Low Hanging 🍊

Winston Health is on a mission to help employers and employees work together to lower healthcare costs and improve health outcomes. To get there we're taking a first principal's approach to rethinking health insurance and care. Fortunately, there is a ton of low-hanging fruit on our path toward better health outcomes and cheaper insurance. Let's dive into one example today!

On a beautiful day a few years ago, shortly after I learned the ins and outs of health insurance, I had a thought. "Why isn't Highmark (my insurer), sending me a push notification, at this very moment, to enjoy this beautiful day and go for a walk? Statistically, wouldn't they save money if I went for a walk? And wouldn't they be saving that money for free? How much can it cost to send a push notification?" On the surface, my idea was perfect. Highmark would send me a push notification, I'd be inspired to seize the day and go for a walk, and they'd save wheelbarrows full of money as a result of people living healthier lives. I had designed a digital printing press!

In the name of transparency and the pursuit of better health insurance, let's see if this idea holds water in 2023.

To answer our question we need to do some number crunching to determine a) the cost of sending a push notification, and b) a carrier's expected savings of getting a member to go for a walk.

Let's start by calculating the cost of sending a push notification.

Let's say for the sake of our example we're going to send one push notification daily. In order to send the push notification, we want to check the individual's current weather forecast to make sure it was a suitable day for a walk. If it is, we'll send a friendly nudge urging the member to get outside and enjoy the day.

Fortunately, getting someone's current weather forecast is easy and super cheap. It costs $99/yr. to register for an iOS developer license. The license allows you to publish your app to the App Store and take advantage of Apple's developer tools. One of those tools is called WeatherKit and included in your developer license is 500,000 calls to WeatherKit per month. WeatherKit may sound complicated, but it's pretty simple; it allows you to get the current weather and forecast for an area when provided with its location. So how much would it cost to check the weather for a member's current location? We'll use the following formula to determine the cost:

Cost Per Query = Developer License Cost / Number of "Free" WeatherKit Calls

To compare equally, we'll convert our numbers to the same units. When we do that we get:

Cost Per Query = ($99/yr. / 12 Months) / (500,000 "Free" Calls/mo.)

Cost Per Query = $0.000017

Great, so we now know how much it costs to determine a member's current and upcoming weather forecast. Next, we'll want to figure out how much it costs to send a push notification. Again, this information is widely available; it is free to send push notifications but you have to pay to maintain your server. Fortunately, servers and compute power are basically free with services such as AWS. For our purposes, we will say that sending a push notification is free! 🥳🍾 Our result? The total cost to send a personalized notification to encourage someone to go for a walk is $0.000017.

Finally, let's calculate a carrier's expected savings of getting a member to go for a walk.

For simplicity, let's look at the impact of walking on the prevention of heart attacks. 805,000 people have a heart attack every year, or roughly 1 in 400 people (0.25%). The average hospital stay as a result of a health attack is 2 days to a week, and the average cost of a 3-day hospital stay is $30,000. For our purposes, we'll say that a heart attack costs $30,000. So how much do heart attacks cost a carrier per person per day? We'll use the following formula to determine the cost:

Expected Yearly Cost of a Heart Attack Per Individual = Cost of a heart attack * prevalence of heart attacks

Expected Yearly Cost of a Heart Attack Per Individual = $30,000 * 0.25%

Expected Yearly Cost of a Heart Attack Per Individual = $75

Let's get our costs all in terms of day by dividing the above by 365, resulting in:

Expected Daily Cost of a Heart Attack Per Individual = $0.205 

We now know the daily costs of sending a push notification and the daily expected cost of a heart attack. From here it gets a bit fuzzy, but I'll do my best to stay intellectually honest and conservative with the calculations.

The fuzzy part of this example is determining the net new physical activity that a push notification will produce since our population's aggregate activity levels are baked into all of the aforementioned numbers. Fortunately, we do know that electronic notifications have been shown to increase walking levels in individuals and that 30 minutes/day, 5 days/week of moderate-intensity walking helps lower heart attack risk factors, namely coronary heart disease, by 19%. 

While we don't know precisely what the lift or net new physical activity would be from a push notification, we can calculate the reduction in heart attack risk that would be needed to reach the break-even point of sending a push notification. To determine the break-even point we'll use the following formula:

Reduction in Heart Attack Risk Needed For Break Even = Daily Push Notification Cost / Expected Daily Cost

Reduction in Heart Attack Risk Needed For Break Even = 0.008292682%

Put another way, for it to make financial sense for a carrier to send you a push notification to encourage you to go for a walk on a beautiful day, your behavior change as a result of the notification would need to lower your daily risk of a heart attack from 0.000684931% to 0.000684875% (0.25% to 0.249979375% annualized). Thankfully the difference between these numbers is so small that you can almost guarantee that sending daily push notifications encouraging physical activity is a net cost reducer. When you consider all of the other benefits of walking and physical activity (reduced stress, better mood, reduced risks of cancer, type II diabetes, etc.) the evidence for proactive and preventative insurance becomes crystal clear. 

What does this mean for you?

Ultimately we may never know why legacy systems of insurance and care don't implement the super simple and super effective solutions mentioned above. At Winston Health we are on a mission to help employers and employees work together to lower healthcare costs and improve health outcomes. We know that regular, moderate-intensity walking is a proven modality to improve the health of employees, and a simple daily push notification to encourage employees to enjoy the weather and walk is a proven method to lower healthcare costs and improve outcomes. This is the first of many ways we're rethinking health insurance from the bottom up. 🚀

Interested in upgrading to smart insurance for your company? Book a demo and try Winston Health today