Healthcare Technology Featured Article

June 23, 2014

Could Wearable Tech Tie Into Health Insurance?


There's an old concept going around, by which users would be able to plug a device into a car, and the device would report on the user's driving habits, distance, and things like that to produce a real-time car insurance figure based on these numbers. But thanks to the growth of wearable technology, that concept is being applied in other directions as well, and it's even starting to emerge in perhaps the least likely of all places: health insurance.

The concept goes something like this: users who sign up for health insurance are required to wear an activity tracker or something similar, like a Fitbit, a Jawbone Up, or any of a growing host of other such devices. The data generated by the activity tracker is then relayed back to the insurance company, who concocts a new rate based on each user's health-related performance that day. It may sound outlandish right now, mostly because wearable devices aren't exactly a big part of life as we know it right now, but that's a matter that's changing. While just 10 percent of American  adults currently own a fitness tracker, a recent Pew Research study says that number is poised to explode, even in as little as 10 years from now. That's getting not only the interest of insurance companies, but also employers, who are eager to use the devices to help drive wellness programs.

With the data from such devices in hand, companies can better offer rewards and disincentives alike for various health behaviors—gift cards and the like for steps walked and high performance on similar metrics—and help try to control the spiraling costs of health insurance. But that's leading to some distressing dimensions, including fields the activity tracker and accompanying app makers are concerned about going into. Runtastic, a widely-used running app, found its founder and CEO Florian Gschwandter called in for frequent meetings with United States and Austrian insurance companies, who were interested in finding out how to get access to the content generated by fitness apps like Runtastic. Gschwandter ultimately stopped taking such meetings saying “They are trying to learn. We are not a consultant.” But the demand for such knowledge has yet to decline. Indeed, reports suggest that Fitbit sales to employers outright are one of the fastest growing parts of the company's bottom line. Health insurance companies are already doing this to some extent, checking information on smoking, drinking and the body mass index (BMI), but these measures really only go so far. With the use of fitness trackers and the like, it might get to the point where real-time measurement becomes possible and desirable.

The implications are, of course, staggering in scope. How long until there are lawsuits to keep movement data private? All this data generated in turn must go somewhere; how is it to be transmitted? Is it secure? Can it be intercepted and used against us in a blackmail sense? Will we actually see criminals so brazen as to say “Pay me or this information about you at All You Can Eat Cruller Day goes to your health insurance provider.”? Who supplies the devices in question? What about the effectiveness of said devices; will those who can't afford the best in fitness tracker be forced to pay more for insurance?

This is a situation that could mean some great or terrible things, depending on execution. Only time will tell just which come around, but it's a pretty safe bet that no one will walk away from this unaffected.



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