Reciprocity Health Uses Smart Financial Incentives to Help Patients Build Healthy Habits
Utilizing lessons learned in ecommerce and education, Reciprocity Health’s TheraPay® app financially rewards patients for successful adherence to their care journey with the goal of offering overall economic stability.
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Challenge
Health plan non-adherence can take many forms but it’s almost always detrimental, for the patient and society alike. According to the American Journal of Managed Care (AJMC), 50% of Americans tasked with maintaining a long-term medical regimen don’t keep up with it, causing $500 billion in avoidable healthcare costs and over 125,000 preventable deaths per year.
The reasons that patients stop following an established care plan are as varied as the patients themselves. For some, it stems from a lack of knowledge or motivation, while for others non-compliance is related to socio-economic conditions (“Do I refill my medication or pay my rent and feed my family?”).
Patient incentive programs have been created in an effort to promote better health plan adherence. On the surface, offering perks to stick with a care regimen would seem appealing. But maintaining these programs across a broad spectrum of health needs has proven difficult. They are complex and lack the administrative support and operational know-how to successfully inspire consistent care plan adherence.
Another issue with current incentive programs is that while they entice patients to seek care, they don’t provide resources that make paying for that care easier — treatment, prescriptions, transportation to facilities, eating for better health, and more. These all take a heavy financial toll on low-income individuals and families, causing overwhelm, fear, and anxiety, which exacerbate care plan non-adherence.
How, then, to motivate patients? Is there a way to target an incentive program to help people become better stewards of both their physical and financial health?
Serial entrepreneur Matt Swanson, CEO & Co-founder of Reciprocity Health, has an answer to those questions.
Origin Story
When Matt Swanson founded FineStationery.com in Delaware in 1999 it was hailed as the first eCommerce site in the state. By the time it was acquired by 1800Flowers in 2011, Swanson had made a name for himself as a tech entrepreneur who could solve greenfield problems. For his next project he took his experience as a creative problem solver and took on education reform, becoming the Executive Chairman of Innovative Schools Development Corporation.
During his time at the organization, Swanson launched four inner city charter high schools that embodied unique and different models. They offered dual language for Spanish speakers, early college education, and other highly innovative educational programs. The role allowed Swanson to personally engage with students and their parents, and he quickly realized the systemic issues facing this underserved population. It wasn’t just about showing up to school on time and having your homework done. It was about addressing mental health and improving nutrition and sleep.
Around this time, then Delaware Governor Jack Markell and his Secretary of Health were applying to CMS (Centers for Medicare and Medicaid Service) and its subdivision CMMI (Center for Medicare and Medicaid Innovation) for an innovation grant — called “State Innovation Models initiative” — for the state to transform the healthcare system. Their goal was to switch from a fee-for-service to a value-based payment plan to make it more equitable for providers, payers, and patients. Coming up with a unified strategy between health systems, health plans, and the state government leadership, however, was virtually impossible due to each group pushing their own agenda. What was needed was an objective outsider to move everyone in the same direction. Someone without any skin in the game. Governor Jack Markell called on Matt Swanson.
Swanson pointed out his lack of direct healthcare experience. But to Markell, that was a positive. He needed a smart, fresh perspective from outside the industry. Swanson dove in and started to see the underlying issues. The same social determinants he’d observed in public schools negatively impacting learning were keeping people from adhering to healthcare plans. And this non-adherence was leading to higher costs for everyone. Swanson proposed that if insurance companies were comfortable paying incentives to providers to give better care, what about financial incentives that encouraged patients to engage in their wellbeing and thus benefited the entire system?
Coincidentally, CMS was doing field work on just that topic at the same time Swanson was having these discussions with Governor Markell’s team. After doing a study across 10 states exploring the power of financial incentives paid to Medicaid members, CMS discovered that when structured well, these were very powerful in encouraging people to maintain and manage their chronic conditions. The key was “structured well” and offering these incentives was extremely complicated and sophisticated work. Most Medicaid plans did not have the expertise nor the administrative capacity to offer it.
Upon hearing this, Swanson saw an opportunity for a company to take on that complexity on a digital platform and offer it as a service to Medicaid and other managed care organizations (MCOs) and insurance players. If that platform became a partner that brought in the expertise and capability to fill that knowledge and administrative gap, it would be a win for everyone.
With that in mind, Swanson gathered a team of experts and innovators, and created Reciprocity Health, Inc., and the TheraPay® app.
Under the Hood
The Reciprocity Health TheraPay app has three pillars: clarification, motivation, and facilitation.
Clarification simplifies a patient’s care journey by providing clearly communicated next steps and important health reminders in a user’s native language. Fulfilling those steps is also gamified — “do this, get this” — to make them more accessible and manageable, with financial rewards given immediately upon task completion.
The motivation pillar helps a patient understand the connection between the effort required to complete a task and the size of their reward for doing so by communicating that information in easy-to-understand terms.
Facilitation deals with accessibility. The app allows you to complete each step of your care journey via the phone in real time whenever possible or lends assistance in completing offline tasks, like providing directions to the nearest clinic for lab work.
Upon joining TheraPay, a patient receives a smart, reloadable debit reward card. Every time a user fulfills one of the health commitments specific to their care journey — watch an educational video, fill out a risk survey, go to a weigh-in, etc. — they see and then immediately receive the reward associated with that step on their card. That person can use it for whatever they need, with certain client-directed restrictions of course, such as disabling purchases of alcohol, tobacco, or firearms.
Patients can also complete each of these tasks directly through the TheraPay app, making it easier to maintain and adhere to a healthy lifestyle. Within certain care programs, users can also receive deep discounts on access to care transportation, healthy meal delivery, prescriptions, and more through their phone.
Reciprocity Health bases its TheraPay app on a marriage of behavioral economics and consumer science with its proprietary CARE engine: Choice Architecture (a behavioral economics term), Responsive Engagement (consumer science). Through this collaboration, the company built a platform that engages and motivates populations and subpopulations in ways they haven’t previously experienced or been encouraged to engage in before.
The technology allows it to customize different solutions for different providers to address diverse populations and subpopulations more effectively. For example, when a client approaches them with a unique curriculum — “We have a high-risk maternal health program, what do you propose?” — Reciprocity Health builds a model for that particular care journey with incentives, tasks, reminders, nudges, and more focused on those specific healthcare needs. In doing so, it provides successful health management for populations previously unable to accomplish or adhere to it.
In addition, the company is mindful about staying within all regulatory and financial boundaries so as not to create burdens for the Medicaid and Medicare populations they serve — for example, $600 or less per year does not require a 1099. And yet, they have whole households that are now reaping up to $600 per person in rewards because each family member is on the program. Recognizing the opportunity in this, Reciprocity Health aligned with a community bank to onboard unbanked Medicaid and Medicare individuals to shift away from check-cashing services and open savings accounts to support financial stability.
Our Take
Matt Swanson is the right person in the right place at the right time to solve a major problem in healthcare. His success in tech married with his boots-on-the-ground experience in education gives him the ideal pedigree to address deep-seated issues in healthcare.
The market is responding positively. Reciprocity recently signed a three-year partnership with Highmark Blue Cross and Blue Shield; is launching their program with Healthright, the largest Federally Qualified Health Center in West Virginia, for diabetes programming; is in the process of onboarding self-insured employers; and is now expanding operations into its sixth state. Because of their condition-agnostic model, Reciprocity Health has broad and diverse reach, making it possible to support multiple clients and customize accordingly.
That ability to expand the support it provides to encourage health adherence among broader populations excites us, but Reciprocity Health is innovating healthcare in another way that is equally intriguing. By promoting not only physical wellbeing, but a better quality of life in general for an overlooked population, it takes healthcare to the next level. TheraPay incentivizes patients to maintain their care journey, yes, but Reciprocity Health gives a population that once feared various institutions and systems the tools and desire to live their best lives.
Join us in welcoming Matt Swanson and the team at Reciprocity Health to the StartUp Health community.
Connect with Reciprocity Health via email
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Published: Sep 7, 2023