Today, more than ever, corporations face the challenge of controlling rising healthcare costs. Comprehensive wellness has emerged as today’s key differentiator in the corporate marketplace, proving a consistent 3:1 return on investment (ROI) over three to five years (Grossmeier, 2012). More and more, corporations and brokers will choose health plans and programs based on comprehensive wellness with a proven ROI model. Not only does this pose a great opportunity for healthcare companies, but also a very timely one given the backlog of workplace wellness demand, the impending 2014 insurance exchanges and the trend of member-centric service offerings. To leverage comprehensive wellness as the key differentiator, healthcare corporations must pursue a niche strategy by exploring a combination of key wellness strengths relevant to this marketplace.
What is wellness, and what is a comprehensive wellness program?
Wellness, as defined by Charles B. Corbin of Arizona State University, is a “multidimensional state of being describing the existence of positive health in an individual as exemplified by quality of life and a sense of well-being.” Wellness is not only physical, but also spans the emotional and social realms allowing one to function optimally.
A comprehensive wellness program is one that addresses all areas of health for all segments of a given population. Traditionally, most managed care organizations had focused on treatment of illness once illness occurs; a retrospective phenomenon known as disease management. A comprehensive wellness program should not only entail traditional disease management, but also include prospective efforts that predict and prevent potential risk of illnesses and maintain good health for the already healthy. Due to the potential cost savings via proven ROI, corporations are beginning to see wellness programs as a strategic asset today rather than an auxiliary benefit.
Corporate wellness: A fragmented marketplace.
A fragmented market is one that has many small competitors and has structural factors that inhibit one or a few suppliers from dominating the market. The automotive maintenance market is a good example. There is not one firm that can provide all the desired benefits for consumers of the automobile maintenance market. Structural factors, such as geographic location, prevent one firm or a few large firms from servicing all the automobiles in the United States. As a result, there are myriad automobile maintenance firms, even within the same city.
The corporate wellness market follows a pattern similar to that of the automobile maintenance market. According to the IBIS World Market Research Report of December 2011, the corporate wellness services market is a $2 billion market with more than 7,400 businesses employing over 14,000 employees (Corporate Wellness Services in the US: Market, 2011). Even in a given city or locale, there are several wellness providers. Furthermore, no two populations have the same exact need or the same propensity to change their lifestyle to incorporate wellness. This cultural disparity serves as a key structural reason for the marketplace remaining fragmented.
Where is the wellness market headed?
The corporate wellness market will likely remain fragmented until health insurance exchanges become operational in 2014—and perhaps even beyond. There are several factors contributing to this market remaining fragmented.
The opportunity is in niche markets.
Given that the marketplace will remain fragmented, solution providers can tailor their services and solutions to the needs of specialized markets and build niche businesses. Due to current market fragmentation, a given solution provider needs to only identify a few benefits that resonate with its niche market. As a result, comprehensive wellness solutions face a unique opportunity today to find a niche and then develop and grow it.
The time for comprehensive wellness is now.
Not only is the opportunity for comprehensive wellness programs evident, it is also very timely. The key factors below make wellness solutions compelling today more so than the past.