Today employers spend an average of $629/employee every year to incentivize healthy behavior, up nearly 70 percent in just two years. That’s approximately $60 billion spent annually by employers and payer groups on health incentive programs

But these programs are highly fragmented, utilizing a mixture of cash, gift cards, and prepaid cards. As a result, these programs fail to effectively engage consumers over the long-term, and it’s impossible to track the usage of these programs or tailor programs to the specific user.

Hence, the inspiration for a new concept called Tailored Spend by United Preference (@utdpreference), a Princeton, NJ startup attempting to revolutionize the way health and wellness incentives are delivered by payers and employers.  A few months ago I interviewed the team, when they were partway through the Healthbox accelerator program. They are now ready to launch the program and took a few minutes to share their plans with iMedicalApps.

There are three key differentiators which set United Preference apart from other incentives programs.

  1. Guaranteed Return on Investment (ROI): Over $8 Billion annually in gift cards goes unspent, which is money thrown away. United Preference has the ability to annually or bi-annually sweep accounts and return all unused funds to health plans and employers. This provides immediate cost reduction.
  2. One Card, One Platform: The solution uses one card to deliver all incentives and benefits. Cards can be tailored to the program, for example everyone within a weight loss program receives benefits for healthy foods and supplements, or down to the individual member, allowing high risk individuals to receive benefits towards gym membership, or even retail goods like athletic gear and consumer electronics to drive participation in preventive health programs.
  3. Behavior Analytics: United Preference can track and report on how incentive dollars drive member engagement, and influence long-term lifestyle changes.

In my opinion, the coolest element of the Tailored Spend solution will be their smartphone app, which users will be able to use to scan items at retailers to determine whether or not they are covered by their particular Tailored Spend plan. This allows the company to control what the incentives are used to purchase, instead of simply offering users cash they can spend on anything/everything regardless of whether or not its “healthy”.

It makes very little sense to give individuals cash as an incentive to be healthier when they could easily take that money and spend it on fast food and cigarettes. The app will eventually also allow users to pay using their Google Wallet via NFC. I eagerly await the opportunity to field test and review the application.

Below you can read my interview with United Preference co-founders Mark and Pamela Hall on their time at Healthbox, how it helped them develop their business, and what the future holds for them as they launch their first pilots.

BTE: Can you speak more generally to how United Preference will engage larger public employers moving forward?

Mark Hall: I think the solutions for public employers are really similar to those for smaller companies. Both are really trying to incentivize healthier behaviors. With our solution the city can offer individuals a branded card program which can be used to administer a benefit that is tailored to be useable only for things such as healthy foods, or prenatal vitamins, things that are conducive to a healthy lifestyle and outcome.

Once you have the card in place, it can be carried around and be used to provide other sorts of preventive care and testing, or to receive flu shots at local pharmacies. Its the flexibility of a single card serving multiple purposes that is truly something unique which we are bringing to the market.

BTE: The first time we spoke you guys were still very much in the idea phase of your business development, and here we are almost three months later and you are about to launch your products/services. I am curious how your participation in the Healthbox accelerator helped you refine these raw ideas and take those ideas and turn them into the final, or at least first generation version of your platform?

Pamela Hall: It really helped us refine the message about our company and the various capabilities our platform enables providers and employers to offer their members. We truly offer three differentiators from other players in this market, three features nobody else offers. Guaranteed ROI is something that has generated a huge response for us, because as Mark was saying, on average 38 percent of incentive cards go unused, and with Medicare and Medicaid those percentages are much higher, sometimes as much as 60-80 percent of those cards go unused.

When you think about that as money that is just thrown away, by allowing employers and payers to sweep that cash back from the cards, we are offering instant savings and ROI. Participating in the Healthbox program really helped us refine our message and better articulate this value proposition. Right now companies are spending $629/employee/year on healthy incentive programs, and our time at Healthbox really helped us understand and articulate how this money is being inefficiently dispensed and largely wasted, which is really what our platform addresses. We really had a great experience at Healthbox and got a lot out of it.