Get Employees Engaged, Then You Can Talk About Wellness, Says Keas

6/25/13Follow @wroush

Just five chronic conditions—heart disease, cancer, diabetes, arthritis, and obesity—account for more than 75 percent of all healthcare costs in the U.S., according to the CDC. All are to some extent preventable. So if employers could just keep their workers a little healthier, they’d stand to save a ton of money on medical coverage.

That’s the financial logic behind the “wellness” programs many employers offer today as part of their overall health perks. But there’s a problem with most of these programs: they suck. A typical wellness program might include a vaccination reminder when flu season rolls around, a newsletter with a few healthy recipes inside, or—if employees are really lucky—a discount on a gym membership. As a result, most employees simply ignore them.

That’s why San Francisco-based Keas, which makes Web- and mobile-based tools designed to help corporate employees develop healthy habits through games and social networking, eventually stopped mentioning cost savings as part of its sales pitch to companies.

“We ask everyone, ‘Has any wellness program reduced your costs?’” says Josh Stevens, who joined Keas as CEO last winter. “After the laughter stops, they say, ‘Reduce cost? We don’t even know who’s using them.’”

So instead of promising corporate customers that their employees will get healthier, Keas now offers a more realistic guarantee. It says it will track how many employees participate in its team-based programs—which range from healthy-eating suggestions to exercise-related challenges—and make sure the number is dramatically higher than it was under an employer’s previous wellness plan.

“Lowering the cost of care is a long-term issue that we are not in the business of solving today,” says Stevens (pictured above). “We are in the business of driving engagement and behavior change, and we can guarantee that. We will double or triple [employee engagement] over the incumbent provider, or your money back.”

Doubling participation is not a difficult challenge at most companies, given that the rates are so low to begin with. Keas does employee surveys before it implements its own programs, and “in no case have we found utilization of over 10 percent,” Steven says.

Keas health challenge Leaderboard

A sample leaderboard from the Keas portal

Exactly why traditional wellness programs are lackluster to the point of invisibility is an interesting question. Stevens thinks it’s because they’re usually provided by big health insurers like Aetna or United Healthcare, who throw them in as free deal-sweeteners when they’re trying to get big self-insured companies to sign up for another term. “Plans use it as a tuck-in to say ‘Don’t switch to the other guy, stay with us and we’ll throw in wellness,’” he says. Because the programs cost money to administer, plans don’t have an incentive to invest much in them; and because employers aren’t really paying for them, there’s not much reason to monitor usage or encourage participation.

Keas is one of a number of technology-focused startups offering next-generation wellness programs, which typically aim to increase engagement through a combination of game mechanics and old-fashioned bribery (that is, financial incentives for doing things like completing a health risk assessment, getting cholesterol levels and other biomarkers screened, or joining exercise classes). Other companies in this set include Bellevue, WA-based Limeade, Framingham, MA-based Virgin HealthMiles, and Boston-based Healthrageous. But because most companies still get wellness programs from the big health plans, “we are not competing with the Virgin HealthMiles of the world,” Stevens says. “We are competing with the plans.”

It took a while for Keas, which has raised $25.5 million in venture backing from Atlas Venture and Ignition Partners, including an $8 million round announced today, to find its focus. The company was co-founded in 2008 by Adam Bosworth, a database scientist/polymath who was formerly the main architect behind Google Health, the personal health information service that Google shut down at the beginning of 2012. As I wrote in a previous profile of Keas, the company’s early years were rocky, as it tested and was ultimately forced to abandon Bosworth’s first idea, a Mint.com-like health dashboard for corporate employees.

The problem, Bosworth explained, was that for most employees, the dashboard conveyed only bad news. “All these people would enter their height and weight and lab data, and immediately we would tell them, ‘You suck. You’re overweight, your blood pressure is too high, your cholesterol is too high, you must change.’ They were gone in 60 seconds.”

So Keas undertook a dramatic pivot aimed at creating something more palatable. In 2010 it rolled out a new social-networking platform that organized employees into teams of six, which would face off in four 90-day challenges each year. The teams competed to see who could finish the most health-friendly actions, such as filling out heath assessments and quizzes, eating healthy lunches, or exercising five days a week. As each challenge progressed, the software offered only positive reinforcement—“an endless series of attaboys,” in Bosworth’s words—and the winning team received cash prizes and other incentives.

When Bosworth shared his pivot story with me in late 2011, the company had only a dozen or so paying corporate clients; it wasn’t clear yet whether the platform would be a hit. It was around the same time that Bosworth met Stevens, a former YouSendIt executive who came up to him after an Aspen Institute roundtable on the future of healthcare.

“Adam was the bright light on the panel, and I liked what he had to say, but I told him I didn’t believe his monetization model was sound,” says Stevens. “And he said, ‘Let’s go for a walk.’ What began as that 90-minute walk led to a whiteboard session, which ultimately led to ‘How do you become my CEO?’”

Stevens felt Keas hadn’t yet figured out what its target customers, companies large enough to be self-insured, really wanted—and more importantly, what they would pay for. So he spent his first 90 days on the road, talking to employers. And that’s when he learned the three things that he now considers Keas’s “indelible guideposts.”

The Keas news feed

The Keas news feed

The first was that Keas’s main competitors were the insurance companies. For a long time, employers didn’t care that the wellness plans the big insurers were providing were ineffective, since they weren’t really paying for them anyway. But as healthcare reforms advanced in Washington, D.C., and the conversation in the industry shifted toward bringing down the costs of chronic care, phantom wellness programs were coming to be seen as a lost opportunity.

The second insight was that employers might be willing to pay for wellness programs, if reliable measures of participation were built in. “If you don’t know how to measure engagement, you can’t get ahead of the curve,” Stevens says. Keas, luckily, already had that part covered.

Finally, Stevens’ conversations with employers convinced him that the Keas platform itself needed one more tweak. A program built entirely around team challenges, he realized, would leave out a lot of people—in particular, those who, for whatever reason, shy away from competition. “If we just do a game, we alienate people who don’t like games,” he says.

Employees can still earn points by participating in team-based challenges, but more than half of the 500 point-earning goals in the Keas library are now designed for individuals. Some are related to weight loss; some are simply designed to get people off their duffs for more time each day. “This is not about making people into athletes,” Stevens says. “It’s just about getting them to participate in their own health and take some responsibility, and it starts with self-awareness and goals. Teaming gets some stickiness around that, but there’s another half of the population who will share and kibbitz about it and get motivated that way.”

Also, it turned out that the 90-day challenges were too long to hold some employees’ attention. The cycle of events and rewards needed to be faster. So Keas switched to a monthly model in which the games, along with the editorial content on the Keas site, are refreshed every 30 days. Stevens calls it “going from an episodic approach to a heartbeat approach.”

Speaking of sharing, employees can post their progress and comment on their peer’s accomplishments on their company’s Keas portal. Steven says it resembles Facebook. Incidentally, this means that at companies where employees are forbidden from using the actual Facebook, Keas can turn into something of a substitute. “HR is putting us on every desktop, and the unintended consequence is that we are becoming the de facto social fabric for a lot of departments,” Stevens says.

Stevens thinks companies where lots of employees stay engaged in wellness programs will eventually begin to see a payback in the form of lower medical costs. But he says that could take three years or more. Meanwhile, he says most Keas clients reap a much more immediate reward: reduced absenteeism. Employees who are actively participating in wellness programs have lower stress levels and take less sick time, which means they’re more productive. “The top line benefit is having folks show up to work,” Stevens says.

It’s ironic, but the less emphasis Keas puts on health outcomes, the faster it seems to grow. Stevens says the company’s base of corporate clients has exploded to more than 100, each of which is paying about $50,000 per year. The list includes Pfizer, BAE Systems, Living Social, Delta Dental, SalesForce.com, Pandora, KLA-Tencor, and Valeant Pharmaceuticals.

Keas’s early years were rough because the company was “refining its product,” Stevens says. “And looking back, the market may not have been ready.” But a bigger insight, he says, is that “the value proposition is around engagement, not health. If you can get employees to stick with one thing, you have a shot at getting them to do a lot of other things. But if you can’t, everything else is just hogwash.”

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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