HealthTech business models explained: Benefits of B2B2C

Health insurance benefits have been commonly used to attract new employees since the mid-twentieth century. During WWII as the number of eligible, non-military workers in the US dropped dramatically, companies began increasing wages to attract scarce workforce talent. Concerned about the resulting effects on inflation, the Roosevelt administration imposed a nationwide wage freeze. Instead, companies began to leverage employee health insurance benefits—not considered ‘wages’ at the time—to draw in and incentivize employees. Later, this tax-free compensation was enshrined in law resulting in a roughly $250B annual subsidy to the industry each year.

Today, employers lean heavily on healthcare benefits as a means for attracting top talent. From a purely financial and perhaps cynical perspective, the tax deductions on health benefits make improving health insurance offerings an appealing alternative to raising base salaries. There are many arguments against the coupling of employment and health insurance—chief among them that the high cost of individual coverage makes employees reluctant to leave an employer with whom they are unsatisfied or unhappy.

But health benefits, from insurance to add-on digital health tools and services, also help maintain a healthy, balanced, and productive work culture. As healthcare costs have risen dramatically, employers have taken a more active role in crafting health benefits that are both cost-effective and valuable to employees.

The term B2B2C (business-to-business-to-consumer) describes a model where a company sells its solution to another business, which then delivers it to the end users. In healthcare, this usually means a digital health company partners with an employer, health system, or insurer to make its service available to employees or members. The employer or insurer is the paying customer, but the ultimate users are individuals who receive the benefit as part of their health coverage or workplace perks.

This is different from D2C (direct-to-consumer), where companies market directly to individual patients or consumers. While the D2C route is common in fitness apps or wellness subscriptions, in healthcare it comes with two big challenges:

• High acquisition costs. Getting people to sign up one by one often requires expensive advertising and marketing. In the crowded health app market, this can quickly burn through a startup’s budget.
• Trust and adoption barriers. People are often cautious about new digital health tools, especially if they require sharing personal medical data. Many consumers hesitate to pay out of pocket without a strong recommendation from a trusted source.

By contrast, the B2B2C model gives startups access to scale and credibility. When an employer offers a digital health solution as part of a benefits package, thousands of employees can adopt it at once. For developers building these platforms, this means more real-world usage data, faster feedback loops, and the ability to test features at scale.

It’s also different from a traditional B2B model, where the customer is another company but there may not be a direct relationship with end users. For example, a healthtech company selling claims-processing software to insurers is purely B2B. But a B2B2C platform, like a mental health app distributed through an employer, still connects with end users every day — the employer pays, but the employees interact directly with the product.

A quick comparison:

• D2C: Peloton or Calm app selling subscriptions directly to consumers
• B2B: A company selling hospital billing systems that only staff use
• B2B2C: Headspace Care offering mindfulness programs through corporate wellness benefits

In healthcare, the B2B2C approach has gained traction because it combines the scalability of B2B with the direct engagement of D2C.

The appeal of B2B2C is evident when considering the hurdles faced by healthtech startups attempting a D2C approach. High acquisition costs, coupled with the difficulty of convincing consumers to trust a new healthcare product, make growth challenging. Partnering with employers or self-insured plans provides several key advantages.

Startups gain immediate access to scale and adoption is smoother because employees already trust their employer, reducing the barrier of paying out of pocket. Predictable subscription revenue from large employers supports long-term planning, while the willingness of employers to experiment with innovative solutions allows startups to test features and refine offerings rapidly. Finally, working with reputable employers signals credibility to both end users and investors, helping startups secure additional partnerships and funding.

Amy Domangue, CEO and cofounder of Jessie, a full-service and on-demand clinic that offers employees an integrated network of virtual care services, explains Jessie’s decision to sell directly to employers rather than taking a D2C approach:

Starlings CEO and Society of Physician Entrepreneurs, Director Rania Nasis adds:

Transitioning to a B2B2C model involves more than signing contracts; it requires strategic planning and structured execution. Startups should begin by identifying the right partners—organizations with a sizable workforce, a culture that embraces innovation, and a willingness to invest in employee wellbeing. Self-insured employers are often ideal, as they have control over healthcare spending and can pilot new solutions more readily than commercial payers.

Demonstrating clear value to the employer is critical. As Nasis notes:

Beyond cost savings, startups need to connect their solutions to measurable outcomes such as improved employee health, reduced absenteeism, and increased retention. Pilot programs can help establish trust and demonstrate impact, providing a manageable starting point for both the startup and employer. Meanwhile, focusing on user experience ensures that employees engage with the product, which in turn reinforces the value proposition for the employer. Finally, building technology and processes that support scale is essential, as successful pilots can quickly lead to enterprise-wide adoption.

A successful B2B2C health solution requires robust technology that supports scale, security, and usability. Secure cloud infrastructure that meets HIPAA and GDPR requirements is foundational, with encryption, access controls, and audit logs to protect sensitive health data. Integrations with employer HR platforms and benefits portals are essential for a seamless user experience, often requiring support for SAML or OAuth2 authentication and compatibility with tools like Workday or ADP.

Analytics and reporting capabilities allow employers to track engagement and health outcomes, helping to validate the solution’s effectiveness. Scalable architectures ensure platforms can handle sudden spikes in usage, while interoperability with electronic health records, wearables, and third-party services—using standards like FHIR—ensures the solution can fit into diverse digital ecosystems. Finally, mobile-first, accessible design and intuitive onboarding flows increase adoption and overall engagement.

Mounting evidence points to the benefits of a healthy workforce for productivity and retention. The CDC estimates that productivity losses related to personal and family health cost US employers $225.8 billion annually, or over $1600 per employee per year. Resources that help employees manage their own mental and physical health may therefore improve the company bottom line by reducing absenteeism and overtime pay. Preventative health and condition maintenance resources are particularly crucial as the percentage of the US population managing one or more chronic conditions continues to rise. Digital health offerings have also been shown to improve an employee’s perception of their employer: A Thomsons survey found that over 80% of employees with accessible benefits feel more loyal to their employer and Mercer found that over one-fourth of employees are less likely to leave a job that offers digital health solutions.

As a result, companies are investing in solutions beyond just insurance coverage. A Castlight report found that the average US employer offers 14 discreet digital health solutions—nine from a health plan and 5 from third-party vendors. Another recent Mercer report found that over two-thirds (68%) of US employers plan to invest more in digital health solutions over the next five years with the primary goals of improving workplace safety, improving morale, and decreasing health-related absences or poor performance.

B2B2C asks you to speak to HR leaders and to busy employees at the same time. The employer story is about outcomes and risk: fewer high-cost claims, fewer missed days, better retention. The employee’s story is about usefulness: “Can I do something helpful here in two taps?”

Co-branding helps (“offered by your employer” builds trust), as does consistent tone across emails, portals, and the app. Keep the language plain. Replace clinical copy with everyday phrases—“chat with a nurse,” “book a visit,” “check your progress”—and show value before asking for effort. Track what actually moves people (emails, SMS, push) and double down on the channels that lift engagement.

Customer journey mapping is a useful way to understand how both employers and employees experience a B2B2C health solution. Since adoption depends on two audiences, companies need to visualize each step where decision-making, communication, and engagement happen.

In a B2B2C model, data drives everything. Tracking the right metrics helps both the digital health company and the employer understand if the solution is working and where it can improve.

• Measuring Adoption: The first thing to track is whether employees are actually using the product. Metrics like app downloads, logins, session length, and feature engagement give a clear picture of adoption. Low adoption often points to friction in onboarding or messaging, which can be fixed before scaling.
• Tracking Outcomes: Employers want to see tangible results. Depending on the solution, this could include reduced absenteeism, lower claims costs, improved productivity, or employee satisfaction scores. For health-focused apps, tracking behavior change or condition management (like steps taken, blood sugar readings, or sleep patterns) can show impact over time.
• Feedback Loops: Regular feedback from employees and HR managers is crucial. Surveys, in-app prompts, and support ticket trends can highlight pain points or opportunities to improve features. Collecting both quantitative and qualitative data ensures the solution evolves in a way that meets real needs.
• Dashboards and Reporting: Employers appreciate clear, actionable dashboards. Developers can help by building tools that show trends, highlight areas of success, and make it easy to export reports. Common visualization tools include Looker, Tableau, or embedded custom dashboards.
• Iteration and Continuous Improvement: Measurement isn’t just about proving value — it’s about making the product better. Data from pilots or early deployments informs feature updates, personalization, and scaling strategies. A product that learns from its users is far more likely to succeed when expanding to additional employers.

Examining real-world examples helps show how the B2B2C model works in practice. One company, Maven, illustrates how digital health solutions can support employees while delivering measurable value to employers.

Despite its advantages, B2B2C is not without challenges. Securing the first employer partnership often involves long sales cycles, and adoption by employees can lag without clear onboarding and engagement strategies. Addressing privacy and compliance requires careful planning, while seamless integration with HR systems is critical for adoption. Startups mitigate these issues through pilot programs, clear communication, strong technology infrastructure, and ongoing measurement to prove impact.

Employer-sponsored coverage still reaches a huge slice of the country—about 153 million people—so benefits remain a powerful channel for digital health. Rising premiums in 2023 and 2024 pushed leaders to look for programs that help people stay healthier and avoid expensive care, and that trend is unlikely to fade.

Self-funding continues to be common (again, 63% of covered workers in 2024), which gives healthtech companies a large addressable market for B2B2C programs. Expect more attention on outcomes that tie directly to work—access to mental health support, condition management that reduces flare-ups, and benefits that help people through major life stages.

On the tech side, expect tighter integration with HR stacks, cleaner data flows using FHIR, and more personalization powered by machine learning. None of that replaces good product instincts: clear value on day one, privacy by design, and a feedback loop that actually changes the roadmap.

Overall, the B2B2C model is poised for growth. By combining thoughtful technology, strong messaging, and a deep understanding of both employer and employee needs, digital health companies can continue to expand their impact while building sustainable, scalable businesses.

Capriccio said it well back in 2020: if more investment had gone into workplace health before a crisis, people would have felt more supported “as a whole person instead of just a worker.” That’s still the opportunity in front of us. B2B2C isn’t a silver bullet, but it’s a practical way to reach people at scale, prove what works, and help employers build healthier teams.