Fitbit is rolling deeper into health with new programs and hardware after a lackluster Q4

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Fitbit is rolling deeper into health with new programs and hardware after a lackluster Q4
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On the heels of a lackluster quarter for the wearables developer, Fitbit unveiled what's in store for next quarter: It's plunging head-on into new health initiatives, MobiHealthNews reports.

FitBit Has Recovered From A Prolonged Decline In Revenue Growth

Among the new initiatives are boosted smartwatch health features - including sleep-quality trackers and a voice skill from Amazon's Alexa that can initiate exercise regimens - as well as a health-focused subscription program, dubbed Fitbit Premium. We have posited that Fitbit should build out its health division to recoup from lagging revenue- and its recent announcement gives us a glimpse into how it's narrowing in on this space.

Here's what it means: Fitbit's new health-focused ventures portend the opportunity for new and expanded relationships with healthcare partners.

  • The new subscription health service could reel in payer partners since it upgrades Fitbit's current employer-focused program. Fitbit Premium - which costs $10 monthly and will eventually be covered under its employer program - mines consumer data to provide personalized health insights and tips related to sleep, nutrition, and exercise. A program that's tailored to individual users could lure in employers who are having trouble getting employees on board with wellness programs that aren't personalized: Over half of employers offer a "one-size-fits-all" wellness program, but 80% of employees say they'd be more willing to participate if programs were more personalized, per a 2019 Welltok survey. It makes sense that Fitbit would want to buckle down on building out its payer-focused initiatives because its Fitbit Health Solutions, its health segment, buoyed revenue growth the past couple of quarters.
  • And physicians could make use of the wider breadth of consumer health data stockpiled within Fitbit's new smartwatch health features. COO of Fitbit Health Solutions Amy McDonough said that Fitbit Premium was created collaboratively with physicians so consumers could share actionable data with their doctors. Access to patients' day-to-day data could offer doctors a fuller picture of how patients are faring and help guide care - especially given that Fitbit plans to use the Premium service to get into the management of costly chronic conditions like diabetes, sleep apnea, and hypertension. And since the program was architected with physicians in mind, provider woes associated with sifting through unstructured, clunky wearables data might not be an issue.

The bigger picture: While Fitbit's health services and new features could propel its health play forward, they could also put it up against new competitors.

Digital health companies flaunting tools for managing chronic diseases have attracted attention from consumers, payers, and investors to cushion chronic disease spending - which accounts for 90% of healthcare costs in the US. And this isn't Fitbit's first foray into the space: It integrates with diabetes management company Livongo so step count data picked up from the wearables will sync with Livongo's app, for example.

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Companies like Livongo and Virta Health - both of which are taking a digital approach treating diabetes - have been racing to prove their efficacy on boosting health outcomes and lowering costs. Fitbit already boasts a long list of over 100 payer partners, so it might not have difficulty finding clients - but in order for the disease management service to take off, Fitbit will need to display proof that its service is positively affecting health outcomes and stomping down costs for payers.

And its broadened health play should help Fitbit keep an edge over Apple. Apple has also formed partnerships with major payers to boost the reach of the Apple Watch, but Fitbit's lower price and new features should continue to woo large employer clients that don't want to pay up for pricier Apple Watches. And we've seen some large-scale health initiatives - like those forged by Singapore and UK governments - tap Fitbit over other wearables. With its new health boost, we could see Fitbit get integrated into more programs.

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