| Through its ROGER system, PrevMed is taking a new, comprehensive approach to wellness through primary prevention and its scalable behavioral change model approach. As its channel to market, PrevMed is targeting large benefits providers – beginning with U.S. non-profit benefit providers and single provider and payer health care systems.
Many benefits providers and companies offer some type of wellness program. However, they have shown little effect in reducing the rising cost of healthcare or the loss of employee productivity due to illness and chronic conditions. In fact, more than 142 million North Americans suffer from chronic condition and diseases – with millions more diagnosed each year. This trend has contributed to skyrocketing healthcare costs that have increased more than 230% since 1990. It is estimated that more than $2.3 trillion was spent on healthcare in the U.S in 2006 – of which 78% was spent on chronic disease management. The cost of this same issue in Canada has now exceeded 80% of their total healthcare burden.
Although the U.S. spends more on healthcare than any other industrialized nation, its citizens are not the healthiest. The World Health Organization’s comparative analysis of the health of the world’s nations ranks the U.S. in the bottom quartile in all of the internationally accepted and recognized measures of population health. Additionally, healthcare spending is becoming an increasing burden on the U.S. economy even though it is estimated that almost 80% of all healthcare costs are the product of preventable illnesses. Total healthcare spending jumped 230% from $696 billion in 1990 to nearly $2.3 trillion in 2006. It is estimated that this number could reach $4.0 trillion or 20% of U.S. GDP by 2020. Similarly, our neighbors in Canada are suffering from an almost identical burden as a percentage of total healthcare expenditures.
The largest single cost to the U.S. healthcare system is the medical management of chronic diseases. Estimates indicate that more than 125 million individuals in the United States live with chronic conditions and diseases, and millions of new cases are diagnosed each year. Chronic disease management was estimated to be nearly $1.79 trillion or 78% of the total $2.3 trillion spent on healthcare in 2006 in the U.S. and 80% of the total in Canada. The impact of rising healthcare costs and deteriorating health among Americans also contributes to lost productivity among workers as well as other social costs associated with an ailing workforce.
The explosion in healthcare costs – including chronic disease management – has negatively impacted businesses and consumers alike:
• Healthcare premiums have more than doubled in five years
• Employers have cut back or eliminated much needed healthcare options
• More than 46 million people in the U.S. are uninsured
• The epidemiological data provided to PrevMed physicians by the Ontario Ministry of Health and Long Term Care showed identical trends and issues of chronic disease occurrence and prevalence to those found in our U.S. data
• Employee productivity levels continue to drop
However, the problem of escalating healthcare costs is largely preventable. Evidence based medicine has demonstrated that much of the chronic disease onset is preventable. Some 75%-80% of the monies spent on healthcare are allocated to treating – not curing or preventing – diseases that are largely preventable such as cardiovascular disease, cancers, and diabetes. Furthermore, The Centers for Disease Control have identified that eliminating poor nutrition, inactivity, and smoking can reduce the onset of CVD, CAD, stroke, and Type-2 diabetes by 80% and cancers by 40%. Such insight into to the prevention of common diseases has led to increased supply of health and wellness programs provided by employers or through insurance plans and increasing demand from plan participants.
Target Market
There are approximately 200 million U.S. citizens covered by employer sponsored health insurance. Preventive Medicine intends to take advantage of the growing use of the Internet as an effective way to reach millions of families who make up the U.S. workforce and who are covered by the health insurance sector with special focus on the non-profit providers.
2.4 Target Customers
Preventive Medicine will reach this market through employee benefit programs and the carriers and healthcare services sector companies that administer these programs in the U.S. and through relationships with the appropriate provincial ministries in Canada. Preventive Medicine intends to utilize a combination of medical, lifestyle, behavioral, and information technology capabilities to deliver its services to the insured population through “private labeling” and wholesale distribution.
2.5 Market Opportunity
Unlike other health and wellness programs, Preventive Medicine focuses on true primary prevention of chronic disease and the risk factors that lead to these diseases. The unique approach of the Preventive Medicine – Allen Behavioral Change Model, supported by visual and graphic information technology and methodologies, provide a distinct competitive advantage. Preventive Medicine believes that the implementation of its technology will help correct unsustainable trends in healthcare spending, contribute to a healthier population, and improve on any existing solution in the marketplace today.
There are a number of factors that have created an optimal environment and driving demand for Preventive Medicine’s services:
Condition
Number of
Americans Affected
Coronary heart disease
12.6 million
Diabetes
17 million
Pre-diabetic conditions
16 million
High blood pressure
50 million
Overweight/Obesity
68 million
Table 2: Prevalence of common diseases/ailments
Source:
• Companies and Government– Many healthcare plan fiduciaries have recently demonstrated the appetite to tackle long-term healthcare and benefits costs by integrating health and wellness programs into the health benefit plans offered to their beneficiaries. Overall, 81% of companies in the U.S. with fifty (50) or more employees now have some form of health promotion program.
• NOTE: THE SOURCE FOR THE DATA IN TABLE 2 IS “ANDERSON, GERARD, AND HORVATH. 2004
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• Emerging trends in healthcare programs include:
• Adopting approaches to prevention and wellness
• Using emerging technology, Intranets, and the Internet as a way of reaching large numbers of employees
• Encouraging employees to take active roles in their healthcare with prevention as a focus and creating incentives to reinforce accountability
• Emphasizing behavior change programs to support healthy lifestyles
• Using assessment tools to identify employees who are “at risk”
• Consumers – With more than 125 million Americans and 17 million Canadians suffering from chronic disease and conditions, a growing number of people are seeking innovative self service solutions in the healthcare arena. However, their choices are limited and limiting. Often they only have access to information member portals provided by their employers or insurance carriers. These are typically designed for disease management or at risk individuals, which leaves little value for others seeking to manage their health.
Increased awareness and demand for Preventive Medicine options among consumers in being driven by:
• A well established employer and government funded and enabled employee health benefits marketplace.
• A growing level of personal awareness as to the importance of individual and family health and well being.
• An increasing body of medical science which affirms that the primary prevention of chronic disease development can be achieved through lifestyle change modalities.
• Technology – Advances promoting and supporting human behavioral change and its application via the Internet are the key instruments to the delivery of individual and actionable prevention plans at a fraction of the cost of current programs. For this reason, PrevMed spent literally scores of person years in its initial year of existence co-authoring its proprietary behavioral change model with Dr. Michael Allen. The proliferation of the Internet, broadband access gains in the U.S. (Canada already has 81% percent household broadband access), and ubiquitous adoption has created an unparalleled opportunity to bring innovation to the healthcare industry.
Key trends in technology that will drive the adoption of Preventive Medicine’s service model include:
• An increased level of IT sophistication employed by carriers and other companies that administer these benefits will help facilitate the adoption of new programs
• 63% of adults and 81% of teenagers in the U.S. are online accessing the Internet for a variety of reasons including a majority who use the Internet’s resources for health and medical purposes (Pew Internet and American Life Project)
• 40% increase in “at home” broadband penetration/adoption from 2005 to 2006; 140 million Americans now have high speed connectivity (Pew)
• 81% penetration of broadband in Canadian households
• The development of e-learning technology and its successful application for performance enhancement across diverse sectors of the population
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