, but the Royal College of GPs pointed out that their members were already overworked. Len Almond, director of the British Heart Foundation’s National Centre for Physical Activity and Health, worried that the Vitality scheme only counted things that could easily be monitored, saying: “most activity in this country revolves around walking and this would be difficult to monitor… the cost of setting this up would outweigh the projected savings.”

Moynihan’s scheme disappeared without trace, but activity trackers were available by 2006 and Fitbit was founded in 2007. Shortly after PruHealth arrived, many of the key elements of digital health had been assembled – in outline form, at least. Digital health promises a way of paying for health that can provide incentives for fitness, be paid for within the parameters of the NHS but with the cost and effort of data collection to be passed on, at least in part, to the individual through their wearables, smartphones, data and wifi contracts.. Although PruHealth did not bring all these things together, it did experiment successfully with tracking behaviour in order to encourage ‘nudges’ in PMI. Contemporary incarnations of Vitality may prove to be even more successful in combining the two.