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Discovery Group
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Pursuing complementary forms of shared value to amplify social and business impact: Discovery Group

Discovery Group, a South African-based global insurance company, has produced impressive business and social results, including lower costs, increased market share, and improved customer health by pursuing complementary forms of shared value. Discovery is modifying its product offering and internal processes, partnering with many others, and advocating for nation-wide policy changes.

Developing new products and services: Health insurance that incentivizes healthier choices

Health insurance providers have high costs due to insurance claims from obesity-related diseases. In South Africa, NCDs and lifestyle-related diseases affect more than 40% of South African adults.[i] To reduce its overall risk and broaden its consumer base, the Discovery Group developed its premium Vitality Program to meet the needs of younger clients.

The Vitality program uses financial incentives to encourage members to make healthy lifestyle choices, awarding points for physical exercise, discounts on healthy foods, and points-based rewards ranging from reduced insurance premiums to travel options and shopping discounts. Discovery pays for Vitality members’ health club memberships, but only if they visit three times a month. They also offer a HealthyFoodbenefit, with discounts of 10-25% for foods on their HealthyFoodlist at local grocery stores.[ii] As a result of these benefits, gym usage among Vitality members increased by 22% over a 5-year period, and the proportion of HealthyFood™ being purchased increased by 3% in the first year.[iii] The use of benefit programs to engage members in healthy behavior change has also led to significantly reduced costs. For chronic conditions, risk-adjusted hospital costs are as much as 30% lower for engaged Vitality members. A fitness study showed that hospital admission rates are 10% lower and length of stay in hospital is 25% lower for highly-engaged Vitality members.[iv]

By encouraging improved long-term health outcomes for consumers, the Vitality program has contributed to Discovery gaining over 40% of South Africa’s private health insurance market to date.[v] Discovery continues to monitor business and social outcomes and is investigating the development of a low-cost version of the plan that could help target a larger proportion of the population.[vi]

Creating an enabling environment: Advocating for urban environments that foster active living

Discovery also advocates for improving urban infrastructure to make active living easier. To raise awareness and encourage policy change, Discovery Vitality collaborated with public health, physical activity, and urban planning experts to rank South Africa’s major metropolitan areas in physical activity-related health and infrastructure.[vii] The outcome was the Vitality Fittest City Index, ranking six metropolitan areas in areas such as self-reported physical activity, use of non-motorized transport, and the availability of facilities for physical activity. In their 2013 report, Discovery ranks each city and provides recommendations and action steps for educators, employers, community members and policymakers to help create urban environments that encourage movement.

Dr. Tracy Kolbe-Alexander, one of the index co-creators, notes that the intention of the index is to encourage people to move more. “We also hope that it will encourage policymakers and local government to create supportive environments which will improve the health and physical activity profile of their city,” says Kolbe-Alexander.[viii] Cooperation between public and private organizations to increase urban physical activity has the potential to improve health for as many as 1.3 million people in South Africa. Discovery’s efforts can make a significant contribution to population health while also improving Vitality’s bottom line.

Social Results:
  • Gym usage among Discovery customers participating in the Vitality program increased by 22% over a 5-year period, the proportion of HealthyFood™ being purchased increased by 3% in the first year, and hospital admission rates were 10% lower
  • The Vitality Fittest City Index resulted in action steps for educators, employers, community members, and policymakers to help create urban environments that encourage movement
Business Results:
  • Risk-adjusted hospital costs were as much as 30% lower for engaged Vitality members
  • By encouraging improved long-term health outcomes for consumers, the Vitality program has contributed to Discovery gaining over 40% of South Africa’s private health insurance market to date
  • Discovery hopes to reduce costs by increasing customer health due to more active living in urban areas

 


[i] Discovery, “Healthy Active Kids: South Africa Report Card,” Discovery, 2010.

[ii] Discovery, “2012 Vitality Journal: Reducing the Cost of Healthcare through Lifestyle Intervention,” Discovery, 2012.

[iii] Discovery, “2012 Vitality Journal.”

[iv] Discovery, “Vitality Overview: January 2014,” Discovery, 2014, 10.

[v] Dixon-Fyle and Kowallik, “Engaging Consumers.”

[vi] Discovery, “Sustainable Development Report 2013,” Discovery, 2013.

[vii] Discovery, “Capetown Ranked #1 in Discovery’s Vitality Fittest City Index,” Discovery, June 13, 2013, accessed February 12, 2014, https://www.mynewsdesk.com/za/discovery-holdings-ltd/pressreleases/cape-town-ranked-1-in-discovery-s-vitality-fittest-city-index-876236

[viii] Discovery, “Move Your City 2013: Vitality Fittest City Index,” Discovery, 2013, 6, accessed January 30, 2014, https://www.discovery.co.za/discovery_coza/web/linked_content/pdfs/vitality/fittest_city_book.pdf.