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April 07, 2003
Guardian and Destiny Health Plan Joint Venture to Deliver Mainstream Consumer-Driven Healthcare
Milestone alliance validates acceptance of emerging insurance models
NEW YORK, NY and OAK BROOK, IL, April 7, 2003 - Responding to employers frustrated with rising healthcare costs, The Guardian Life Insurance Company of America has signed a letter of intent with Destiny Health, a subsidiary of Discovery, the world's largest consumer-driven healthcare company, to offer affordable consumer-driven healthcare coverage.
By combining Destiny's record of innovation with Guardian's reputation and reach, the proposed joint venture would create the first significant, national consumer-driven healthcare option at a time when the promise of cost containment through managed-care plans is fading.
The proposed joint venture between Destiny and Guardian, the nation's fourth-largest mutual life insurer, is aimed at leading the industry of consumer-driven health plans. Some industry experts expect that consumer-driven healthcare will capture half of the health insurance market in the next five years. Guardian and Destiny would offer Destiny's consumer-driven health plan to employer groups of all sizes in selected markets throughout the country, expanding Destiny's product distribution beyond the current Illinois and Wisconsin markets.
Research shows that employers are looking for alternatives to traditional managed-care plans in order to continue to provide their employees with comprehensive health care coverage. A new study by Employee Benefit Research Institute finds that escalating healthcare costs led to a significant decrease in the number of Americans covered by employer-based health plans this year, the first such decline since 1993. In addition, many experts predict that the cost of providing healthcare benefits will double by 2007.
"Consumer-driven healthcare is gaining recognition as a new alternative that gives businesses greater choice in benefits selection and control over their healthcare costs while building their relationship with their employees through better benefits," said Richard A. White, senior vice president of Guardian, Group Insurance. "We selected Destiny because of its proven, comprehensive consumer-driven model, which is unique to the industry and has shown the ability to control healthcare costs while delivering an outstanding level of insurance coverage."
Together, the two companies would offer Destiny's Comprehensive Consumer-Driven HealthcareTM model developed by its parent, Discovery, which has over a decade of experience in this area and currently covers more than 1.5 million members internationally. Destiny's consumer-driven health plan gives employers greater control over their healthcare benefit costs while giving employees the flexibility to choose medical services and coverage that best suit their needs. It also distinguishes between routine and significant healthcare costs and encourages members to adopt healthier lifestyles through a wellness program that rewards them with financial incentives.
Destiny has offered this plan in the U.S. since 2000. Destiny's experience with this plan shows that premium increases for renewals are consistently lower than the national averages, which for small and mid-size companies are running between 14 and 40 percent. In addition, clear evidence shows that participants change their behavior in positive and cost-effective ways - without forgoing necessary treatment.
"Guardian's strong national brand, extensive distribution system and established financial presence create an extraordinary opportunity to deliver the Destiny's consumer-driven health plan on a much broader scale," said Ken Linde, president and CEO of Destiny Health. "In addition to each of us bringing individual strengths to this partnership, we also share in Guardian's core value of providing exceptional customer service."
Guardian and Destiny Health intend to complete a definitive agreement during the second quarter of 2003, which will be signed subject to final approval by the board of directors of both companies.
About Guardian
The Guardian Life Insurance Company of America (Guardian) is the fourth largest mutual life insurance company in the United States. As of December 31, 2002, Guardian and its subsidiaries had $34.1 billion in assets. Founded in 1860, Guardian is listed among Fortune magazine's top 300 businesses-and in 2003 was ranked once again as one of the top 10 most admired life and health companies in Fortune's "America's Most Admired Companies" list. With 5,500 employees, over 2,700 financial representatives and 100 agencies nationwide, Guardian and its subsidiaries protect individuals, businesses and their employees with life, disability, health and dental insurance products, and offer 401(k), mutual fund and annuity investment products, and trust services. More information on Guardian can be obtained at www.guardianlife.com.
About Destiny Health
Destiny Health motivates active participation in healthcare and rewards the member behavior change necessary for a healthier lifestyle. For employers, this Comprehensive Consumer-Driven Healthcare model is proven to control rising healthcare costs through lower premium increases. The Destiny Health Plan is a health insurance solution for those who seek greater value, superior choice, outstanding service and comprehensive coverage. This consumer-focused strategy is modeled after Destiny Health's parent company, Discovery, an international life and health insurance company based in South Africa that has successfully enrolled over 1.5 million members in its medical plan since 1992. Combined, Destiny Health and Discovery are the largest providers of consumer-driven healthcare in the world. For more information visit www.destinyhealth.com.
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