Destiny Health Sets New Strategic Course

Business Wire, Feb 26, 2008

Expands Focus on Vitality, an International Wellness Program Proven to Significantly Reduce Healthcare Costs

CHICAGO -- Destiny Health, a pioneer of consumer-directed health plans and a recognized leader in product innovation, today announced it is shifting its business model to focus on enhancing and delivering its popular Vitality program. Vitality is a holistic reward-based wellness program that has been proven to reduce healthcare costs across more than a decade's worth of international experience.

Recognized as an industry-leading concept, the Vitality program offers members vacation, merchandise and other rewards for taking part in healthy activities and improving their health status as measured by lowered blood pressure, cholesterol and blood glucose levels, and other factors. For their part, employers earn a positive return-on-investment that is well beyond industry norms.

The move capitalizes on Destiny Health's core assets and the growing interest expressed by large employers to adopt a wellness culture. A survey released in April 2007 by Hewitt Associates of approximately 450 major U.S. employers covering more than 8 million employees revealed that almost half (48 percent) of the companies surveyed offered or planned to offer incentives to employees who participate in wellness or other health-related initiatives, compared with just 38 percent in 2006.

Arthur C. Carlos, President and CEO of the Chicago-based company, said "The new model plays to our acknowledged strengths. It makes it possible for our wellness program to be available to all companies, regardless of geographic boundaries that are inherent in administering insurance plans. Vitality will be sold in partnership with brokers, consultants and health payers as well as direct to employers."

Destiny Health has been careful to ensure no stakeholders are negatively impacted by its new strategic direction.

As part of the move, Destiny Health is finalizing an agreement to sell most of its group health insurance business to a major U.S.-based insurance company. Details on this transaction will be announced shortly. The decision to transfer Destiny Health's insurance business was made following an extensive strategic review of this segment of the business.

Destiny Health followed a rigorous selection process to identify a partner to whom the business could be transitioned without causing negative impact on clients and who has the critical mass to operate the business.

"Along with our parent company, South Africa-based Discovery Holdings, we've been in the wellness plan business for more than a decade, giving us a leg-up in both experience and plan design," Carlos said. "Members who are engaged in Vitality have been proven to significantly reduce their healthcare costs."

"We are extremely excited by the early success we have achieved. The company has already signed up approximately 50,000 members from client companies that include Alcon, AOL, General Growth Properties and Lenovo," Carlos said.

About Destiny Health

Destiny Health's wellness-based strategy is modeled after the strategy of its parent company, Discovery Holdings Ltd., an international life and health insurance company that has successfully enrolled over two million members in its health plan since 1992.

Destiny Health has forged partnerships with some of the most respected and recognized names in the health and wellness field to help extend the reach of Vitality. Members of Vitality enjoy robust perks through partnerships with Polar, Life Time Fitness, Curves and other regional and local fitness facilities.