Fitbit shares soared Tuesday after the company disclosed expanded partnerships with UnitedHealthcare and Qualcomm.
Fitbit’s stock ended the trading session up 8.5 percent at $7.94 a share.
UnitedHealthcare and Qualcomm said Tuesday they will expand UnitedHealthcare Motion, a corporate wellness program that dangles financial incentives of up to $1,500 a year in front of employees.
The expanded program provides employees with more access to use wearable fitness trackers, such as Fitbit’s Charge 2 device, and to grab financial reward in the process.
“This integration is a first of its kind for Fitbit and brings together market leaders in healthcare and technology to drive better health outcomes and cost savings for both consumers and employers,” said James Park, Fitbit’s co-founder and chief executive officer.
San Francisco-based Fitbit will benefit in particular because its Charge 2 tracker will be integrated in a custom-tailored fashion into the UnitedHealthcare Motion program.
A 2013 study cited by UnitedHealthcare showed that people who walk less than 2,000 steps per day may have annual medical costs of more than $10,000.
“Studies estimate that if a company can increase its active employee percentage from one-third to two-thirds, the total healthcare costs could be reduced significantly,” said Richard Migliori, chief medical officer of UnitedHealth Group.
In contrast, those who walk 8,000 or more steps per day may decrease those costs to as low as $3,000, according to the study.
Investors also may like the prospect that UnitedHealthcare and Qualcomm are giving a boost to the wearables market just at the time when that sector has encountered some skepticism regarding its outlook.
The custom features in the Charge 2 device are expected to be enabled early in 2017 for anyone in the UnitedHealthcare program.
“Wearable technology can help encourage employees to walk each day and earn financial rewards at the same time,” Migliori said.
Photo: FitBit wearable devices. (Courtesy Fitbit)