White Paper Shows How Managing Health Could Increase Retirement Income

The paper shows employees who adhere to treatment plans and adopt simple healthier lifestyle behaviors can save on out-of-pocket health care costs and invest that savings to have additional income in retirement.

HealthView Services, a provider of health care cost data to financial service firms, and Mercy, a health system, launched a joint venture, HealthyCapital, which provides data and applications that calculate expected health care costs for individuals based on health condition, age, gender and where they live.

HealthyCapital’s first white paper, “Building Wealth Through Wellness: Incentivizing Healthy Behaviors to Reduce Healthcare Costs and Increase Retirement Savings,” illustrates how the effective management of chronic conditions can increase longevity and savings, reduce health care costs for individuals and employers, and, if the savings are invested in 401(k) plans, generate substantial income in retirement.

“Half of all adults in the U.S. have a chronic condition, and around 50% stop taking prescribed medications within six months of their diagnosis,” says Dr. Raymond Weick, chief medical officer, HealthyCapital, and vice president, physician growth and business development at Mercy. “Until now we haven’t had access to actuarial data that shows individual patients the financial benefits of health condition management and lifestyle changes. HealthyCapital addresses this need.”

The paper shows that an average 45-year-old male with high blood pressure who adheres to his physician’s treatment plan and adopts simple healthier lifestyle behaviors will gain three years in life expectancy (84 to 87) and pay $65,000 less in pre-retirement, out-of-pocket health care costs than an average individual who only partially follows treatment protocols. An individual who chooses to invest these pre-retirement savings at a 6% return would have an additional $100,348 at retirement—adding 57% to the current average 64-year-old’s 401(k) retirement savings.

The paper also highlights the value of healthier employees for employers. Assuming the national average rate of diabetes of 9.3%, a company with 5,000 employees could reduce its annual health care expenditures by more than $927,000, for this disease alone, through the implementation of an effective condition management program.

Underscoring the benefits of clear financial incentives and condition management support, HealthyCapital will provide support services to help individuals follow treatment protocols and adopt healthier behaviors. The company’s platform offers users the option to sign up for health coaching through a text messaging service, which sends tailored messages based on individual health care goals.

“As individuals realize the financial benefits of healthier behaviors, and how investing these savings can increase retirement income, we see significant opportunities for financial institutions to simultaneously help their clients save for the future while growing assets under management,” says Ron Mastrogiovanni, CEO of HealthyCapital and president and CEO of HealthView Services.