Over the ten years between 2007 and 2017, U.S. consumer spending for education, food and health care substantially grew, crowding out spending for other categories like transportation and housing.
Furthermore, income disparity between wealthy Americans and people earning lower-incomes dramatically widened: between 2007-2017, income for high-income earners grew 1,305 percent more than lower-incomes.
These two statistics set the kitchen table for spending in and beyond 2019, particularly for younger people living in America, considered in Deloitte’s report, The consumer is changing, but perhaps not how you think. The authors are part of Deloitte Consulting’s Retail team.
The retail spending data provides important context for considering how people in the U.S. will allocate health care spending into their personal health household economies.
Deloitte refers to “the great retail bifurcation” and growing gap between have’s and have-not’s in America. The Deloitte team smartly calls out the rise of obesity with lower growth rates among higher-income consumers versus low-and-middle-income people. “Inevitably, obesity impacts where consumers spend their money,” the report observes. People with BMI levels under the obesity definition spend 42% more on direct health care costs than people at a healthy weight.
Health Populi’s Hot Points: In my book, HealthConsuming: From Health Consumer to Health Citizen, I detail the growing retail health ecosystem that’s largely consumer -demanded and -driven. People are looking to engage in health across the many industries they regularly touch in the normal course of daily living, from financial services and food to brewing/spirits and automotive.
The “makers” of stuff — whether refrigerators, cars, beer, or clothing — will be challenged by cash-constrained consumers to deliver new kinds of value as defined by the consumer herself. No longer will a “vanilla” fridge or fast fashion attract a consumer to part with a dollar. The goods will have to deliver more “good” to the buyer, including health and wellness benefits. Industries have already begun to feel the effects of the sharing economy whether cars (via Lyft and Uber), housing and hospitality (via Airbnb), and of course, bricks-and-mortar retailers.
Health/care is not immune to these trends and the landscape is already reshaping based on both consumer spending on the ground for the patient-as-payor, as well as cost-constraints from Big Payors (insurance, employers) impacting providers’ top-lines.
Health can be baked into “things” such as,
- Internet-of-healthy-things connectivity delivering advice informed by our personal data
- Social networking opportunities to share learnings with people-like-me dealing with chronic health issues
- Streamlining life-flows that can lower stress and improve quality of life, save us time, and spark joy
- Nudge and sustain us toward healthier behaviors that improve our own health and inspire others in our social networks to do better, and so on.
This future state will require makers and health/care stakeholders to collaborate and go beyond pure retail or pure “healthcare.” Consider how Best Buy is re-imagining what consumer electronics @retail could be for healthy living. The company acquired Great Call last year, and most recently the signal company, Critical Signal Technologies. In my early write-up on the Great Call buy, I referred to the Best Buy Health vision as part of the growing blur of [email protected] This is the basis for my bullish forecast for self-care at home and where people live, work, play, pray, learn, and shop.
Cash-constraints vis-à-vis health care spending will also impact peoples’ political views on healthcare reform in the U.S. Watch for calls among younger voters to support, broadly writ, universal health care access. This issue, coupled with the fastest-growing line item in the consumer budget — education (and especially the growing student loan debt burden) will motivate younger voters to the polls in 2020.