Monday, December 10, 2007

Newly named Virgin HealthMiles aims to reward good health

By Ryan McBride

A Boston-based subsidiary of billionaire Richard Branson's Virgin Group plans to give itself a new edge among providers of online programs that reward people for leading healthier lifestyles.

Virgin HealthMiles Inc. -- originally called Virgin Life Care -- expects in the coming months to begin offering heart-rate monitors and cyclometers to provide more ways for its program participants to track their activity, said Andrew Pelosi, a vice president of the company.

The company and its competitors say they have seen dramatic increases in sales of their health-rewards services to employers, but now they face the challenge of luring employees to participate in the optional programs. Virgin aims to gain an advantage over its competitors with its new monitors.

"I think it will be an advantage because it provides people who have more intensive workouts" with better ways to keep track of those workouts, Pelosi said.

The firm is paid by employers based on the number and, sometimes, the performance, of employees who participate in its program. Based on individual levels of activity, the employees earn points toward purchases with retailers such as Target Corp. and Home Depot Inc. Its participants use pedometers to record activity levels.

Pelosi said the firm now has about 50 employer clients, including Louisville-based health benefits giant Humana Inc., which employs more than 22,000 workers.

Still, at least one of Virgin's competitors isn't concerned about the firm's new monitor offerings. Aaron Day, chief executive of Boston's Tangerine Wellness Inc., said he "seriously doubts" that Virgin's monitors would persuade more people to use its services.

Some people don't like to wear such devices, Day said. Unlike Virgin, Tangerine gives awards to its program participants for reaching weight-loss goals.

Tangerine and Virgin, both private firms, declined to release sales figures for competitive reasons. But both firms say they have seen exponential growth in revenue, and expect to become profitable within the next year.