1

Digital Disruption in Healthcare

2

Three trends at play

3

1. Physical inactivity is a global epidemic

4

2. Triggering physical activity has a profound impact on mortality risk

5

3. Growing evidence of impact of wearables

Source: Vitality

Increasing uptake of wearables at CorporatesVitality incentives promote usage

Wearables 0%

100%

1 2 3 4 5 6 7 8 9 10 11 1213 14 15 16

Relative use of wearable devices after activation (months)

Non-Vitality members Vitality members

6

Healthcare | “State of the nation”

6

The cost of progress

US inflation, 1978 =100

1978 90 2000 12

0

100

250

500

750

1,000

1,250College tuition

Medical care

Consumer prices

Average wage

Source: Thomson Reuters: “The Cost Disease”, by William Baumol, 2012: The Economist

Acquired by

Aetna

Acquired by

Anthem

Pre-acquisitions Post acquisitions

$131bn

46 m customers

$109bn

54 m customers

$107bn

38 m customers

Industry consolidationRising healthcare costs

35

49

58

74

131

Revenue($bn,2014)

15

14

24

39

46

Members(m)

Pla

ye

rs s

eek t

o a

gg

reg

ate

7

Consumer health | “State of the nation”

7

Industry response: Proliferation

Source: Intel

Always MooreNumber of transistors in CPU*

Log scale

1960 70 80 90 2000 10 14

1

102

104

106

108

1010

*Central processing unit

Movement Heart Rate Sleep Temperature RespirationSkin

Conductance

Brain

ActivityHydration Posture Glucose

Oxygen

LevelHeart Rate Variability

Muscle

Activity

Blood

Pressure

Eye

TrackingIngestion

Costs dropping dramatically

Pla

yers

seek t

o

pers

on

alise

8

These “two cities” frame Corporate Wellness today

8

Healthcare

Costs go down due to improvements in technology and

production methods

Costs go up due to new technology, medicine and scarcity of

skills

Consumer Health

Corporate Wellness today

Industry players seek to personalize their technologies

(‘quantified self’)Industry players seek to aggregate and scale

Industry is undergoing proliferationIndustry is therefore undergoing consolidation across providers

and payors

People continue to live longer, but in poorer health – chronic disease levels continue to rise, despite increases in life expectancy

9

Vitality’s progressive response

9

10

Traditional relationship models

10

11

Bridging the divide

11

Largest health and life insurers Largest consumer company

12

Member reaction

12