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Wellness Market: Too Many Chasing Too Little

by John Moore | October 15, 2013

CrowdHaving taken a hiatus from last year’s Health 2.0 event, was looking forward to this year’s event to see what may be new and upcoming among those looking to disrupt the status quo. Unfortunately, surprisingly little.

Health 2.0 a couple of weeks back had your usually cheery crowd of those who are looking to transform healthcare. As with past Health 2.0 events we have attended, hype was far out in front of market reality but that does not seem to deter the cheerleaders, which were again present with abundance among the some 1,700+ attendees.

Show Me Your Big Data – That’s what I thought, not so big after all
There was plenty (i.e., too much) talk about Big Data when in reality, presentations focused on relatively small datasets with little thematic similarity in any one session. For example, the Risk Assessment & Big Data session had Dell talking about genomics, Sutter Health talking predictive analytics for CHF, another about mashing up claims and clinical data and the last looking at risk assessment. At the conclusion of this session, nary a question was asked – audience confused. Another session on Big Data tools for Population Health Management (PHM) was cut short, thankfully, when the power died. Hard to say if it is the industry drinking the hype, this particular event (though experienced similar at HIMSS’13), or what but this silliness has to stop – we really need clarity, not smoke n’mirrors =- and don’t even get me started on PHM…

Track Me – Track You and no, I probably don’t want your data, at least not yet
In addition to riding the Big Data hype, the event also jumped on the hype surrounding the rapid proliferation of self-tracking, biometric devices now entering the market and all the great things that will come as a result of consumer adoption and use of such devices to monitor health. Not all are jumping on this band-wagon and for good reasons. There is no doubt that in time, such devices will be used by clinicians and patients together which will be the focus of a forthcoming Insight Report from Chilmark but our early research points to a number of challenges in the adoption and use of such devices in the context healthcare delivery.

There was again a plethora of solutions for price transparency. Some odd partnerships that are more opportunistic, for the partners, than providing value for the end users, e.g., the Dr Chrono-Box.net demo was so laborious I can’t imagine any clinician actually doing it. On the patient engagement front, plenty of new solutions on display and was particularly impressed with what Mana Health had build for the NYeHC patient portal contest. Simple, clean, straight-forward and intuitive to use refreshing.

Of course no Health 2.0 event would be complete without one of the large commercial payers taking the stage to announce their latest and greatest member outreach initiative. Two years ago it was Aetna with CarePass. This year it looked like it would be Humana until they were a no show – but Cigna was there with GO YOU Hub. First impressions of GO YOU: a fairly shallow pool in the health & wellness domain with lots of catchy phrases and colors – something your pre-pubescent daughter may like – but this adult quickly lost interest after four clicks

Health & Wellness Redux, Redux, Redux
And again, no Health 2.0 event would be complete without a gaggle of health & wellness solutions, the majority of which won’t be around by 2016.

There are now far more health and wellness solutions in the market than what the market can absorb. This situation is not likely to get better anytime soon as the numerous incubator/start-up accelerators continue to spew more of these solutions into the market every year. The only thing I can think of is that the barriers to entry must be exceedingly low, yet few of these companies realize that the barriers to adoption are exceedingly high and the market is on the verge of contraction.

The Big Squeeze
We are now projecting a significant level of contraction in the health and wellness arena as the broader market comes to grips with a shift in risk from payers to providers with providers ill prepared to accept that responsibility and the migration of many employees off of their employer plans and onto Health Insurance Exchanges (HIX).

This will create two challenges:

Providers are not accustomed to providing such solutions to their patients. While risk may shift to providers, provider adoption and use of such solutions to manage their patient populations is limited. When one adds in self-tracking devices, well…

…providers are struggling with the data dumps from their recently install EHR. The last thing they are seeking is another data source. Healthrageous is one example. A self-tracking wellness solution that was developed by provider Partners Healthcare, adopted in pilots by some big providers, failed to gain traction and was quietly sold to Humana. Not a pleasant outcome. If a provider organization can’t make a go of it through a spin-out, to the multitude of these health & wellness solutions think they can?

Second, we are at the very beginning of a massive shift of employers directing employees to HIX. Despite a fitful start, the use of HIX will grow overtime as a wide range of employers, but especially those in the retail and hospitality industries, direct their employees to these exchanges. Shifting employees to HIX reduces employer exposure (risk shifting) and will lead to decreasing interest and adoption of health and wellness solutions by employers.

Yet despite these challenges, the cheerleading at all Health 2.0 events and a questionable future, one thing that comes through every year is that there are a significant number of people that truly want to do something good, something meaningful to improve the sorry state that is our dysfunctional healthcare system, which we all struggle with at times. These are the people that attend Health 2.0, the ones willing to talk about the “Unmentionables”, the ones to project a vision of a better future for us all, the ones willing to take a risk. For that they should be applauded. But be wary as most will not be around three years hence.

But next time, can we actually have some front line providers in greater abundance to give us their take on all of this. Unfortunately, this event was sorely lacking in such, though it did have its fair share of various healthcare representatives – they just weren’t the ones from the front lines which is who we all need to be hearing from today.

Special thanks to Graham Watson for the image. Graham is easily the best cycling photographer in the world today.

And an extra special thanks to Cora who was there with me and provided a few tidbits of her own to this post.


11 responses to “Wellness Market: Too Many Chasing Too Little”

  1. Dave Chase says:

    Tom Evslin famously said “nothing great ever happens without a bubble.” The worthy that survive enable the transformation we all desire.

    The only thing that concerns me is those that use puff metrics and ultimately create scorched earth for worthy startups. It’s not hard to find well-funded examples of that. Some are currently hoodwinking supposedly sophisticated investors.

    • John says:

      Yes Dave, and Kevin, I do realize that bubbles are a natural part of the maturation of a market and during the embryonic stage we do need cheerleaders to keep spirits high. I see these two things as one side of the, for lack of a better metaphor, scales of justice. We also need the other side of the scales near equally weighted with honest critique and assessment, which from my vantage point is far too infrequent.

      But I end up just chalking it up to our jobs/roles as industry analysts – making sense of it all and occasionally calling it out to keep those scales in balance.

      As an aside; at a recent user conference here in Boston I had the pleasure to hear Jeffery Brenner of Camden Hotspottter fame. He has personally seen what works and what doesn’t and just how broken the system is. His words of advice: “Nothing interesting will happen in the heart of the healthcare market – all the interesting things will occur on the edges, in places that most ignore – that’s where will find innovative approaches to delivering healthcare and possibly a solution to some of the challenges we now face.”

      Caveat – of course that was a paraphrase of what he said – I don’t have that good a memory, but is the gist of it.

      • Dave Chase says:

        John – I have no problem with the balance. It’s always needed. It’s to be expected that conferences are of a cheerleading nature. I hope you shine the light of scrutiny on some of the later stage, well-funded puffery. I have no problem when a company paints the rosiest picture possible…it’s when they step well over that and ultimately harm the companies that will follow their inevitable crash down to earth.

        I couldn’t agree more with Brenner’s comments. It’s one of the reasons I have OCD on DPC (Direct Primary Care) — it’s one of the few areas I see wholesale change and the true Triple Aim being achieved.

        • John says:

          I’m with you Dave. We certainly won’t see it come from the large HCOs of today as they are too wedded and encumbered to existing models of care delivery. Sure, they’ll have their place in the future but it will be a far cry from what we see today.

      • Kevin Yen says:

        I find your quote of Jeffrey Brenner very encouraging, especially coming from an honest analyst 🙂

        I am one of those working “on the edges” as my background is more classic tech (Google/ YouTube/ Netscape 10+ years) than healthcare (3+ years).

        I’m working my hardest to ensure our public launch adds more to the maturation of the industry and less to any hot air in the bubble.

        • John says:

          Hi Kevin,
          Like you, I am not from healthcare sector but came over from mfg where I saw what IT can do to operations if used wisely. It never ceases to amaze that for an industry that is so knowledge intensive, that the use of IT is so exceedingly poor. I truly do believe that IT will play a role and hopefully folks like you and I that have no preconceived notions of what is and is not possible, can make a difference. My only fear is that too much noise, often covers the signal beneath that really needs to be seen and heard by others. In wellness, there is a heck of a lot of noise.

          Thanks for joining the conversation and do keep me/us at Chilmark Research posted on your progress as I see a key role of an analyst firm is to adjust the signal to noise ratio.

  2. Kevin Yen says:

    I enjoyed your article, as usual. I value well-grounded assessments, which are too rare on the interwebs.

    I also do value and respect the role of the early, vocal cheerleaders (here and in most industries undergoing transformation). It’s a tough job with lots of public vulnerability.

    Though they can’t all be right in their timing, a few will succeed, and I give them all collective credit for helping us get there faster.

    And combined with well-grounded assessments such as yours, we’ll get there fastest 🙂


  3. Tyler Hayes says:

    Until I read this post I thought I was a bit alone in having these thoughts. Really glad to see someone else looks at these events with equal curiosity and skepticism. I wrote a bunch of critical thoughts on Blue Button itself at http://electronichealthreporter.com/thoughts-on-blue-button-6-reasons-why-it-lacks-adoption-and-its-troubled-future/ and I feel OK saying I’d safely extrapolate each of those thoughts to the industry as a whole. Especially the modern health tech movement (both software and hardware).

    Talking the talk is fine by me, as long as people are walking the walk first. We need more walkers and more walking.

    • John says:

      Tyler, thanks for chiming in and yes, you are not alone. After such a post I tend to get quite a few direct emails expressing similar views or at least thanks to us for providing a clear, realist view of what transpired at any conference we may attend – including Health 2.0.

      Read you article on Blue Button and while I agree with much of it, would be cautious to level those six reasons across the industry as a whole. And as to Blue Button itself, for the last couple of years we have asked HIE vendors who can implement Blue Button. First year we asked, about a third said yes. This year it was closer to 80%. Problem is, as one executive put it to me: we did nice to support ONC’s, CMS’s and the VA’s efforts. However, not one single client has asked for it (this was an HIE vendor that sold into the private, enterprise market. In the public arena, some state-wide HIEs have Blue Button on their roll-out map, after physician engagement. Stay tuned.

  4. John:

    Not sure if you plant me in the ‘cheerleading bucket’ or not, but how bout going live with us (Pat Salber & me) on this week in health innovation.

    I’ve been tweeting and blogging since 2008 about the unintentional dis-service many in the health 2.0 developer community may be serving albeit under the auspices of presumptive ‘patient empowerment’ agenda that really serves the continuation of a cost shifting charade from the plan sponsor to the beneficiary under the banner of ‘consumer directed’ aka high deductible, health plans.

    Lets talk about the elements of your critique and some of the conclusions you draw. We schedule on Wednesday at 1PM Eastern. You game?

    • John says:

      Hi Gregg,
      Sounds interesting though pretty tight time schedule leaving me little time to actually prepare which may lead to some cringes from your audience.
      DM me via twitter and we can go from there.

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