In View Summary
Discovery Health is founded on behavioural economics and evidence-based interventions to improve health outcomes
South African health insurer Discovery Health, aims to address the behavioral and lifestyle choices that make up an increasing part of the long-term risk and costs. Through its integration with Discovery Vitality, a comprehensive incentive-based wellness program, Discovery Health members on Vitality are:
- Assessed for their risk factors;
- Provided access to a network of wellness and health providers at a discount to remove price barriers;
- Incentivized to engage in prevention and wellness promotion activities, through which they are awarded Vitality Points and a Status from Bronze to Diamond; and
- Rewarded based on their Status, including retail, airline, travel discounts and more
Discovery Vitality was first launched in the South Africa market in 1997 and is designed around evidence-based interventions and behavioural economics to improve health outcomes. Through the creation of The Discovery Group, it has now become a global player which partners with insurers across the Globe to implement its Vitality programmes, for example in the US and the recent joint venture with AIA Group in Singapore and Australia, In the AIA joint venture, Vitality is incorporated into an integrated life assurance product, and a pilot has been rolled out in Singapore.
There is extensive evidence supporting the efficacy of this wellness-integrated insurance model, in terms of improved member engagement in health and wellness activities, improved clinical outcomes, reduced healthcare costs, increased productivity at work, improved mortality rates. p. For example:
- Between 2011 and 2013, there was a 26 percent increase in screening activity, significant for both insurer and member. For example, the 9 percent reduction in the average cost per cancer case due to early detection.
- In addition, between 2013 and 2014, there was a 34 percent increase in the number of healthy food baskets purchased, a 9.3 percent increase in healthy food items purchased and a 7 percent decrease in unhealthy food items bought from partner stores.
- Finally, between 2013 and 2014, gym visits increased from between 24.1 million to 25.7 million.
- From a clinical outcomes perspective, the results are significant: for those that are the most engaged with Vitality (Diamond Status), there is a 10 percent reduction in the hospital admission rate compared to the most inactive members, and a 14 percent lower cost per patient versus non-program participants. Furthermore, at age 65, there is an 8 year difference in life expectancy between those who are highly engaged (Diamond Status), on the program and non-program participants.
- Low lapses and a positive mortality and morbidity experience have contributed to quality of earnings, reflected in the group’s 19% growth in embedded value to R39.8 billion as reported on December 31, 2013.
The Digital Insurer's View
In the fast changing digital world, customer experience built on a foundation of trust, transparency, empowerment and results will play a crucial role in insurers’ success. To achieve this, insurers will need to develop innovative customer engagement platforms and products that deliver true value. Discovery has done an excellent job at creating such an innovative incentive and reward platform where the customer benefits from improved health and the insurer benefits from reduced costs and access to valuable customer data.
Customer engagement platforms can be a great source of data which insurers can leverage to drive significant business impacts in terms of cost savings, increased market share and customer loyalty with the help of cutting edge analytics. The good news is that customers are more than willing to share personal data in exchange for value added services like Discovery Vitality is providing. We believe that, insurers who develop such innovative engagement platforms together with a meaningful data strategy will have a competitive edge over the rest of the pack.