- Date 15 Dec 2011
The report, entitled The Business of Health & Wellness: Engaging Consumers and Making Money, was developed from a workshop hosted in Cambridge, MA, and attended by delegates from industry leaders including Adidas, Colgate Palmolive, Sony, Unilever, Qualcomm Incorporated and Pepsico. Delegates believed that the most disruption in this space will come from medical technology being moved into the consumer space, which will provide challenges to consumer and health care companies alike that may find themselves threatened if they fail to adapt to this new model.
“Disruption in this market will come from medical firms moving from 10-year product lifecycles and confronting the 18-month lifecycles of the consumer world, and from consumer companies adapting to the rigorous processes demanded by medical regulations,” said Duncan Smith, Head of Product Development at Cambridge Consultants. “The market is not yet mature enough to see examples of successful business models over the long-term, but there are incredible opportunities for companies able to capitalize on the vast amount of health information already available, consolidating it into personalized recommendations just as Google has come to drive what we see and even purchase online.”
The report explores two key points of view around successful revenue models: one, that profit will be driven by reimbursement for solutions demonstrating a reduction in healthcare costs; two, that success will lie in directly targeting consumers and engaging them in improving their own health and well-being. Both views come together around the prediction that healthcare will become increasingly personalized, moving away from treatment to lifestyle management.
Healthcare spending is predominantly driven by life events (such as birth, starting a family, retirement, and illness). At these points, consumers’ motivations and discretionary spending habits change, and healthcare payers are highly motivated to reduce cost at these peak times. Products and services with proven benefits will appeal to both consumers—particularly if the benefits are apparent in the short-term—and healthcare payers, who will see these confirmed solutions as worthwhile investments.
“Across consumer groups, turning data into meaningful information will be the real key to winning in this new space”, continued Smith. “Engagement on many levels, from individual apps to social networks, will set the scene for the next dominant name in the industry to trawl health data and use it to help people live healthier lives. This will be encapsulated in ‘virtual Mom’ services which will predict outcomes and advise users on positive actions.”
Consumer education is also cited in the report as a critical driver in this new market, and real moms are the likely keys to companies’ success. Women with families and discretionary budgets are open to investing in their families’ health and wellbeing, making them enticing targets for many potential products as well as market advocates with a strong network effect.