COMPREHENSIVE WELLNESS:
THE NEXT AND TIMELY
DIFFERENTIATOR FOR THE
HEALTHCARE MARKET
by Munzoor Shaikh
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COMPREHENSIVE WELLNESS
Today, more than ever, corporations face the challenge of controlling
rising healthcare costs. Comprehensive wellness has emerged as a
key differentiator for health plans, wellness providers and integrated
delivery networks (IDN) in the corporate marketplace, proving a
consistent 3:1 return on investment (ROI) over three to five years
(Grossmeier, 2012).
More and more, employer groups and health insurance brokers will
choose health plans and programs based on comprehensive wellness
with a proven ROI model. Not only does this pose a great opportunity
for healthcare plans, wellness providers and IDNs, but also a very
timely one given the backlog of workplace wellness demand, the
impending 2014 insurance exchanges, and the trend of membercentric service offerings.
To leverage comprehensive wellness as the key differentiator, health
plans, wellness providers and IDNs must pursue a niche strategy by
exploring a combination of seven key wellness strengths relevant to
this marketplace.
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COMPREHENSIVE WELLNESS
WHAT IS WELLNESS, AND WHAT IS A COMPREHENSIVE WELLNESS PROGRAM?
Wellness, as defined by Charles B. Corbin of Arizona State University, is a “multidimensional state of being
describing the existence of positive health in an individual as exemplified by quality of life and a sense of
well‐being.” Wellness is not only physical, but also spans the emotional and social realms allowing one to
function optimally.
A comprehensive wellness program is one that addresses all areas of health for all segments of a given
population. Traditionally, most managed care organizations had focused on treatment of illness once illness
occurs, a retrospective phenomenon known as disease management. A comprehensive wellness program
should not only entail traditional disease management but also include prospective efforts that predict and
prevent potential risk of illnesses and maintain good health for the already healthy. Due to the potential
cost savings via proven ROI, corporations are beginning to see wellness as a strategic asset today rather than
an auxiliary benefit.
CORPORATE WELLNESS: A FRAGMENTED MARKETPLACE
A fragmented market is one that has many small competitors and has structural factors that inhibit one
large supplier (monopoly) or a few large suppliers (oligopoly) from dominating the market. The automotive
maintenance market is a good example. There is not one firm that can provide all the desired benefits for
consumers of the automobile maintenance market. Structural factors such as geographic locations,
customer preferences, etc., prevent one firm or a few large firms from servicing all of the automobiles in the
U.S. As a result, there are a myriad of automobile maintenance firms even within the same city.
The corporate wellness market follows a similar pattern as the automobile maintenance market. According
to the IBIS World Market Research Report of December 2011, corporate wellness Services is a $2 Billion
market with over 7,400 businesses employing over 14,000 employees (corporate wellness Services in the
US: Market, 2011). Even in a given city or locale, there are several wellness providers. Furthermore, no two
populations have the same exact need or the same propensity to change their lifestyle to incorporate
wellness. A rural population may experience enough movement naturally and care less about walking
programs, unlike a cosmopolitan population. To meet the needs of disparate populations, the market will
withstand many players. This cultural disparity will serve as a key structural reason for the marketplace
remaining fragmented.
WHERE IS THE WELLNESS MARKET HEADED?
The corporate wellness market will likely remain fragmented until Health Insurance Exchanges begin in 2014
and perhaps even beyond. There are several factors contributing to this market remaining fragmented:
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Cultural disparity. Wellness programs are applied to given populations within culturally disparate
localities. As the efficacy of such programs depends on culture, this disparity allows for multiple players
in this marketplace, each tailored to address specific features.
Market uncertainty. The healthcare market is still undergoing massive transformation and uncertainty
such as the HIPAA rules of rewards/penalty for wellness participation. Healthcare reform increases this
reward/penalty to 30 percent but is unclear on the timeline. Furthermore, this rule will apply to ten
states and, depending on its success, may be extended to others. The uncertainty will sustain a large
number of players in the market each trying to claim their stake in an opportunistic marketplace.
Lack of awareness. The awareness of what practices facilitate wellness is low among the U.S. population.
As a result, corporate purchasers of wellness remain unsophisticated, leaving much of the purchasing
decision based on individual needs and perceptions of HR departments. This allows multiple suppliers to
exist, each catering to the varied needs of the market.
Unhealthy U.S. lifestyle. The lifestyle in the United States is not conducive to healthy living. Poor diet,
heightened stress, lack of exercise, and several other factors keep us unhealthy. This means many firms
can continue to innovate and explore wellness solutions for different populations, and therefore the
likelihood of one dominant solution or firm emerging is very low.
THE OPPORTUNITY IS IN NICHE MARKETS
Given that the marketplace will remain fragmented, solution providers can tailor their services and solutions
to the needs of specialized markets and build niche businesses. This is akin to a national chain of automobile
maintenance stations servicing all automobiles in all states for all customers. Due to current market
fragmentation in wellness, a given supplier need only find a few benefits that resonate with their target
niche market. As a result, comprehensive wellness solutions face a unique opportunity today to find,
develop and grow a niche market.
THE TIME FOR COMPREHENSIVE WELLNESS IS NOW
Not only is the opportunity for comprehensive wellness programs evident, it is timely. The key factors below
make wellness solutions more compelling today than in the past:
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Cost Containment. Employers can expect an 8.5% increase in healthcare costs in 2012, compared to
8.0% in 2011 (Behind the numbers, Medical cost trends for 2012, 2011). Employers are taking some
action to address rising costs as evidenced by the growing number of Consumer Directed Health Plans
(CDHP). In 2011, an estimated 61% of companies offered CDHPs, up from 54% of companies in 2010 and
48% in 2009. The pressure to reduce healthcare costs has never been stronger than now for employers
(Purchasing Value in Healthcare, 2010).
Health Insurance Exchanges. The payback period for comprehensive wellness programs range between
three to five years and, according to some studies, could be as little as two years if productivity
calculations are included in the ROI. Many health plans are concerned about retaining their competitive
advantage when the2014 insurance exchanges proliferate. If health plans are to differentiate themselves
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in the face of the 2014 exchanges, now is the time to launch comprehensive programs, establish their
ROI in the marketplace and capture new entrants into the individual market.
Backlogged Demand. Most firms recognize the value of wellness programs but have put off their
implementation due to difficult economic times. However, the U.S. economy seems to be turning a
corner. Unemployment stood at 8.5% in December 2011, the fourth month in a row we saw a decrease.
There is a large unmet demand and now is the time to meet it.
Numerous Mid‐ to Large‐Sized Firms. Very few large‐size firms create in house wellness programs and
most mid‐size firms cannot afford to do so. However, all firms still face the demand to lower healthcare
costs. Furthermore, wellness programs are becoming a common way for firms to differentiate
themselves during corporate recruiting. To be competitive in the recruitment market and reduce
healthcare costs, firms need comprehensive wellness programs now more than ever.
ELEMENTS OF A COMPREHENSIVE WELLNESS PROGRAM
In his book Blue Zones, author Dan Buettner describes his journey to areas of the globe where there are an
unusually high number of centenarians ‐ people who surpass 100 years of age ‐ who live high quality lives.
After studying the health habits of such centenarians, Dan concluded that there are nine common factors
that affect longevity and quality of life, all of which should be part of a comprehensive wellness program:
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Move naturally. Getting enough physical exercise through natural movement, such as walking, taking the
stairs, etc.
Plant‐based diet. Eating meat only once or twice a week and avoiding processed foods.
Eat less and early. One’s heaviest meal should be during the first half of the day. Overall, centenarians
consume 20 percent fewer calories than the average U.S. person.
De‐stress. Stress is a root cause of many ailments. Relieving and managing stress effectively through
regular sleep, rest, and meditation is a key element of centenarian life.
Red wine. A glass or two of red wine a day keeps one’s blood thin and arteries clean, thereby preventing
cardiovascular disease.
Daily sense of purpose. Centenarians live daily with a sense of purpose, whether it is spending time with
family, playing with their grandchildren, or being actively involved in hobbies and areas of interest.
Sense of belonging. Centenarians have strong social circles where they are valued and have a strong
sense of belonging.
Loved ones first. Spending time frequently, face to face, with loved ones and family members
significantly increases one’s health and wellbeing.
Community of healthy people. Living in a community of other health‐conscious people significantly
increases one’s chance of healthier living. This lends to the fact that healthy living is not only about
changing individual behaviors but also behaviors of social groups.
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In addition to the nine elements of wellness from Blue Zones, there are some additional key elements that
we have found a comprehensive wellness program should contain:
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Ready access to health information. One of the key reasons for lack of health is a lack of awareness of
our state of health. By making one’s health information readily available, corporations can raise
awareness and facilitate healthy behaviors.
Regular check‐ups. One of the best ways to prevent illness is to have annual checkups with one’s
physician. Only about a fourth of the U.S. population receives preventive annual check‐ups today.
Biometric screening. A lot can be learned from the chemistry of our blood. Particularly, the trends of our
blood work can show early signs that can prevent expensive illnesses such as cardiovascular disease.
Health risk assessments (HRA). By now, many health plans offer an HRA that allows one to quantitatively
measure their exposure to health risks. By measuring the risk, one can manage risk better through
healthier habits.
Condition specific programs. According to the Center for Disease Control and Prevention, $3 out of
every $4 spent on healthcare is due to chronic diseases such as cardiovascular disease, obesity, diabetes,
etc. Creating programs to control costs of sub‐populations within a population with chronic diseases will
help lower cost and improve overall health.
Motivational alignment. 67 percent of employers indicate poor employee habits to be the leading
challenge of maintaining affordable benefits. The composition of a population affects the dynamic of
that population along with their motivational factors to affect behavior change. Periodic monitoring of
motivational patterns of a population will help administer effective solutions for that population.
A STRATEGIC FRAMEWORK: WELLNESS IMPLEMENTATION MATRIX
The following is a strategic framework that places the elements of a comprehensive wellness program
shown above along two dimensions: ease of program development and adoption readiness. This framework
helps one determine the strategic direction for implementing a program.
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CALL TO ACTION: BUILD YOUR WELLNESS NICHE
How can you use the wellness implementation matrix mentioned above to build your niche? First,
understand your strengths. The following are seven key wellness strengths which can be leveraged to carve
out your specific niche along with first steps in bolstering each wellness strength. Below is a description of
each wellness area along with the quadrants from the Implementation Matrix in which you should develop
strategic solutions.
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Data, data, data. Firms who have the most comprehensive types of data have the greatest
advantage today in producing quantitative models to tangibly track and influence outcomes. Look at
not only what data you have, but what new data you can acquire to harvest its benefit. The more
data you have, the more you have the ability to provide a holistic wellness program. Claims history
(for retrospective analysis), clinical data from EMRs, demographic data and lifestyle data (collected
via mobile applications) are a few good examples. Start to develop solutions in quadrant two of the
implementation matrix. Create a wellness intelligence roadmap that uses data today and plans to
capture and use data tomorrow. Also, create quantitative ROI reports that clearly show the financial
benefit of your programs. This is a classic case of perception is reality.
Existing network of customers. Who you do business with today lends great opportunity to cross
sell wellness services. Your customer base, channel partners and level of sophistication of your
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Member Preference Management processes all offer a rich source from which to bundle new
wellness services. If your customer base is highly stable, you can easily brand yourself as THE
wellness provider they trust. Start to develop solutions in quadrant one and then two of the
implementation matrix. Extend wellness programs to your existing customers, create a roadmap for
targeted populations such as diabetics and, if you don’t have one already, offer a Health Risk
Assessment.
 Disease management programs. If you already have strong disease management programs, simply
extend that service to a smaller population. How well can you create targeted programs for high
cost subpopulations? Self‐funded employers are interested in specialized solutions to help save
cost. Start to develop solutions in quadrant two of the implementation matrix. Take your existing
Disease Management program and deploy it on a smaller scale tailored to meet the needs of a
smaller population who needs such services.
 Technology. Technological advances and
“Wellness and productivity are two key levers
analytics are key areas today that can give you
for U.S. businesses, especially given the re‐
competitive advantage. What technological
cent economic environment and an aging
advantages do you have? Do you have a technical
work force. It is timely to address a strategic
ability or algorithm that is patented and difficult to
framework for sustainable wellness solutions
replicate? Build your niche using unique
and their implementation challenges. In the
technological assets or capabilities. Start to
absence of strong programs from any constit‐
develop solutions in quadrant one and then two of
uents that deliver healthcare, employer
the implementation matrix. Create a mobile
groups are in an opportunistic position to take
application roadmap as well as a way to find
the reins and implement lasting change. The
whether your target population is likely to utilize
wellness implementation matrix and the
mobile applications to bring about behavior
seven areas of strength are critical tools for
change.
one to leverage in assessing one’s position in
 Individualized attention and service. How
this market to create a robust and competi‐
customizable are your services and products? Are
tive program.”
your operations poised to understand your
customers’ needs and create customized services
Joseph O’Brien
in a cost‐effective manner? Are you able to
CEO of Interactive Health Solutions
combine automation and self‐service to fit your
customers’ preferences? If you score high on
customer intimacy, you have a lower barrier to cross in introducing wellness programs. Start to
develop solutions in quadrant one and then two of the implementation matrix. Stratify your
population according to their motivational profile, analyze your services according to levels of
automation and find a match between the two – this will uncover innovative solutions that you can
offer.
 Integrate functional processes. Can you combine technological, medical and behavioral expertise in
asynchronous fashion? Can you advise groups on benefit design as well as help them manage
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chronic conditions and change behavior to promote proactive wellness? If you have the ability to
provide integrated, end‐to‐end services, you possess perhaps the greatest strength in the wellness
market. Start to develop solutions in quadrant four of the implementation matrix. Create an end‐to‐
end solution with appropriate feedback loops that not only help run a wellness program, but also
help with upstream benefit design.
Expertise in social networks. Implementing wellness requires a cultural shift and can largely be
influenced by social networks. If you know how to leverage social networks, this can be a form of
competitive advantage. Start to develop solutions in quadrant three and then two of the
implementation matrix. Create a roadmap to understand your target population, their usage of
social media and how to engage that population.
To find out more about West Monroe Partners’ wellness consulting services, please contact Munzoor Shaikh
at [email protected] or visit us at www.westmonroepartners.com.
BIBLIOGRAPHY
Purchasing Value in Healthcare. Towers Watson. (2010)
Behind the numbers, Medical cost trends for 2012. Health Research Institute, Price Waterhouse Coopers.
(2011)
Corporate Wellness Services in the US: Market. (2011, December). Retrieved 2012, from IBIS World:
http://www.ibisworld.com/industry/corporate‐wellness‐services.html
Grossmeier, J. (2012). Financial Impact of Population Health Management Programs: Reevaluating the
Literature. Population Health Magazine, 5.