By now, despite good intentions, most of our New Year’s resolutions to lose weight, exercise more and live healthier have been broken. By the end of the year, only 4% will be successful in achieving a resolution for improved personal health. That’s reality.
For most of us, life happens—work, kids, illness, injury, finances and “stuff” dispels our best intentions. But for whatever the reason, the fact is that our collective unhealthiness is taking a toll in our society. According to the CDC’s National Center for Chronic Disease Prevention and Health Promotion (NCCDPHP): 6 in 10 Americans lives with chronic disease with soaring costs for each accounting for 75% of total healthcare spending in the U.S. Poor health habits aka healthiness is the root cause for most of these costs.
The CDC defines preventive health as “services that include check-ups, patient counseling, and screenings to prevent illness, disease and other health-related problems.” But healthiness is different: it’s how people live their lives. It’s individual habits, daily practices and choices people make with their time and money. Some call it wellness and that’s OK. At the heart of healthiness/wellness is a simple notion: it’s self-care or the neglect thereof.
There’s widespread consensus among policymakers, health professionals and in the general public that unhealthy lifestyles constitute a significant and growing problem in the U.S. (See Fact File). There’s general agreement that social determinants of health play a contributing role as advantages in education, income and mobility translate to better health. And there’s recognition that healthiness is about more than New Year’s resolutions to eat right and exercise more.
Healthiness is about physical and behavioral health i.e. anxiety, stress and mood. It’s about relationships, roles and surroundings at home and work that impact an individual’s sense of purpose and predispose some to addictions. It’s about mind and body in every stage of life.
Regretfully, healthiness has not had a seat at the healthcare industry table alongside hospitals, drug and device manufacturers, insurers and physicians. Each of these sectors enjoys strong cash flows, stable revenue growth, operating margins that allow debt obligations to be met and investor risks to be rewarded. They also benefit from a payment system that recognizes their roles as reimbursable costs as opposed to much of what’s spent on healthiness. At this table, a widely shared belief for the $3.6 trillion industry is that the majority of individuals are not inclined or incapable of living healthy lives. There’s suspicion about fads that offer false hope or quick remedies to lifelong health issues. They discount the veracity of marketing claims and invest limited resources to assure that their patients are equipped beyond the specific treatment directives they provide.
At this table, health is more about access to physicians, technologies, and pills than health habits that predispose individuals to their states of health. Accountability is about patients who do what their providers and prescribers direct than a deeper understanding of their lives and circumstances.
Healthiness is an after-thought at this table.
Healthiness is taking a seat at the health industry table today not because it’s been invited. Keeping people healthy and out of hospitals, emergency rooms, doctors’ offices and pharmacies is good business for only a handful in the current system who benefit financially.
But consumers and investors are leveraging their money and influence to force a seat at the table for healthiness.
They’re taking advantage of three trends driving the maturation of the healthiness sector:
The science of healthiness is advancing clinicians and researchers are exploring how diet schemes, exercise regimens, emotional health and other factors impact healthiness. They’re studying how genotypic and social circumstances explain variability and which factors stimulate an individual’s decision to change. They’re publishing peer-reviewed monographs that challenge conventional thinking and research methods, like last month’s JAMA study that found cognitive impairment in middle aged adults was associated with cigarette smoking, eating excess calories, or engaging in less physical activity. And professionals in healthiness like the 3000-member American College of Lifestyle Medicine are advancing the uniqueness and legitimacy of the science of healthiness. Predispositions to fat-shaming, quick fix cures and baseless claims of effectiveness remain problematic, but science is gaining the higher ground.
The U.S. market for healthiness is growing at 6.4%/year—higher than overall health spending of 5.7% per year forecast through 2027 by the Congressional Budget Office. Investors run the gamut from angels, venture capital and private equity to strategic investors like UnitedHealth Group, Apple, Facebook and others who are developing products and services to drive healthiness. Healthiness start-ups like Noom, Talk Space, HIMS, ROMAN, Well+Good and others have attracted significant investments and established players like Weight Watchers, Vitamin Shoppe, GNC, Nutrisystem, Fitbit and others are adjusting their strategies in the face of new competitors like Orange Theory, Iron Tribe and others. Mainstream provider organizations are investing in their accountable care models vis a vis partnerships with companies like Lumeris and others to accelerate their healthiness footprint and insurers are active investors in technology start-ups that prompt their enrollees to better health choices. At the JPMorgan Healthcare Conference this week, pitches by these companies will be on the agenda alongside health insurers, health systems, information technology and other mainstream sectors. Investment in healthiness has come of age for investors.
Encouraging Federal Policies
On key fronts, the federal government is asserting its support for policies that advance healthiness as a foil to runaway costs from chronic diseases. Their expansion of Supplemental Benefits in Medicare Advantage plans, allowance for innovation and inclusion in CMS’ alternative payment models like the Primary Care First and the Medicare Shared Savings Programs are good starts. But more can be done: a holistic approach to diet and nutrition under the oversight of the U.S. Department of Health and Human Services is needed. Oversight of self-care remedies like vitamins, nutraceuticals, functional foods and other products and the credentialing of healthiness providers i.e. healers, life coaches, and counselors merits review. And increased emphasis on healthiness in classrooms and workplaces deserves additional funding and attention. The federal government can do more.
Healthiness is a sector in U.S. healthcare whose time has come. It’s more than physical fitness and nutrition. It’s more than emotional stability and social acceptance. It’s bigger than access to primary care clinicians periodically and avoidance of risk.
And it’s more than New Year’s resolutions, artfully marketed brands and get-well-fast promises.
It’s about the deeply personal, highly complicated and often inaccessible or unaffordable ways individuals elect to live a healthier life or not. It’s a sector in healthcare that must be taken seriously.
P.S. Today marks the first day of the JPMorgan Healthcare Conference in San Francisco—arguably the Woodstock for healthcare investors, lenders and operators seeking access to their funds. It’s a zoo unlike anything in healthcare for those of us who will camp out at the Westin St. Francis for the next four days. Stay tuned.
New Year’s Resolutions:
38% of Americans planned to have New Year’s Resolutions for 2020; 20% planned to have multiple resolutions. Top choices: 51% want to improve their finances, 51% want to eat healthier, 50% want to be more active, 42% want to lose weight, 38% want to improve their mental well-being. But, last year, only said 4% they kept their resolutions Ipsos Survey December 2019, Statistica Survey 2018.
Health Status of the U.S. Population:
As of 2018, 47.6 million Americans have a mental illness. Suicide is second leading cause of death in age group 10-34. A third of the adult population is obese and is forecast to reach 50% by 2030 at a projected cost of $344 billion.
Only 1 in 3 children are physically active daily and only 5% of adults of get 30 min of exercise daily and only 1 in 3 weekly & only 6 states require daily PE. 90% consume almost 50% more sodium daily than recommended (3400 mg/day vs. 2300 mg/day). Children spend 7.5 hrs./day in front of screen.
Annual Cost in U.S. 2018 ($billion):
Diabetes-$237B, Behavioral Health-$190B, Heart Disease & Stroke-$199B, Obesity: $147B CDC National Center for Chronic Disease Prevention
Risk factors for Chronic diseases:
Lack of physical activity: $119B/yr., excessive alcohol use: $249B/year as of 2010 in healthcare related costs to US health system.
Correlation of Physical and Mental Health:
Physical and behavioral health are intertwined: 68% of people with mental disorders also have a medical condition. Between 15 – 30% of patients with diabetes also have mental health issue. 1/3 who experience a heart attack later report depression. 43% with depression are obese. Robert Wood Johnson Foundation
Notable investments in the preventive/wellness economy:
Noom (Sequoia Capital; completed a $58M financing round 5/6/19)
Talk Space (Multiple PE Groups/Turnover: Have raised ~$100M since 2014. Closed Series D on 5/30/19)
HIMS (Multiple funds including Josh Kushner’s Thrive Capital. As of 2018, approximately $100M raised already 5+ funding rounds in)
ROMAN (series A raised $88M from multiple funds including those backed by Reddit cofounder Alex Ohanian and (Elon) Tusk Ventures).
December jobs report: healthcare key
The U.S. Labor Department’s December jobs report released Friday showed overall non-farm employment growth of 145,000 jobs for the month ending 2019 with a net gain of 2.1 million vs. 2.7 million in 2018. Unemployment stayed at 3.5% for the year, down from 3.9% in 2018. Per BLS: “Employment in health care increased by 28,000 in December. Ambulatory health care services and hospitals added jobs over the month (+23,000 and +9,000, respectively). Health care added 399,000 jobs in 2019, compared with an increase of 350,000 in 2018.”
Retail drug chains file suit against physicians for opioid over-prescribing
Last Monday, CVS, Walgreens and Walmart filed charges against physicians and other prescribers aka “John and Jane Does 1-500” in Northeast Ohio, seeking financial reparation for their part in the opioid epidemic. The retailers are seeking financial reparations from prescribers in the event drugstores are found liable since drugstores were following the directions of the physicians.
Duke study: MA plans using in-home palliative care more but integration slow
This year, 61 Medicare Advantage plans are offering a palliative care benefit compared to 15 last year according to a Duke University Margolis Center for Health Policy report published last month. “Improving Serious Illness Care in Medicare Advantage: New Regulatory Flexibility for Supplemental Benefit” concludes that “Medicare Advantage plans have new flexibilities to offer supplemental benefits that support members’ broader health needs. In the first two years, only a small number of plans are offering new benefits, in large part due to the time it takes to design and implement a new supplemental benefit. The launch of new supplemental benefits has been slowed by operational challenges, such as establishing contracts with community-based organizations that can offer meals, transportation, and other services; ensuring services are available in sparsely-populated rural areas; and understanding where to target new benefits given that plans do not have new funding to implement these benefits”
FDA modernization includes data strategy, use of real-world evidence in submissions
Thursday, the Food and Drug Administration will conduct a public meeting on March 27th to get input on its efforts to modernize its approaches to data quality, stewardship, exchange and analytics. It is also encouraging drug and device makers to incorporate “real world evidence” (patient generated data) into their submissions for new product approvals.
Cancer survival rate improvement
Improvements in the lung cancer survival accounts for the biggest one-year improvement since 1930, according to a report from the American Cancer Society last week. Researchers said the U.S. cancer death rate dropped 2.2% between 2016 and 2017—primarily due to lower cigarette smoking. Improvement was also noted in breast, colon and prostate cancer contributing to an overall improvement of 30% since 1991 per ACS.
“Urban Plates/ IPSOS Poll 2020 New Year’s Resolutions”; December 11, 2019; https://www.ipsos.com/en-us/news-polls/urban-plates-ipsos-NY-Resolutions
“How Many of the New Year’s Resolutions did you Stick to?”; Statista; December 2018; https://www.statista.com/statistics/953562/share-of-americans-who-stuck-to-their-new-year-s-resolutions/
National Health Expenditure Data; CMS; https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/index
Bureau of Economic Analysis; https://www.bea.gov/data/special-topics/health-care
Expenditures for Commonly Treated Conditions among Adults Age18 and Older in the U.S. Civilian Noninstitutionalized Population,2013; Agency for Healthcare Quality and Research- Medical Expenditure Panel Survey; https://meps.ahrq.gov/data_files/publications/st487/stat487.pdf
AHRQ MEPS Summary Table; 1996-2015; https://meps.ahrq.gov/mepstrends/hc_cond/#plot-tab
Dietary Guidelines Process; Health.gov https://health.gov/dietaryguidelines/process.asp
“Wellness Company Noom Raises $58 Million, Led by Sequoia Capital to Grow Its Team and Improve Its Consumer Offering” May 2019; https://www.prnewswire.com/news-releases/wellness-company-noom-raises-58-million-led-by-sequoia-capital-to-grow-its-team-and-improve-its-consumer-offering-300843657.html
“Talk space picks up $50 million Series D”; May 2019; https://techcrunch.com/2019/05/29/talkspace-picks-up-50-million-series-d/
“Wellness startup HIMS enters the unicorn club with $100M investment” January 2019; https://techcrunch.com/2019/01/28/wellness-startup-hims-enters-the-unicorn-club-with-100m-investment/
“Erectile Pharmacy app ROMAN raises $88M to launch ‘quit smoking’ kit”; September 2018; https://techcrunch.com/2018/09/18/roman-zero-quit-smoking/
“Behavioral Health: Fixing a System in Crisis”; Modern Healthcare; https://www.modernhealthcare.com/reports/behavioral-health/#!/
“Mental Illness by the Numbers”; National Alliance on Mental Illness; https://www.nami.org/learn-more/mental-health-by-the-numbers
Dearborn-Tomaso et al “Association of Dietary Patterns in Midlife and Cognitive Function in Later Life in US Adults Without Dementia” https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2756255
Great post Paul. As a firm working exclusively across the healthcare + wellness continuum, much of our focus at Trajectory is on these self-care, take charge consumers, who are increasingly growing in numbers.
We refer to them as Active Health & Wellness Explorers. As impetus for their growth, I would add to your three trends above: 1. the aging population and their desire to stay healthy and participate fully in life; 2. trying to cope with demands and stressors of modern lifestyles and; 3. mindfully managing health to proactively prevent problems by looking to natural means, e.g. food, exercise, sleep, stress management.