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A CEO's Las Vegas Lessons Give Health Startup New Cards to Play

A CEO's Las Vegas Lessons Give Health Startup New Cards to Play

(Bloomberg) -- Gary Loveman once got you to buy Celine Dion tickets in Las Vegas.

The former CEO of one of the biggest casino operators is now betting that the same tactics can convince you to take your blood-pressure pills.

Loveman, who left a teaching post at Harvard Business School in 1998 to run the company now known as Caesars Entertainment Corp. and more recently served as an executive at insurer Aetna Inc., has raised $25 million to create a startup that will initially provide services for large, self-insured employers that are paying the tab for their employees’ health coverage.

“I got you to stay a little longer, go to a show you hadn’t planned to see or eat at a restaurant you weren’t familiar with,” Loveman said in an interview. “We need that same kind of consistent persuasion to do the right things for your health that we get from people in our consumer lives all the time.”

A CEO's Las Vegas Lessons Give Health Startup New Cards to Play

Like RedBrick Health and others in the field, the new company, called Well Dot Inc., offers coaching and personalized payoffs in a bid to improve employee-health outcomes and lower costs for companies.

But Well offers a twist, adopting the persistent messaging of a Vegas ad campaign to try to get people to change their behavior. An annual prod from a primary care physician may not be enough to change a patient’s habits, Loveman says, but continual reminders and rewards could promote healthy lifestyle changes.

Loveman, 59, has lined up seed money from investors such as venture capital firm General Catalyst, Silicon Valley investor John Doerr and a subsidiary of the health insurer Blue Cross and Blue Shield of North Carolina.

Rising Costs

The cost of health care has grown increasingly burdensome in the U.S, something no one knows better than employers, which insure the majority of working-age American adults. Many have shifted more health costs to employees through higher deductibles and co-pays, while others have sought to take a more hands-on approach to reducing costs.

It’s something Loveman knows well from more than a decade as chief executive officer of Caesars, where he was a self-described dissatisfied buyer of health insurance. In his final years at Caesars, Loveman chaired a business group’s health committee, which would lead him to Aetna in 2015.

Loveman, who is also a part owner of the Boston Celtics basketball team, left Aetna at the start of 2018, not long after news broke of CVS Health Corp.’s bid to buy the health insurer for $68 billion. Well Chief Operating Officer David Werry also joined from Aetna, where he ran the insurer’s consumer-facing efforts.

Well works through a mobile app with a slick and colorful interface, which employees will be encouraged to download. The system harvests data from an employee’s medical history, such as a lapse in refills for a hypertension medication, and uses that information to encourage healthier habits.

For example, Well might work with an individual living with type 2 diabetes to schedule a test that can indicate early kidney disease, or provide information about fertility and maternity coverage to someone interested in starting a family. The company will also offer a mental health-care assessment tool that steers participants to different services depending on their results.

Completing certain health activities makes users eligible for rewards such as gift cards.

Proactive Approach

Well started up in February, and so far about 500 people use a beta form of the app, with another 500 planned by the end of the month. Loveman expects the number will rise into the tens of thousands next year, when the company begins working with subsets of workers for six large national employers. Well is also currently in early discussions to raise more money in another funding round.

Tackling health proactively, rather than once a condition has worsened and requires expensive care like hospitalization, is thought to reduce costs, and Well is among several new digital models taking that on.

But it’s an uphill battle. Employee turnover creates a disincentive for companies to invest in workers’ health, and even when offerings are available, many people don’t know about the tools or use them regularly. Loveman said that with Well engagement is key.

He differentiated the model from others because he said it helps users navigate their benefits as well as approach health proactively, across a broad set of conditions. More than 70% of eligible employees are using Well out of the gate, according to Werry.

Loveman tried similar tactics at Caesars in the 2000s for its employee base, which included dealers, cooks and housekeepers. He offered financial incentives to participate in biometric screenings that measured health indicators and added clinics in casinos, changes that had a “measurable and profound” effect, he said.

“It had been in my mind to build something like this for some time,” Loveman said.

To contact the editor responsible for this story: Mark Schoifet at mschoifet@bloomberg.net, Timothy Annett

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