This is the transcript of my recent podcast interview with Tom Abshire of Virgin HealthMiles.
Williams: This is David Williams, co-founder of MedPharma Partners and author of the Health Business Blog. I’m speaking today with Tom Abshire, senior vice president of product marketing and member engagement for Virgin HealthMiles. Tom, thanks for being with me today.
Abshire: Thank you David.
Williams: What is Virgin HealthMiles?
Abshire: Virgin HealthMiles is a business that’s focused on three things for our clients: 1) helping them create a motivating and engaging environment around their health and wellness program, 2) helping them measure those outcomes, and 3) helping them manage the success of their health and wellness strategy.
Williams: How does Virgin HealthMiles fit in with other Virgin businesses? How closely is it tied?
Abshire: We’re one of the 40 companies that comprise the Virgin group. It’s not common knowledge that Virgin has been investing in health and prevention since the 1970s. We’re a part of Virgin’s health sector, which includes other health related businesses like the health clubs or Assura Medical in the UK. That’s an area that Richard Branson is passionate about; creating companies with a social mission and impacting the global issue of preventable diseases.
Williams: A lot of people do wellness programs and there are many standard approaches. I’m wondering from your perspective, what’s wrong with those standard approaches to wellness that are used by most employers? If the standard approaches aren’t very successful, why do we see them persist in the marketplace?
Abshire: Standard approaches just aren’t as effective as they need to be. Much of the cost of health care and the increases are driven by preventable lifestyle related diseases. That’s where wellness is supposed to be at the forefront of prevention and reversing those trends.
They persist as much as anything because of inertia. They keep coming back to the same old things with the same old partners and getting the same results. Much of the approach to wellness has been driven by the tradition of the medical system with which we evolved. There’s too much around last century’s focus on communicable disease when the answer was ‘do this’ or ‘don’t do this.’ It was more of a point in time issue. The top down approach like what we have today really made sense.
Health issues today, the issues of lifestyle related diseases, are largely behavioral, so the fix needs to come from within.
That’s why Virgin is leading the way with our consumer group. We think about the problem from the point of view of the individual and their motivations and helping them find the simple things they can do to stay healthy.
Williams: Wellness is a topic that a lot of companies are interested in. There’s a feel good and positive image that can be created by investing in wellness, but does wellness have a real impact on profitability?
Abshire: It certainly does. Look at the economics behind the treatment of diseases and the impact on profitability. We know we have to do something.
Our group did an economic study last year and found, looking across different industries, that for the average company in a leading industry like technology or financial services, the impact over the next ten years of lifestyle-related diseases alone would cause about a 25% reduction in per employee profitability. Even the profitability leaders would see a 10% reduction in the average profitability per employee.
They have to do something unless they can raise prices or change behaviors. That’s where wellness really comes into play. That’s where more employers are going to see more of an impact on profitability. There would be fewer consumers for the health services that they’re paying for and providing.
Added to that, there will be benefits in a couple of different ways; lower health care costs and higher profitability. There is quite a bit of research out there that shows a large part of the positive impact of the healthy employee base is the increase in productivity. Sometimes there is two to three times the cost savings that one would see in the savings from medical care costs alone.
As we come out of the current economic struggle, retention of top talent is going to be critically important for companies. We hear all the time through our interactions with employees how they love programs that they feel part of and enabled by because they feel that that’s much more of an investment in them by their employer. It really drives up loyalty and cohesion within the culture for the company.
Williams: What are the main tenets of Virgin’s approach? I know you refer to them as “breakthrough.” Why is that term justified?
Abshire: As I mentioned, we’re building the business along three ideas: motivation, measurement and management. These are breakthroughs because they address the two biggest blockers for success and prevention today.
The first blocker is that the vast majority of employees are unaware or uninterested in the health and wellness services available to them. We’ve seen it in our own research, outside research and in discussions with our own clients, that in the best case, two-thirds of the employees don’t know about the programs and services that are offered to them. In some cases as many as six in seven employees didn’t know what their employers are offering. Health and wellness can be impacted simply by increasing awareness and preferences to act in that employee base and with increased engagement, best case of four or five times. That’s a very consumer marketing kind of notion. That’s why Virgin has come into this, helping people understand what’s available and guiding them down the appropriate path that makes sense for them.
The other area that we’re really striving to make a breakthrough on is the whole notion of managing. A number of employers that we speak to think these programs are manageable just like any other core business process, but the great majority don’t have the information they need to make good decisions. An awful lot of the information in health and wellness is focused on defining the costs. They will tell us what the costs are to a high degree of detail, for example what the costs are for coronary artery disease or surgery or a stent. They can tell us all kinds of information about those costs, but typically providers today can’t answer simple questions like: did the person smoke, and were they offered a smoking cessation program?
Our goal is to help organizations manage broadly across behaviors and programs people are engaging in, to measure results of those programs, and actually make health and wellness a business process for companies to manage.
Our breakthroughs are around alignment and transparency. Our approach is centered on aligning the employee, the company and the culture to be healthy and active and driving forward in a productive and positive way.
We’re also working to bring other program providers into this. It’s the success of the client’s strategy, not an individual program that we’re trying to empower, to enable success across the value chain. That’s a breakthrough today.
Secondly we’re providing real time information to employees on what they should do and what’s most important or relevant to them. For employers we’re doing much the same, but in this case it’s helping them understand their baseline and what they seem to be doing that’s working for the employees and where they need to focus in the future to have even greater impact from their strategies.
Williams: What sort of changes should we expect to see in wellness programs over the next five years or so other than coming closer to your model? Are wholesale changes likely?
Abshire: As I am out and around and talking to people in the industry, I’m really excited about what we can do for consumers. As I said, the goal here is to make this something that’s more internally driven versus the top down approach we’ve had for the last 20 years or more.
Just thinking about today’s wellness programs and strategies and how they’re delivered to the employee or consumer, often times there are programs where each is an island unto itself. This forces the employees essentially to be their own health strategists. I’m excited about what we’re doing, what other companies are doing around trying to align a more common user experience that improves the individuals and the organizations, that build the drive toward wellness and productivity through their actions and their cultures. Wellness becomes something we do within our organization and within our own motivations, as opposed to something provided to us by a third party. I think that’s critical.
One of the big challenges is that we are running out of options. Most of the health and wellness strategies and plan design strategies we’ve had in the past have been more about shifting costs than they have been about reducing demand and reducing costs. We’ll see more transparency from individuals and organizations to look at what’s working and what’s providing value because they’re going to have to do that. There’s not money in the system to keep increasing the cost to employers. The strategies of the last several years of shifting costs to consumers through high deductible plans or through co-insurance can’t continue. We see these eight to ten percent increases in health care costs each year consuming that disposable income as those families have to pay the higher expenses. So since we’re just about out of resources we have to look at things differently and be more efficient with the resources we have.
Williams: Tom, anything that I missed in our discussion?
Abshire: David, I thank you for inviting me and giving me a chance to speak to you and your audience. It is a really exciting time to look at different options. We’re seeing a lot more sophistication from clients who are searching out new ways. People are becoming much more familiar with the notion that we have an internal motivation driven problem today and not something that can be solved externally. I’m very excited by what is coming over the horizon. People like ourselves bring together ideas like incentives and game mechanics and social and are using those in a more tried and tested way to have an impact on this problem. One of Virgin’s interests in this is creating an organization that solves a problem. We think this is one that’s really important and worth solving.
Williams: Great. Tom, thank you very much.