BTE: PUSH Wellness was another company that presented alongside you guys at Investor Day and they seem to me to be a complementary business to yours. They offer up to $600 in cash incentives based on members demonstrating improvement in their health conditions. Is this type of company, the incentive platform, one that you guys are looking to partner with early in your business development? Or do you think you will stay focused on the large employer and payer market in the near term?
Pamela Hall: We of course love PUSH Wellness, one of our brother companies at Healthbox. We have been approached by other incentive platforms over the past few months who are seeking a partnership with us to offer a true end-to-end incentive program solution and we see these as great opportunities for us.
There are a few companies that offer what we call the “trigger” part of the incentive program, and we believe that by incorporating our platform into their solution they will be offering their members a more complete end-to-end platform, including the currency and analytics features. So these incentives platforms are really a nice fit for us and what we are trying to accomplish as we build out our solution.
BTE: Mark mentioned during his presentation a number of different ways you guys plan to monetize your platform, can you elaborate on these various strategies?
Mark Hall: One thing we are seriously looking at from a monetization perspective is the idea of premium reduction, which for a family health plan can be as much as $320/month that they are getting back for participation in preventative health programs. With the passage of Obamacare, the law now allows for up to 50 percent of premium rebates for participation in healthy incentive programs, so we expect the potential premium reduction to go as high as $530/month for a family plan.
We are able to monetize that incentive, so instead of it ending up as a rebate on your paycheck every month its actually more of a trophy item, a real value-added incentive for the member that shows up on a card product. This can then be used to purchase gym memberships, cover co-pays, or buy healthy foods. In many ways, we are creating a healthy lifestyle card for consumers and we think there is real potential on that side of the business for us.
BTE: I am curious what your experience has been as you develop your mobile app, which allows users to scan a product while in the store to determine whether or not its covered by Tailored Spend? Do you see an opportunity to monetize that side of the business with creative relationship with retailers to offer deals on specific goods or services?
Mark Hall: I am actually testing the app now on my iPhone, and we are getting close to being able to offering it to outside individuals like yourself to test it independently. I absolutely think there is an opportunity to monetize this side of our business. I think we are coming into the market looking at a very unique opportunity where there are some really dedicated resources trying to address the problem of health and wellness.
When you think about the idea of progressive consumer spending versus a coupon model, just from a conceptual level, when you get a coupon its a one-time experience, its a discount of a product, you buy it and your done until you get your next coupon. Well, you flip that model on its head and you say, for everything that you purchase we’re going to give you an incentive toward your next purchase that is money sitting on a card product in your wallet, or even in your Google Wallet smartphone app, which can be used for the purchase of your next product. So we believe its a much more powerful motivator on the consumer side of things and another area that is probably a bit further down the road for us.
We are really excited about the future, and the Healthbox experience really set us on the right path by giving us access to some of the leaders in the health care business, which has really been beneficial and rapidly accelerated our business. Whats most unique about our opportunity is the chance to make meaningful impact on people’s lives by empowering them with a new currency that has never been introduced into the market before.