It is not often that there is a convergence between healthcare and financial services, but one appears to be already happening. It is based on an odd coincidence relative to the size and growth of two separate but closely related markets: 1) the market for “wellness” or “healthy living” services; and 2) the market for healthcare investment/spending accounts.

The size of the wellness/healthy living market has been estimated at $1 trillion by two different authors. One estimated that this level would be reached by 2020. [T. Haws “The New ‘Healthy Living’ Marketplace” www.hospitalconnect.com/hhnmag Jan 25, 2005] The other believes it will reach that size by 2010. [P. Pilzer “The Wellness Revolution: How to Make a Fortune in the Next TRILLION DOLLAR Industry”, New York, NY, John Wiley & Sons, 2002]

Precisely the same market size has been estimated for the health spending accounts (HSAs) that are part of consumer-directed health plans (CDHPs). [G. Ahlquist, et al. “The Next Trillion-Dollar Opportunity” Booz Allen & Hamilton eInsights June 2001] This market size is also predicted to be reached by 2010, based on an expected creation of 50 to 100 million new retail accounts reflecting the shift to defined contribution benefit plans and personal ownership of health spending accounts.

The financial services industry is already gearing up for its role in these converging markets. This convergence is based on the fact that the best way for consumers to protect and grow their trillion dollars of pre-tax HSAs that can only be spent on healthcare is to protect and improve their own health. The insurance segment of this market is already offering health insurance plans that are geared to healthy and health-focused consumers, those willing to commit to managing their own health and interested in coverage that depends on their acting accordingly.

This convergence is also supported by those employers that recognize the full value of employee health – not merely in reducing sickness care costs, but in reducing absenteeism and presenteeism, improving employee productivity and performance. These employers are contributing to employees’ motivation and ability to manage their health, and thereby their HSAs. And the insurance plans that employers choose are increasingly joining in promoting employee wellness in order to attract and retain employer clients.

Financial services firms will be enjoying the opportunity to hold and manage the trillion dollars that consumers put into these accounts. They will compete for consumers’ accounts by offering both traditional interest on the savings, and transaction management when they are spent for eligible healthcare services. Healthcare providers will find themselves being paid through such accounts, and the credit or debit cards associated therewith.

Those firms that hold and manage these accounts may even be willing to partner with healthcare providers that are already in or move into the proactive health management (PHM) market. Since PHM services are designed to reduce the incidence and prevalence of disease and injury causes for depletion of HSAs, it is in these firms’ as well as in consumers’ best interests that PHM services be widely adopted. We can imagine the possibility that the firms holding HSAs will even be willing to pay higher interest or offer other advantages to consumers who adhere to healthier lifestyles.

Those who predicted the $1 trillion size for HSAs predicted that the leadership for the convergence between financial and healthcare industries will come from banking and investment firms, not healthcare insurers or providers. But there is no reason for insurers and providers to wait for such leadership. A partnership approach, particularly in local healthcare markets, may prove to be the best way to promote the mutual benefit of health and financial service firms, as well as the benefit to employers, consumers, governments and society as a whole that healthier people would deliver.