29 Jan 2015
Rupert Murdoch wears one, so does Gwyneth Paltrow. Wearable fitness devices are the latest must-have accessory for health conscious media moguls, celebrities and ordinary Australians. So it was only a matter of time until health insurers got behind the trend.
Some major health funds have recently launched campaigns to attract new members by offering them free fitness-tracking devices. Wristbands such as Fitbit, Polar Loop, Jawbone and Vivofit, which normally retail for more than $120, are among the wireless activity trackers insurers have been giving away to lure policy holders.
These high-tech accessories not only count distances walked or run and calculate calories burnt, but some of them also measure heart rates, blood oxygen and glucose levels. The data is transferred to a smart phone or PC, where it is logged and analysed to give a general indication of wellbeing.
While gadget giveaways may seem like a gimmick, it’s not surprising that insurers are encouraging members to be more active and monitor their own progress rather than rushing to the doctor as their first line of defence.
A growing problem
Although Australians are among the world’s most long-lived individuals, with a life expectancy ranked in the top ten out of more than 200 nationalities,i there are growing concerns that our Western lifestyles are contributing to soaring obesity rates and chronic illness.
Obesity can precipitate diabetes, stroke and heart disease, which in turn creates a significant burden on health systems struggling to treat an ageing but increasingly unhealthy population. Treating diabetes alone costs more than $10 billion a year and 10 per cent of that is estimated to be related to obesity.ii
Currently, about a quarter of Australians are classified as obese, but this figure is forecast to rise sharply to two-thirds of the population in a decade’s time, if sedentary lifestyle habits persist.iii
Health authorities estimate that treating obesity-related conditions costs the economy almost $57 billion a year.iv With obesity also affecting 25 per cent of children, the future of healthcare looks costly and unsustainable.v
It is no surprise then that governments are scrambling to limit costs in the face of an increase of almost 75 per cent in health funding over the past decade.vi Australia spent $147.4 billion on health in 2012-13, almost 10 per cent of the nation’s economic turnover.vii
Focus on prevention
Faced with the rising cost of hospital care, health insurers are doing their bit to encourage Australians to remain healthy with a range of incentives including mobile apps and online exercise and dietary programs as well as free fitness tracking devices.
For example, one fundviii will soon offer members a free support program to help those who have been discharged from hospital to manage risk factors associated with their illness and hopefully keep them out of surgery in future.
Other fitness-related giveaways to those who sign up include vouchers for fitness products such as running shoes, discounts on big brand vitamins, gym memberships and weight control programs.ix
Reducing health costs
While the business case for insurance companies to control costs is compelling, it is even more so for individuals whose out-of-pocket expenses as a proportion of total health funding, at 17.8 per cent, are high by international standards.x
Perhaps keeping tabs on your personal fitness could be the best insurance against big medical bills and poor health. But before switching funds based on a special promotion, talk with your Financial Adviser to discover the policy that best meets your needs.
vii Australian Institute of Health and Welfare, http://www.aihw.gov.au/media-release-detail/?id=60129548933