Fitbit and Qualcomm Life’s UnitedHealthcare partnership may signal a healthy corporate wellness market in 2017

by Harry Wang | Jan. 5, 2017

Fitbit’s stock had a terrible year in 2016 even though the company posted double-digit growth in both revenues and device sales. That is how tough to be in hardware business these days.

Fitbit has never hid its ambition for pursuing growth opportunities via the corporate wellness and health insurance channels, but that growth has yet to be validated through financial metrics. The upcoming fourth-quarter financials and its 10-K report later this year would clear a lot of speculation on how good or great these channels are for Fitbit in 2016. Last time I checked, from its 10K for 2015, business channels represented less than 1% of its 2015 revenues that the company didn’t bother to break them out or discuss in length. That may change in its 2016’s reporting.

Fitbit had some notable business customer wins in the last two years. Right before CES 2017, the company announced a new partnership with UnitedHealthcare in which its Fitbit Charge 2 will be part of the latter’s Motion employee wellness program. This deal is notable for two reasons.

First, the Fitbit Charge 2 is a mid-tier device in the company’s product portfolio and carries a higher MSRP than what usually was selected by corporate clients. For instance, Target offers Fitbit Zip, the lowest-priced Fitbit tracker, to its employees for free. UnitedHealthcare may find Charge 2 a better device from user experience perspective, or become more confident of fitness tracker’s health benefits that it is willing to subsidize more. Whatever reasons, that is good news foor Fitbit.

Second, for a true partnership to bear fruit, both parties must chip in. While Fitbit offers its devices, UnitedHealthcare throws in financial incentives. According to various reports, the insurers would offer, through its corporate clients, to employees $4 a day in the form of health deductible credits if employees hit 300 steps within five minutes six times a day, go 3,000 steps in 30 minutes, or top 10,000 total steps a day. The structure of this incentive scheme awes me in that it tries to balance between being practical and also accountable. An incentive needs to be practical so that consumers have a chance to earn it, and at the same time, insurers can afford to offer it to all participants. The whole scheme needs to be user accountable so that what consumers need to do is truly beneficial to their health. UnitedHealthcare’s approach reflects a new level of sophistication in the design of finical incentives for health and wellness self-management. Such shrewdness in incentive design is good news to the healthcare industry overall.

UnitedHealthcare has already had a partnership with Qualcomm Life to manage potential devices for its Motion program, and Charge 2 is perhaps the latest addition and the most prominent device. Less than a year ago, the insurer began to promote its own Trio Motion digital pedometer to corporate clients. But consumers may want more device options, maybe even the opportunity for BYBD. The deal with Qualcomm Life signals that the insurer is removing device restrictions—another sign that its corporate wellness clients are becoming more receptive to digital fitness tracker’s health benefits.

Adding Aetna’s decision to offer Apple Watch to its corporate wellness program clients in 2017, this new distribution channel may begin to contribute meaningful sales for manufactures of health and wellness wearables in 2017.

Further Reading:

Next: Mixed Reality and the Future of Healthcare
Previous: Top 10 Consumer IoT Trends: Integration of healthcare services and devices in the smart home ecosystem


    Be the first to leave a comment.

Post a Comment

Have a comment? Login or create an account to start a discussion.