Speaker 1:
Welcome to Insight Exchange, presented by LEK Consulting, a global strategy consultancy that helps business leaders seize competitive advantage and amplify growth. Insight Exchange is our forum dedicated to the free, open, and unbiased exchange of the insights and ideas that are driving business into the future. We exchange insights with the brightest minds of the day, the most daring innovators and the doers who are right now rebuilding the world around us.
In this episode of Insight Exchange, we'll discuss the following. One, why we need personalized wellbeing and the state of the current landscape. Two, barriers limiting progress and strategies to unlock growth. Three, learnings from other industries. And four, what are the key areas for organizations to focus on to meaningfully grow in this market? I'm Alex Evans, a partner based in Los Angeles and head of LEKs North American Health and Wellness Practice. We've been recently working with the World Economic Forum and its key stakeholders on a call to action to unlock the potential of personalized wellbeing. Today we'd like to discuss our perspectives on the space. I'm joined by three of my colleagues from across the globe. Everyone, please take a moment to introduce yourselves.
Stephen Roper:
Hi everyone. Steve Roper, a partner in our London office. I'm a scientist by training, I work with life sciences companies. I help them improve healthcare outcomes for patients via therapeutics and diagnostics and other innovative approaches such as ongoing coaching.
Mark Boyd-Boland:
Hi, I'm Mark Boyd-Boland, a partner also in our London office, and a member of our global consumer practice. I co-lead our work in Europe on health and wellness, with a particular focus on BMS.
Anna Ondik:
Hi everyone, I'm Anna Ondik. I'm a senior manager based in our Chicago office. I also work in the consumer sector, with a focus on health and wellness.
Alex Evans:
Thank you. Let's dive right in. Steve, given your expertise in the healthcare industry, can you share your thoughts on why we need personalized wellbeing solutions?
Stephen Roper:
Absolutely. Thanks Alex. Maybe to start with, some numbers to put things into context. Chronic diseases are estimated to account for 74% of deaths globally every year, and the World Economic Forum estimates that the total burden of this disease on society would equate to $47 trillion over the 20-year period between 2010 and 2030. In addition to that economic burden, there's also the immeasurable burden on individuals when you think about that level of disease burden across the population. Now, within that, we estimate that 10% of drivers of those diseases is down to genetics and 90% down to other factors. And if you take those in turn, when we think about the 10% of genetic drivers, we actually understand those very well, from very many diseases, we're able to diagnose patients specifically based on their genetic traits, and in many cases, and in an increasingly growing area of personalized medicine, we're able to treat people very specifically based on those traits and be able to identify exactly which treatment will best suit an individual patient.
So that's the 10% down as genetics. When we think about the 90% of disease drivers down to other factors, this is much less well understood, and there's an enormous potential here to understand those and really to think through are there elements of that which we can change in our day-to-day behavior, which could change our propensity to develop those chronic diseases in the long term. We really can learn from the fact of precision medicine teaching us that it's not one size fits all and that we can tailor treatments to individual patients, but I think there's a huge potential to do that on the factors outside of genetic criteria.
Alex Evans:
Steve, that certainly paints the picture for the societal benefits of personalized wellbeing. Thank you. Anna, can you speak to why this is a compelling opportunity for organization?
Anna Ondik:
Absolutely. Well, I think the scale of this opportunity is really quite vast. Personalized wellbeing solutions can tap into a really large addressable market, so think about how the solutions could play in nutrition, weight loss, fitness, VMS, beauty and personal care. If we think about those categories in totality, that's over $2 trillion in global market size. So even a small slice of that pie is a large size of the prize for organizations. Beyond really thinking about the size and dollar terms, we've really seen an acceleration in consumer awareness and interest in personalized wellbeing. COVID-19 really brought a renewed focus on self-care. LEK did a study in 2021, and that really indicated that personalized nutrition services had moderate awareness, so about 39% of respondents saying they had heard of this concept before the pandemic, and the pandemic really accelerated that. So that number was up 14 percentage points to 53% of consumers post COVID. So not only is this a really large dollar size in opportunity, but it's also a really compelling time for organizations to act, given that rising consumer awareness and interest.
Alex Evans:
Thank you, Anna. Mark, given this large opportunity that Anna outlined, what can you tell us about the current solutions out there in the marketplace?
Mark Boyd-Boland:
Yeah. Well, as Anna noted, we're seeing a lot of momentum across a wide range of sub-sectors or use cases, and there are examples in nutrition, in food and beverage more broadly, specifically in weight loss and fitness more broadly, in vitamins and supplements and also across a wide range of beauty and personal care applications. Though so far, a lot of those products and solutions are really based on customer topologies or customer archetypes rather than as yet fully delivering on full personalization.
Oura Health is one example that we've spent all of time thinking about. That's a Finnish health tech organization that developed the Oura Ring, which is a smart ring used to track a variety of health metrics, which can be one's temperature, blood oxygen and heart rate variability. That all links to an app that learns and sets baselines from the data to track and deliver daily scores to the user that helps them understand their activity, their readiness levels, and their sleep quality. That business sold its millionth ring last year and has partnerships with some of the world's leading sports organizations, like the NBA and NASCAR. Along with new solutions and new products like that, we're seeing a lot of investment in the space.
In 2020, Bayer acquired Care/of, which offers personalized supplements via a subscription-based model with an online questionnaire, and similar propositions exist like Nourished in the UK and Persona in the US. So I think what's clear is there's lots of interest in momentum with a wave of new solutions fueling consumer awareness, as well as consumer interest in the opportunity here. And recent investments also demonstrate that organizations believe this is or could be an attractive opportunity in the medium term. Though, I think going back to the beginning, to date, we really aren't seeing a lot of those examples reach scale or broader access.
Alex Evans:
Thank you, Mark. It's interesting to see that there is this proliferation of solutions and we're starting to see investment from some major players. Steve, can you talk more about the barriers limiting these solutions reaching scale, that Mark alluded to?
Stephen Roper:
Sure. There's a few I'd maybe want to touch on there. I think to start with, the costs of diagnosis and getting some of the information that you'd need to start thinking about the right approach to personal wellbeing, the costs are quite high, so we are seeing some movement there, but there is a barrier to overcome. Maybe some examples of things that can reduce costs, there's Ultima Genomics, which is planning to launch a system that can sequence someone's genome for under $100, which would be a major achievement. There's other emerging technologies such as non-invasive, continuous glucose monitors, digital twins, or maybe replacing blood tests with less expensive urine strips. And some of those examples I think can really help there in terms of reducing the cost of getting the data that's needed.
I think when you have that data, there are still some challenges there around both privacy and security of that data. We see some companies struggling to navigate the landscape of handling such sensitive data. Equally, we see that consumer trust is often low as a starting point, clearly one's health data is very personal and sensitive and there can sometimes be a low willingness to share that data. So that's another thing that we see organizations having to overcome. Finally, and a little bit related to that actually, we see it a little bit hard sometimes for consumers to engage with such a solution because it's quite hard for them to see some of the long-term benefits that could be coming their way. And I see that as linked with the data side because actually what is needed here is for the companies providing these solutions, to have nice data sets and be able to prove long-term benefits, but indeed it's hard to get their hands on those data sets without the consumers in turn, seeing those benefits themselves.
So I think there's a bit of a catch 22 situation there where the company's needs individuals data, but the individuals are relatively hesitant to share that data without really seeing the benefits to themselves. So I think that's a major one around data that needs to be overcome.
Alex Evans:
Great, thank you Steve. So given these barriers, how can organizations overcome them, unlock the potential of personalized wellbeing, what role could the public sector play? Mark, any thoughts?
Mark Boyd-Boland:
Sure, and I think Steve touched on a number of the key data issues. We see the opportunity here to overcome some of those data related barriers being through a data consortia. And what we mean there is that organizations can be provided, on a cooperative basis, with managed access to a central repository of data. And the data consortia therefore benefits from an increase in the number of and the diversity of the data points that are available. Organizations then have that larger data set to help optimize some of the artificial intelligence and some of the other insights that are needed to help develop better and more accurate solutions in this space. And there are a variety of governance, membership and access models that we think could be deployed by those consortia. And here, you mentioned public sector, here we see some degree of public-private partnership as likely to be beneficial, if not essential, to really driving and delivering on that progress.
The public sector involvement in particular can help to build confidence and trust from both consumers and stakeholders, building on Steve's point from earlier. These consortia also present an opportunity for governments to better inform broader public health research and tailor public health interventions to the unique requirements of different communities. The UK Biobank is one example in this area and that Biobank there has collected and centralized a lot of NHS genetic and general health information for over half a million UK individuals. And since it's launched about a decade ago, more than 2,000 peer reviewed papers have been published using that dataset as a key resource. And the Biobank is now developing chronic disease models to help inform broader public health policy, as well as to guide treatment using that data in collaboration with participants in the medical profession and the broader health sector, as well as collaboration with key policy makers.
Anna Ondik:
Mark, I think that's really spot on. Data is clearly one of the hurdles today. I think another thing that we haven't touched on quite yet is prices of these solutions. So today, they're relatively high and we think that's limiting broader access across different population types. A key unlock here could be partnering with other entities to subsidize that end cost to consumers. So we've seen a little bit of this with some organizations today. So Noom, which is a mobile app subscription based, they've taken a really psychological approach to weight loss and they've recently partnered with state governments who subsidize the app to their employees. So really seeing the benefit in providing that app to their employees.
Another avenue along the corporate dimension are lifestyle spending accounts, and these are emerging in North America as a way for employers to provide their employees access to health and wellness solutions that wouldn't typically be covered under your group health plans. So this flexible benefit plan presents an opportunity for a really increasing accessibility of personalized solutions. And we've seen some traction here as well, Vous Vitamin, which also provides personalized vitamin supplements, as an example here, and they've been embedded in several of the largest US-based lifestyle spending accounts. So some progress being made in really subsidizing the end cost to consumers and this can really, I think, unlock some more broader access of these solutions.
Alex Evans:
Great, thank you both. So the data and funding are critical unlocks to drive momentum. We've also talked about the current pain points in the consumer experience, and we think it's important to prioritize a feedback loop here to demonstrate efficacy and drive consumer retention, so they can see the benefits of personalized wellbeing. Steve, are there any other parallels from other industries organizations can in consider and look to for this market?
Stephen Roper:
Yeah, I think that's a really good question. We've looked at some examples in some other industries and maybe one in the interest of time that I'd pause on, actually comes from the smart homes industry. Now, initially, uptake of these solutions for smart homes was actually very slow, and part of the problem there was that each of the players was developing their own solutions, which were not necessarily very compatible with each other. So consumers were not particularly interested in committing to one of those platforms. What was set up was a joint committee really called, Matter, which had a large number of organizations, over 550 tech companies and other providers that were operating in the market, that came together to create a universal platform that was interoperable between different people's devices from those companies and the smart home ecosystem. And that really helped drive uptake because then consumers could pick and choose and be more versatile in terms of what they installed in their home.
I think that's a very good example of different stakeholders coming together from their mutual benefit of developing something that allowed all of those different entities to work together. The parallel we'd have here in the personalized wellbeing space, it is thinking through some of those data sharing, for example. At the moment, many organizations are going it alone in terms of solutions for data collection or storage, and actually some coordinated approach there could be very beneficial to drive standards and allow many of these companies to then benefit from a universal way of approaching the space.
Mark Boyd-Boland:
Well, I think Steve, there are also some learnings from the European Digital Media Observatory or the EDMO, just thinking back to the comments I made a moment ago about data consortia. So the EDNO is a project that supports the interdependent community working to combat disinformation, but I think there are some interesting parallels and points of read across that we can make to the world of personalized wellbeing. And the first of those is the ability of EDMO to bring together a wide range of stakeholders, often with competing interests, to form that consortia and also from a government's perspective, its ability to put together an independent advisory board and a code of conduct, that's really helped to align the interests of that diverse set of stakeholders and manage sort of responsible use and coordination of activity. And I think that's important in the context of personalized wellbeing because what's needed is a structure for a data consortia that would be structured around a fundamental set of guiding principles so that everyone's aligned and reflects again on the importance of building consumer and stakeholder trust in the handling and processing and sharing of that data.
Alex Evans:
Great. Thank you all for sharing these insights. Anna, any final thoughts on what's ahead and what you would tell organizations looking to invest in and pursue the opportunity in personalized wellbeing?
Anna Ondik:
Absolutely, Alex. So we can see a really critical need for these personalized wellbeing solutions. There's clearly a mounting health crisis and a lot of opportunity for organizations. Near term, we think organizations should really first focus on more targeted use cases, with potentially large addressable populations. Having a targeted core consumer can help organizations more cost effectively target and acquire new customers. These consumers are also likely to be much more engaged and have higher lifetime value. Think about women trying to conceive or who are already pregnant as one example. These consumers are really looking at how can they have a healthy outcome in terms of their birth and a healthy development of their child. That's a really captive and engaging consumer who's likely to really be engaged with a potential solution. Another element that I think will be important in retention is something you hit on earlier, Alex, a feedback loop, behavioral change and lifestyle change is hard and demonstrating success and improvement will be a critical lever to consumer retention.
I think Thorn is a good example here. So they have a portfolio of personalized offerings. They're using both testing and qualitative questionnaires to improve. They're using both qualitative and testing. Thorn is a good example here, they're using both testing and qualitative questionnaires to inform personalized improvement plans. What's interesting though is they're really actively marketing the ability to watch your health evolve over time. They're doing follow-up testing that validates the effectiveness of your wellness plan and helps you optimize and think about your health over your lifetime. That's really powerful. If you can demonstrate to consumers that what they're doing is having a measurable impact, they're a lot more likely to stick with it and drive long-term consumer value. So Alex, I think here, really a critical thing for organizations to be thinking about is what are those targeted use cases that they want to focus on, and how can they really be thoughtful about their feedback loop and demonstrating efficacy to consumers?
Alex Evans:
Well, we've certainly covered a lot of ground today. The potential to meaningfully improve customer wellbeing is critical. The challenges are real but not insurmountable. We've discussed some strategies to break down these barriers and drive momentum. Personalized wellbeing will be an exciting industry to continue to follow. To close this conversation, I'd like to thank my colleagues for joining me and further discussion regarding personalized wellbeing. We're happy to provide more detailed discussions on Quest and we invite you to contact us to learn more. Thank you.
Speaker 1:
Thank you, our listeners, for joining us today at the Insight Exchange, presented by LEK Consulting. Links to resources mentioned in this podcast can be found in the show notes. Please subscribe or follow for future episodes wherever you listen to your podcasts. Also, we encourage you to submit your suggestions for future insights online at lek.com.
