Digital health and personalized wellness is about to reach escape velocity and transform the way millions of people achieve their health and fitness goals. Self-tracking, quantified self, and personalized notifications (customer engagement) are the new frontier. What was considered visionary a few years is now feasible and possible?
Consumer Health and Wellness management is a huge market opportunity in the U.S:
- $2.6T – $2.8T annual spend on healthcare in USA, 18% of GDP in 2010, up from 5% in 1960, and 2x OECD average
- 100MM Americans (30%) of Americans considered obese in 2012, up from 15% in 1990
- $147Bln estimated medical costs associated with obesity in 2008, up from $79Bln in 1998
- Diseases like diabetes currently affects more than 8 percent of the U.S. population, at a cost of $245 billion annually, and is projected to rise sharply over the coming decades due to obesity and an aging population
In 2014, due to the Affordable Care Act and readmission penalties, we saw healthcare in the US market transform to a value-based reimbursement model impacting payers, providers, pharmacies, technology vendors and more. The next phase of evolution of healthcare delivery is around getting customers more interested in managing their own health by changing lifestyles and healthier living.
(Source: American Heart Association, Center for Medicare & Medicaid Services, 2012, OECD)
Trends Driving Connected Health and Consumerization
Preventative healthcare is really about getting the participant to be active in his or her own healthcare management and change behavior. The change around consumer driven healthcare spend are staggering:
- IDC expects the market for wearable devices will reach 114.0 million units shipped in 2018, representing a $33.7 billion worldwide revenue opportunity. Compare this to 2014, shipments of wearable devices more than tripled compared to the prior year, reaching a total of 21.0 million units shipped
- Consumers spent over $200 billion in 2014 on health and fitness services (industry sources – Fitbit S1)
Virtual wellness coaches, loyalty incentives, social gamification, and personalized goals are all elements of this growing digital ecosystem. Technology is a key enabler of this ecosystem with advances in wearable (e.g., Apple Watch) and sensor computing (e.g., clip-on activity trackers).
The new platforms for digital life or data driven life — that collect, aggregate, and disseminate — will cover a wide range of consumer User Experience (UX) use cases and end-points including medical devices, sensor-enabled wristwear, headset/glasses, and tech-sensitive clothing. All of these are going to collect a lot of data, low latency analytics, and enable data visualization. Several firms are entering the competitive activity tracker market: Apple (Watch, HealthKit), Google (Android Wear), Microsoft Band, LG (Life Band Touch), Sony (the Core), Garmin (Vivofit), Misfit, Glassup, Pebble, JayBird Reign etc.
Several trends are driving the growth of the digital health and fitness market:
- Mobile devices have become the preferred platform for consumers. Mobile devices have become the preferred platform for people to access information and manage their busy lives. According to Gartner, by 2018 more than 50% of users will go to a tablet or smartphone first for all online activities.
- Individuals and employers are increasingly focused on disease prevention and obesity. A variety of factors, such as changing consumer lifestyles and demographics, combined with rising healthcare costs and employers’ increased emphasis on productivity, are leading employees and employers to focus on health and fitness. Consumers spent over $200 billion in 2014 on health and fitness services, such as gym and health club memberships, and consumer health products, such as weight management products and dietary supplements. In addition, IBISWorld estimates that the corporate wellness industry will grow from $7.4 billion in 2014 to $10.4 billion in 2018 in the United States.
- Advances in digital technology have enabled the emergence of connected devices. Recent technological advances in sensors, lower power components, and longer-life batteries, combined with the introduction of wireless standards, such as Bluetooth low energy, have enabled the emergence of connected devices that are smaller, more power-efficient, and track a broader range of biometric data. New wrist-based and “clippable” devices automatically track users’ daily steps, calories burned, distance traveled, floors climbed, and active minutes and display real-time feedback to encourage them to become more active in their daily lives.
- Focus on Heart Surveillance. The health marketplace is riding a new wave of patient surveillance, which includes proactively “managing” conditions. This is prompting new solutions for remote monitoring from the phone to improve diagnosis, treatment, and care. The heart is a primary generator of rhythm in the body, influencing brain processes that control the nervous system, cognitive function and emotion.
- More individuals are turning to social solutions to motivate and inspire. Individuals are increasingly using mobile and social apps and other software in unprecedented ways. Social apps allows our users to see trends and achievements, access motivational tools such as virtual badges and real-time progress notifications, and connect, support, and compete with friends and family.
Figure below illustrates connected health activity streams and customer engagement lifecycle.
Wearable Computing and Evolution
Wearable computing is loosely defined as technology that is worn, whether it is glasses, watches, clothing, or wristbands. Wearable are evolving with advanced sensors to focus on chronic diseases and medical grade data to help manage more than just fitness.
Wearable computing is a huge disruptor. It provides an opportunity for startups or new divisions as execs who know existing products and processes might not see the opportunity that new data analytics, consumption patterns, and usage options wearable creates. See two charts from Credit Suisse below.
Jawbone UP, Fitbit Flex, and the Garmin Forerunner are the simple activity tracker applications aimed at vital signs, stress relief, fitness and heart monitoring. They represent a new category of wristbands, clips, and weight scales (e.g., Aria Wi-Fi scale) that track the wearer’s steps, workouts, and sleep each day. They work alongside accompanying mobile or desktop software that records all of the data and offers additional functions such as approximate calorie burn info and food tracking.
How do they work? Many devices use accelerometers, measure wearers’ movements, and in many cases measure the length and quality of their sleep. That data is transmitted to a website or smartphone app, where the user can view and share the stats. These devices help you understand how you sleep, move, eat (and also variables like weight via Wi-Fi scales, skin temperature, heartbeats) so you can make smarter choices. The bands sync to mobile apps which displays movement and sleep details.
What is the market size? The market for digital fitness devices hit $330 million in 2013, according to consumer researchers at NPD Group. FitBit has the largest market share of the three, though a recent recall of the FitBit Force, suspected of triggering rashes for some users, has slowed its momentum.
Take for instance FitBit band. This is sturdy, light and water resistant, so you don’t have to remove it when you shower.
The device has two moving parts: a button that switches it from day mode to sleep mode or starts a timer to track workouts, and a cap that comes off to reveal a standard 1/8-inch audio jack used to sync the band with iOS or Android apps.
Attributes of Wearable Computing Solution
Mary Meeker and Liang Wu captured the core attributes of a Wearable Computing product at the D11 Conference.
<h2″>Personalized Big Data is the foundation for a Data Driven Life
New Ways to Leverage Consumer Health Metrics — Enabling a Data Driven Life — Ubiquitous Self Tracking — The next “new” frontier is wearable computing. This will cover medical devices, sensor-enable wristwear, headset/glasses, and tech-sensitive clothing.
What does all this mean for payers, providers, and technology companies? Who will deliver the best value in this shifting landscape? All of them are going to collect a lot of data and present a lot of data in real-time — helping people lead healthier, more active lives by empowering them with data and guidance to reach personal goals.
Keep an eye on the connected health space, as it’s a great example of Digital Transformation and Digital Customer Engagement.
<h2″>Additional Reading and Notes
- Apple HealthKit
- See also The Notification Economy and More Than a Timepiece – the Apple Watch – LiquidHub Whitepaper that explains the internals of the Apple Watch written by Rajul Rana, LiquidHub CTO
- Fitbit Business Model
- Sceenshots of Sleep and Food Tracking