Nine years ago, I teamed with a Big Pharma on a scenario planning exercise about consumers and health care. One of our scenarios told the future-story of the consolidation/integration of information technology, pharma/life sciences, and health services to benefit consumer health. We now meet up with this future-story, and it’s J&J’s to tell.
I’ve written here in Health Populi about Walmart’s move toward pharmacy benefits management and assisting employers with managing prescription drug costs. In that instance, the retailer is vertically integrating leveraging the company’s expertise in dealing with supply chain efficiency and a huge labor force.
J&J’s strategic acquisition of HealthMedia is vertical integration with a different building block in the employer health management space. The wellness/health coaching business is aimed squarely at employers who are targeting improving population health, and stemming escalating health costs, at the workplace.
Health Populi’s Hot Points: J&J has a record of success in health employees manage health (having won National Business Group on Health’s platinum award for best employer for healthy lifestyles) and a great place to work. They have street cred in the area of wellness and positive, constructive employee relations. By acquiring HealthMedia, J&J moves further into prevention and chronic disease management for other employers, and gets more experience in using health information technology.
Beyond this example, I anticipate more moves like J&J’s and Walmart’s where suppliers and retailers migrate further into health service provision. This has already begun in the segment of retail clinics, and worksite clinics are a growing phenomenon, as well.
Note, too, that both J&J and Walmart have targeted employers. This reinforces the reality that employment is the site of health plan coverage for a majority of Americans under 65 years of age. Is this a déjà vu of employers beneficently taking care of employees? That’s probably a positive externality. Instead, smart employers want to engage employees in their health to manage the cost trend and worker productivity. The vertical integration of a J&J into health services could represent a win-win-win for the company, employers it’s targeting as customers, and ultimately, employees.