Humana, Healthrageous and some object lessons

The acquisition of the assets of Partners HealthCare spinoff Healthrageous by insurance and health service giant Humana is reverberating in the field in the US, particularly those in the buzziest digital health sectors. Some may look away, but a hard look provides some object lessons at the sheer unpredictability of the field for those who are innovating and attempting to shape consumer behavior and health. (Not behavioral health)

• Healthrageous had an impressive lineage and credibility. Developed over three years at Partners HealthCare, it was spun off in 2010, PHC members on the board, leadership from well-known/regarded figures such as Rick Lee and Mary Beth Chalk–and enjoyed abundant, rapid startup funding–$12.5 million in two rounds, the last exactly one year ago, from equally impressive investors, reportedly $15 million total. No raiding the credit cards here.
• It occupied what everyone for the past few years thought of as a sweet spot–personal health management targeted to employers/benefit managers along with health plans to lower costs that combined sensor-based telehealth data with individualized coaching and feedback–and data from a broad base of 10,000 users.
• The delivery evolved over time. Their first iteration, h!Go, flopped. But they went beyond the then iMetrikus, now Numera home hub to mobile health with Telcare, Fitlinxx and others. (More background in Mobihealthnews’ initial article, HISTalk [WARNING 31 Aug 2014: linked page may now be infected with malware] and Xconomy.)
• It piloted with major health plans (three Blues) and pharmas (Boehringer Ingelheim). We chuckled at their alliance with Ford in their ‘car that cares’ in January 2012, but it certainly gained attention.
• It did its research, claiming that 30 percent of users had clinical improvement in their health. (Oct 2012 funding release)

Yet one year after that $6.5 million funding round, it shut down before selling its assets to Humana, There was a 2013 that was oddly quiet, which was a clue. The follow up Mobihealthnews article asserts that Healthrageous’ assets and IP will be used to build out and/or reboot HumanaVitality, a loyalty/rewards type program developed in a  JV with a South African company, Discovery Holdings. A true ‘pffft’ of an ending to a once-promising company.

Obviously through last year, they were still not in a profitable business model, but there was enough confidence to obtain an additional round of financing. To this Editor, the fatal flaw could very well have been their unique selling proposition. What has happened this year cut to its very reason for being and collapsed it in a way that could not have been foreseen. Employers saw a far easier, direct way of solving their healthcare cost problems: dump part-time employees, spouses and retirees onto the insurance exchanges (UPS, IBM and so on.) This strategy has now proved to be too clever by half, but who knew even two weeks ago? Insurance and health plan companies shoved consumer engagement to the long-term corner as dealing with exchange business and shoring up corporate/administrative services only (ASO) business pushed to the front. Consumer engagement and quantifiable behavior change has always been a bit squishy and non-linear–nor has long-term lasting change been proven. Finally, CE programs tend to grow, become more complex–and complex in the pursuit of health does not engage consumers except the QS Obsessives.

Thus the demise of Healthrageous seems to indicate that consumer engagement has become Cinderella After Midnight.