Health Tech Meets HR Tech: Making Lives, Work, and Businesses Better
Today the annual spending on healthcare in the US has surpassed $3.5 Trillion and is growing at 5.5 percent per year. In fact, healthcare now represents 17% of our economy and amounts to over $10,200 per citizen per year. And we are heavily outspending our peers: comparable countries to the US allocate only 11% of their economy, a tremendous difference.
Of this enormous budget, Kaiser Foundation believes 82% is paid by employers (67% of family coverage). This creates an enormous burden on our companies, with approximately 32% of all company payroll now going to healthcare and other employee benefits.
One of the most significant ways companies are dealing with this burden is by investing in employee Wellbeing. The corporate Wellbeing market is around $48 billion in size and covers all sorts of wellbeing offerings: diet and fitness; mindfulness and mental health; programs for heart disease and diabetes; and a multitude of programs to help with childcare, family planning, financial fitness, and overall financial health.
In corporations, this area has now become a very strategic focus for HR. Employees, who feel the burden of healthcare costs and longer hours at work, are demanding such solutions, so there is an enormous amount of venture capital and private equity going into the space. In fact, the “HealthTech” market is as innovative as any market I’ve seen, and it is now colliding with the $140 billion market for HR tools and systems.
As I’ve gotten to know this space, I’m amazed at the way these innovative, mission-driven companies are both improving our lives and reducing costs for employers at the same time. In my new report HR Technology 2019 (you can register to receive it here), I describe it in more detail, but in this article, I want to point out some of the most exciting.
Let me just mention a few you should look at.
Fertility Benefits: Carrot.
Fertility benefits, which until recently were only seen as “riders” to existing insurance plans, are now becoming more complex, as employees leverage a wide variety of ways to conceive, such as IVF, IUI, egg donors, and surrogacy. Research shows that one out of twelve women have problems getting pregnant, and there are many procedures and programs designed to help. Some of these are quite expensive (up to $50,000 or more per treatment), and the market is quite confusing.
Carrot, a startup based here in San Francisco, has created a product to help navigate the complexities of this process, by building out an entire network of providers, assessment, and range of solutions they deliver through employers. Since such procedures are quite expensive, Carrot works with companies to decide how much they want to allocate to fertility benefits, and then helps employees learn how they can use this money toward the right range of solutions – from education to assessment to solutions – delivered through a personalized app experience.
Offering flexible options to employers in a market where “customization” has historically not been an option, Carrot’s customer base and the company are growing like wildfire, and employers tell me it helps reduce overall costs, greatly improves the services employees receive and gives people access to world experts in fertility at the click of a button.
Childcare and Parenting: CLEO
Once you have a baby, your challenges at work are just beginning. As all parents know, the first year of parenting is filled with a laundry list of things to learn: breastfeeding, sleep, play time, and all aspects of childhood development; all of which presents a daunting challenges for new families, particularly when returning to work. While many companies now offer a generous extended family leave (up to six months at companies like Deloitte), it is the return to work process that is often overlooked – as mothers and fathers alike now struggle to manage their workload while juggling a wild set of conflicting priorities at home with their new family
I remember when my children were little, my wife and I both worked; we always felt that our entire life was held together by a thread. If only one tiny thing went wrong, the whole schedule became a mess and one of us had to leave work, stay home, or deal with some medical, behavioral, or other issues in the middle of our workday. We were not super productive during those years,(luckily our children became wonderful adults), but to say “it was hard” is an understatement.
CLEO has built a solution to this problem. The company offers an amazing app and technology driven platform that connects parents to world experts in all aspects of childhood, giving parents someone to virtually chat with – that much needed place to go whenever an early childhood issue comes up. Yes, we all need pediatricians and other specialists to help, but with most clinics offering limited hours of available and appointments – urgent care can be an expensive option when in frantic need of advice – this is where CLEO picks up the slack. Customers of CLEO tell us their clients’ employees are more productive and more relaxed at work, and the cost is far lower than going to the doctor whenever an issue comes up. Again, this company is growing like crazy, and they also have a network-based model.
Mental Health and Counseling: Spring Health.
Mental health is a fast-growing problem which is now out of the closet. More than 44 million US adults have mental health issues (14% of the population), and researchers believe one in five have an unmet need.
Whether or not you want to believe that mental health is an issue at your company, the data doesn’t lie; mental health is the third most costly part of healthcare across US employers. And the issue is exacerbated by a growing “always-on society” where we sit in front of computers all day, leading us to turn to opioids and other pharmaceuticals for anxiety, sleep, and depression. This enormous part of the healthcare system that was historically never discussed, is slowly becoming destigmatized through the voices of everyone from CEOs to Celebrities.
Spring Health, a company that was founded on a large clinical study and extensive mental health research at Yale, has taken this impressive research to approach the issue of access to better mental health care – one of the largest barriers in helping employees in this space. By creating an award-winning data and technology-based intake process, their platform helps point employees to not only a solution but the right solution.
Spring’s app lets employees fill out an intake form that assess their mental health needs directly via their app or mobile platform, and then helps decipher from the assessment what type of treatment they need (coaching, counseling, medication, or other support), and then immediately connects them to a network of certified mental health experts designed to address precisely the problems they face.
Because it is also network-based, the Spring technology leverages the assessment built into the app, and it gives employees personalized support in a targeted, science-based, yet most importantly, confidential way. Spring also leverages an in-network pharmacy to help employees receive medication, taking into consideration the employees total health to ensure the right medication is taken for their particular diagnosis. This is another example of a quickly growing company, where clients are seeing tremendous savings in mental healthcare claims, and greatly improved employee engagement and wellbeing at work.
Physical Therapy On-Demand: Physera.
If you’ve ever had back pain, been involved in a bike accident, or sprained an ankle or other joint, you know how debilitating and distracting such musculoskeletal injuries can be. Not only are you in pain, but you have to figure out the right treatment plan – if you need to be prescribed pain relief, enroll in physical therapy, or even be evaluated for surgery. As the “quickest” form of treatment, the complex process of finding (and finding the time for) the right care often leads many employees to over medicate or endure unnecessary scans and procedures.
Interestingly enough, many data studies have shown that beginning with physical therapy can be a much more effective treatment than medication or surgery. Cue Physera, a company which was founded by software executives from Facebook and Google, and works closely with physicians and physical therapists to build a first of it’s kind digital solution to musculoskeletal issues. Physera’s technology and science not only helps employees diagnose their condition, but saves them time and the burden of traveling to physical therapy clinics by giving employees access to virtual exercises through a through a digital coach while you go through rehab.
When I had my bike accident a few years ago I had an amazing physical therapist who helped me fix my shoulder, but I had to take home lots of little pieces of paper reminding me what exercises to do. Physera does this for you virtually, in a scientifically designed manner which helps you improve your exercises over time. Again, the system leverages the power of a network and uses apps to diagnose, prescribe, and assist you in recovery. The benefit? Of course, far faster recovery, and lower healthcare cost for your employer.
Finally, let me add to the mix the wellbeing platforms themselves. These companies (VirginPulse, LimeAid, Castlight Health) have built end-to-end wellbeing apps and platforms that let employees engage in self-assessment, challenges, education, and plug in all these other apps into a gamified, engaging, easy to use system.
VirginPulse, the leader in this market, has found that employees who use these apps have a 29% reduction in workers compensation claims, 65% improvement in employee productivity, and 9% greater productivity at work. Wellbeing may be the single most powerful employee engagement and productivity program we have!
Improving the Healthcare System, One Company At A Time
All these companies have something in common: they are being developed with a disruptive, “digital first” approach. The founders and CEOs of these companies are often young, digitally-savvy entrepreneurs, but they know that health and wellness is a well-regulated industry, so they leverage scientists, physician networks, and regulatory bodies to create validated solutions.
In every case, as I get to know these companies, I see an incredible passion in the eyes of the executives, and I see the thrill they get solving some of the most essential problems in our lives. Employers out here in the San Francisco area (and in other major cities) are flocking to use these tools because they can dramatically improve the lives of their employees and create an even better employee brand.
As I meet these companies and learn more about them, I realize they are not only changing our lives, they’re changing the healthcare system itself. By demonstrating how powerful an app, diagnostic, data, and network can be, they’re disrupting the existing siloed healthcare system and delivering consumer-like solutions to some of our most urgent life issues.
And best of all, these solutions are going to reduce the cost and improve the quality of healthcare. While the political solutions to healthcare coverage are difficult, these solutions are here today, fueled by passionate entrepreneurs with mission-driven hearts.
I want to thank the PeopleTech Partners network, a group of HR leaders I have joined, for bringing these companies to the market and helping us all learn to use these tools. As you search for the next wellbeing solution for your company, I encourage you to check these companies out.