Apple and Aetna announce a new watch-driven wellness program

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Apple and payer Aetna have teamed up to create a new iPhone app that rewards Aetna members for taking healthy actions and meeting fitness goals - which will be tracked by the Apple Watch.

Aetna members have the opportunity to earn rewards like gift cards to major retailers or the ability to recoup the cost of their Apple Watch. The app, dubbed Attain, is expected to launch in spring 2019 and is the culmination of a partnership between the two companies originally formed in 2016.

Aetna likely anticipates the cobranded app can act as a lever to boost customer lifetime value (CLV). CLV refers to the profit an insurer can derive from a customer, and is broadly defined as premiums collected minus medical claims reimbursed by an insurer. Attain is designed to enhance CLV by incentivizing higher activity levels and preventative care:

• Higher step counts can reduce healthcare costs. Aetna could reap massive gains from boosting members' activity levels: Annual medical costs for consumers who walk 8,000 steps are around $3,000, while the costs for those who take 2,000 steps or fewer are over $10,000, past research shows. 
• And guiding members to preventative care may reduce downstream medical bills. For example, incentivizing customers to vaccinate or receive regular health screenings could help catch diseases earlier or ward off conditions that lead to costly hospitalizations.
• But deriving value from the Watch program hinges on Aetna reaching older consumers. Aetna members need both an iPhone 5S or later and any Apple Watch to use Attain, which could pose a significant barrier to participation among older consumers: Wearable and smartphone adoption decline with age. Given that older consumers tend to have the highest healthcare costs - and stand to gain the most from health interventions - driving adoption among this cohort will be key to the program's success.

Apple's health play takes a leap forward with each major payer partnership it lands. Apple now has partnerships with Aetna, John Hancock, and UnitedHealth, which collectively serve about 100 million customers. In addition to potentially boosting sales, closer ties with payers lay the groundwork for Apple's success in healthcare - an industry the tech giant has pinned as key to its growth.

For example, Apple could use its payer partnerships to help propagate Apple Health Records, an iPhone feature that stores consumer health records and can augment provider organizations' electronic health records. Apple may look to incorporate payers' consumer health data into Health Records, making its platform a more powerful repository of health data, for instance. As a result, the platform would become valuable to providers, potentially allowing Apple to convince more health systems to sign up for the service.

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