The market for health and wellness has traditionally included over-the-counter medicines, gym memberships, and vitamins/minerals/supplements. In 2012, the boundaries of health/wellness are blurring beyond these line items toward preventive medical services and consumer electronics.

This morphing market is discussed by Cambridge Consultants in their report on the disruptions driving The Business of Health & Wellness: Engaging consumers and making money.

Cambridge correctly introduces this analysis by saying that economics, the growing prevalence of chronic diseases, an aging population, and demand consumers are shaping health/wellness, “recharacterizing” the market as one driven by “life events.”

Cambridge sees that health consumers are changing their spending habits in response to medical situations — many willing to spend ‘now’ for early diagnosis and prevention in order to save dollars later downstream when chronic conditions could set in.

The report asserts that “the health & wellness sector will not encompass clinical products, services or treatments, because consumers tend to believe that if they are sick or ill, it is someone else’s responsibility to pay — even though this is at odds with the fact that an individual’s lifestyle choices impact their health risk factors.”

Women with families (“Chief Family Officers”) will be a key segment, Cambridge says, for health/wellness in this emerging era. “She is open to investing in her children’s health and future,” the report opines, and wellbeing for herself, her partner, and her aging parents. Products already in the market that have successfully targeted “CEO Moms” include accelerometer-integrated football helmets for kids, UV protective clothing, and healthy foods.

Several predictions for the health/wellness market were generated through Cambridge’s interviews:

  • The market will be dominated by services, vs. stand-alone products, and well-trusted consumer brands.
  • Products will have a lifecycle of about 18 months.
  • Smartphones and tablets will be critical platforms for (some) products.
  • Personalization will drive adoption, and “technology” should be fairly invisible (not intrusive or cumbersome).
  • Companies will look to provide predictive services through data-mining, based on algorithms — and consumers will demand access to their own data to use in their own customized ways.

Cambridge expects to see a “Virtual Mom” that will provide health/wellness monitoring and actionable messaging to users for making micro-decisions throughout their day (and night, in the case of sleep, which Cambridge believes is a significant market).

Health Populi’s Hot Points:  Cambridge’s report addresses an evolving market that is becoming increasingly important for consumers and payors alike. It is also a difficult one to define, as the firm confesses. THINK-Health’s forecast for this market has a slightly different nuance than Cambridge’s, as we are focused on the increasing role that health care consumers are playing in making clinical and financial decisions for themselves and their families. The variable that moves health/wellness into the clinical space is accountable, bundled and performance-based payment: where providers are incentivized to provide 24×7 care that drives toward optimal outcomes for patients enrolled in their practices. As this new payment regime penetrates providers’ practices, they will engage more closely with patients, who will also be paying more out-of-pocket for health. That engagement will take the form of tools, technologies, information therapy, and products that fall into more “clinical” categories — the kind of which Cambridge says (marked in the blue highlight above) consumers won’t be willing to pay for. We believe patients-consumers will be, at a minimum, co-paying for (some) of these products.

They will opt into these products themselves where the data and stories available for these consumer-facing goods is convincing – thereby participating in evidence-based health/wellness. Many consumers can handle the truth and want to be engaged in health care decision making. This isn’t true for all consumers at this early stage of consumer-directed care (using the phrase in a more general way than simply referring to the CDHP health plan world), but there’s already a cadre of empowered patients managing health and wellness — from Quantified Self gurus to people taking advantage of wellness programs at the workplace.

An important conclusion of Cambridge’s that is absolutely spot-on is that “partnerships will be essential for success.” In Cambridge’s report, these are about skill-sets and revenue share arrangements in the health ecosystem. We’d put consumers at the center of that ecosystem — in terms of user-based design, as well as business models for revenue. This goes beyond branding and marketing — this is also about crowdsourcing ideation, development and business models with invaluable health consumer input.