Episode Summary
As healthcare transitions from a delivery to ‘self-owned’ care model, effective solutions that engage consumers are needed. New growth strategies are going to help us integrate digital platforms and create new models of care. During this episode, John Troup and Jenna Philips share the latest insights on the world of digital platforms and how they influence consumer engagement.
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Speaker 1: Welcome to CHPA Chat, conversations in the consumer healthcare industry with Anita Brikman.
Anita Brikman: Welcome folks to CHPA Chat. So today we're talking about the fact that healthcare is transitioning from a delivery to a self-care model. So how are there effective solutions that engage consumers? That's a must. John, over to you.
John Troup: Thanks Anita. And thanks to our listeners for joining us today. We've got a great podcast today. We're going to talk about digital health and the delivery of digital health. And today I'm excited about our guest, Jenna Phillips, who is a principal consultant at PA Consultants and is a member of their consumer health group and an expert in public health and consumer packaged goods. Welcome Jenna.
Jenna Phillips: Hi there. Thanks so much for having me on.
John Troup: So it's really cool that you're a principal consultant at PA consultants. I know that they're an innovative and transformative consultancy group really focused on trying to create a positive human future in a technology driven world. So what does that really mean and what are you working on that we can talk about to get started here and before we get into the meat of digital health?
Jenna Phillips: Yeah. So a PA is a purpose driven company. So just as you were describing, we're focused on bringing a positive human future in a technology driven world and that exists across sectors. So we work on all major sectors, including healthcare, life sciences, biopharmaceuticals, consumer packaged goods in manufacturing, transport, agriculture, all the things that make the economy tick. So the work that I do is focused pretty much at the intersection of healthcare delivery and consumer goods. So I think it's really exciting time for the industry as healthcare becomes more consumer focused and consumers are becoming increasingly aware of the value of health and wellbeing in their everyday life. So that pressure and that convergence is coming from both sides where I think there's really interesting inflection point coming, or maybe already here about consumer healthcare and how that's enabled by technology to drive progress. But across PA, that's just the sort of thing that we're really interested in, kind of that intersection of technology and to human potential.
John Troup: Yeah. Well, there's no better time than what we've just gone through in the last 12 plus months to be able to look at this. The consumer behavior has been really amazing to see, especially the adaptation in the improved awareness that consumers now have on healthcare. And so I'm kind of curious a little bit on some of the behaviors that we see, especially in the dietary supplement category and consumer health care in general is that consumers now want to own their health. And while in the past that may have been considered self care, which means, okay, I decide that I need say an OTC product, or I'm going to take a calcium for bone health. I think it's expanded a little bit to this concept of personal health care, where you can choose to use a health care professional to help you decide, but at the end of the day, you own it or co-own it. And the digital platform is really going to help facilitate and accelerate that. But are you seeing the same trend in the same behaviors that I just described?
Jenna Phillips: Yeah, I think that's right. So a few things that you alluded to influence that change, I think. So of course COVID-19 rocked all of our worlds, but in particular, our focus on health became that much more acute. So, so many Americans had direct experience or secondary experience with the pandemic and that focus on immunity and health has really jumped to the top of our collective radar screens. At the same time I think personalized and precision medicine have made some really major advances going from where it has initially started in sort of the oncology space with targeted therapies in that area to now more and more chronic diseases, noncommunicable diseases, infectious disease, all have the opportunity to benefit from the insights into precision medicine and precision healthcare. On the consumer side, I think the transition from or in a circular way between self care, personal care is all sort of focused on that same concept of like the value of personalization.
So we want the things that work for us, and we want them to be delivered in a way that works with our daily lifestyle. So as more of us are spending more of our time at home, I think the delivery and this sort of channel of accessing people at home has really expanded. And that also has driven growth in telehealth as an offering. So I think that desire to make the decisions that work for you is driving progress across this kind of personal care, self care and down to the precision medicine space in highly complex disease areas. So it's all very much related back to, I think that focus on individualism and get me the thing I need at the time that I need it.
John Troup: Well, so digital platform delivery or use is going to be very engaging for sure, right? The consumer in particular will want to be part of that. But one of the things that we've also noticed in the category is that number one, everybody's talking about it. A lot of consumers, if not most consumers are using some kind of a digital, whether that's a smartphone or telemedicine, even if you would include that as a digital platform or specialized apps. To the point, and I'd like your perspective on this in particular, retailers are also recreating themselves to better use digital reach and engagement to consumer. And I'll give you a couple of examples that I think you're probably aware of too. CVS as an example are now creating their own kind of clinical health hubs. So is Walmart. And I understand that CVS is going more and more digital and they're going to be introducing sometime in the next year new digital platforms that'll be very engaging for consumers to become not only loyal customers, but to do a better job of taking care of their health.
Are you seeing trends like that by big manufacturers and by big retailers who can work together and opportunities to really leverage this new trend?
Jenna Phillips: Yeah, absolutely. And I think that sort of channel strategy is really interesting for me, really exciting space because increasingly in the consumer goods space, we're seeing this merging of the digital and the physical experiences, particularly in retail. And that I think has been really crystallized over the last 12 or so months with this new channel of buy online pickup in store, shorthand BOPIS, and merged experience, or one single experience where there's not that frictional transition between my experience online and my experience in a physical retailer. So CVS is an amazing example of that. Walmart's healthcare offering, I think, is making pretty significant inroads and advancement in that way and with a little bit of a different target market. And then there are real health systems that are putting roots into the community for care delivery at retail pharmacies, in grocery stores, finding people where they are.
So I think there's that traditional healthcare delivery channel that's moving more toward a retail delivery, but simultaneously retailers are moving toward that digital experience to provide that seamless access for consumers. I don't know that there's a great example yet of a healthcare company that has gone from true healthcare delivery in that institutional setting all the way to the other end of the spectrum with true and complete digital delivery. Though some of the hospital at home initiatives that are being pursued by some big health care delivery organizations might be getting there. But I do think that seamless channel transition is a really meaningful and important trend that healthcare and consumer health organizations are pursuing in different ways.
John Troup: So Jenna what's really interesting is everybody's using a digital technology these days, right? We know the consumer is very comfortable with digital platforms, whether they're smart phones or not. We know that retailers are adapting digital quite extensively. Manufacturers still have some work to do, especially as a growth strategy that can be developed. Will be really incredible in that happens. But I don't know yet if as a collective category, we would all agree with what digital is. So as an example, we know that there are online DTC direct to consumer websites or companies that have you come on and they'll give you like a digital personalized offering where you take an assessment and then you get a recommended set of products, but that's not really digital to the point where a platform engages you, stays with you and might even help you manage a specific issue or a health concern that you have.
How does and how should the healthcare look at defining what is digital? Is it, I don't think it is, but I'll ask the expert here. Is it telemedicine? I don't think so. Right? But what is digital? Is it app based engagement? How would you define it?
Jenna Phillips: So, digital, I think is a huge question and it's hard to say where it's going to go, because when I think about platform based businesses, I think of like the big social media companies that have developed platforms that have a variety of digital functionality, whether that's social networking, advertising, shopping, and increasingly when I look at Amazon's pharmacy offering, they're getting into healthcare as well. So I think for a digital platform business to succeed, it has to kind of take this perspective that we're going to be multifactorial. We're going to do different things and our offering is going to be personalized to our consumer or our patient's specific needs and requirements. So the topic you mentioned about direct to consumer, I would have thought like a year and a half ago before COVID, DTC was over. There were all of these explosive stories about blue apron or Casper mattresses that their customer acquisition costs were so high, the business model was not sustainable.
So I wouldn't have called any of them really a digital business, even though they use digital advertising, digital customer acquisition as a way to get their product to market. Similarly, the diagnostics question, I also don't really think that is a digital platform business. Though increasingly some organizations are building from a diagnostic all the way through the product experience, which I think you were alluding to with some of the more engaging health type of offerings. So not a healthcare company, but Weight Watchers or WW, as it's now referred to, I think has done a pretty good job of building a platform business that goes from diagnostic all the way through to product and experience delivery. So digital can be elements of that full life cycle and a full value chain of delivery using platforms. But I think big platform based digital businesses have the best chance of making the inroads into consumer's healthcare such that it's part of their daily life, part of their daily health practice or lifestyle behaviors.
John Troup: Okay. So at the very least, is it fair for us to say as well, we talk about digital. We're not talking about search engine optimization and online purchasing. It really is about focused engagement of a health issue, right It's a call to action more than a convenient way to shop or to talk to your practitioner.
Jenna Phillips: And think about human health as a platform. So when we talk about things like chronic disease, no human person says I have chronic disease. They have diabetes, maybe that's one part of their life or an element of their behavior or their day to day lifestyle, but you're not a person with diabetes. You're not a person with chronic disease. So I think if we think of health as a platform that opens up a lot more opportunities to engage across kind of the consumer needs states that go beyond, I have this specific issue that I need someone to fix. So it's less of that reactive need needs answer and more of a proactive approach to health and wellness. I think that's where self care, personal care, all of this kind of lifestyle ongoing medicine can lead to.
John Troup: Well, so let me ask you a question kind of maybe a little bit differently is that if a manufacturer or retailer is not thinking about this, they're already too late. Till that blank in for me. What is the this? What do they need to be thinking about strategically?
Jenna Phillips: Yeah, data analytics, I think is the top thing that manufacturers and retailers that I see in the market are not thinking about in a rigorous way, in most cases. So understanding who your customer is. So when I about very crowded or more commoditized categories, the differentiator often ends up being marketing because there's not a clear understanding of the needs state that's driving consumers to their product and analytics can really drive that. About a year plus ago, the last conference I went to before COVID was a conference all about personalized beauty, which is not necessarily something that comes up in kind of the health care space a lot, but I think it has some important crossover in that so many things these days are kind of in this like health and wellness space, often beauty and cosmetics gets lumped in there. And that panel discussion that I watched, that I thought was so insightful was a question to one of the panelists, asking what company operating in the personalized beauty space today has the best chance of success?
And the answer without hesitation was Google, Facebook, Amazon, these companies that are platform based businesses that have access to huge amounts of data on their customers can point you the consumer to the product that you need, knowing just what they know about you based on your behavior. So you don't need to go through like 50 different diagnostic tests, whether that's online assessments or blood-based biomarker assessments that tell you the product you should use to manage your eczema, whatever that might be, they already know so much about you. They can point you to that product that you can buy at Target or on Amazon or wherever. It's the product that's going to solve your need and you don't need to go down to N-of-1 manufacturing. So that's the power of data and analytics that I don't see a lot of businesses in the healthcare space operationalizing in a really meaningful way yet.
John Troup: So as is the key to understanding your consumer or an interested consumer's behavior is how to take that behaviorm translate it into something that's relevant to say a manufacturer's brand or product solution, and then engage the consumer to essentially push them toward that solution and try to create a loyal, sticky customer.
Jenna Phillips: Yeah. And I think in health categories, I think there's some ambivalence about marketing. Is it unethical for us to push consumers, customers, patients, whatever term you want to call end users to a particular product, and I think people are conflicted about that, but I think data can identify the product, the service, the solution offering that will likely meet the stated need. And so I don't have a problem with that, but I do hear that a lot in the healthcare space that people don't like that. It feels dirty in some way to market healthcare products.
John Troup: Yeah. What's the surface of information that you're helping a consumer improve themselves or in the world of healthcare is trying to get a consumer to adapt a healthy lifestyle with healthier products, right? So I'll give you an example that I'm curious about. The application of digital. If you look at the dietary supplement space in particular, there is an estimated over 70,000 plus products on the market. And so the classic online interaction is you go and surf, you Google a specific issue that you're concerned about and then you try to find a solution, but even that will take you from 70,000 possible products to 25,000 products, but the company who has a solution, maybe it's a diagnostic or an insight on how to manage a specific health condition and then can focus and direct you toward a possible solution that may take you down to a thousand products or even less. And so that's what I'm wondering. Is that what you're describing, when you look at behavioral metrics and analytics, digitization into something that's actually very relevant into how to use a product to improve in this case, a health outcome?
Jenna Phillips: Yeah, exactly. I think that's a perfect example of a platform based business where you go through this whole value chain or the whole kind of user journey as a consumer behavior concept that we use a lot, of how is the person finding this product? What do they need? What are the pain points that are driving them to make this search in the first place? And then once they buy it, how do you make sure they continue using it? So I think building those value adding services around the product itself really makes for a much stickier experience. And I think that's why you're seeing things like consumer wellbeing platforms explode with features around gamification, social engagement that make adopting healthy behaviors easier maybe in some way, or perhaps more have additional longevity than they might otherwise have with that. An email that I get that says it's heart month, you should really go for a walk.
John Troup: Yeah. It's really interesting, from a public health perspective, right? The biggest challenge in trying to improve chronic disease states or reduce the incidence or prevalence of chronic disease is figure out a way of how to control or influence behavior. Yet one of the biggest problems in the food nutrition and supplement area has been compliance and adherence to the point where haven't adapted a full switch to a better behavior. So do you see these digital platforms as being able to provide a possible solution where with essentially, and hopefully it's not this bad 24/7 engagement with a practitioner, a manufacturer or a retailer can start engaging and thereby effectively influencing the behavior of a consumer patient to improve outcome?
Jenna Phillips: I think that's the vision. I think there are a lot of hurdles to get people to adopt the healthy lifestyles that these platforms are pursuing. So that's social engagement, I think, is a big piece. Gamification and kind of our bias for reward and risk mitigation are all features that are often present on these sort of digital platforms that are targeting wellbeing. But when I think about the things that really motivate behavior and health behavior in particular is so hard, the digital platform experience just isn't yet to a point where I think people are really using those platforms in a way that's really influencing their behaviors. So I think it's still early days with these platforms. But when I think about all the news that's come out lately about social media companies and how they manipulate our brains to get this buzz when we look at our phone and see a notification.
We're so tied to the reward centers that these stimulate and for a health app to stimulate the reward center in the same way, it's pretty hard. So I think any of these health apps would say, I want to be the app that you open when you're standing in line at the grocery store. That's how ingrained into your day-to-day life health should be. And that's how they envisioned the future state of their business, frankly, is where you're using it so frequently and ultimately it's influencing better human health. I don't think they're there yet. I hope they get there, but it's a long road for a health app or health product of any kind.
John Troup: So who's really leading this race towards a digitized health? Is it the retailer or the manufacturer? And at the end of the day, is it going to be partnership and collaboration that's going to win the day, or is everybody going to end up going their own way? I am impressed with what I see and read by major retailers in healthcare today, introducing digitized apps that will include a customer walks into the store, the app pings you and says, oh, welcome to store on XYZ street. The last time you were here, you were in aisle five and you were looking for a solution for bone health. Awesome. And if that's true and that's happening, what can the manufacturers do to either catch up or to become a more relevant partner to retailers?
Jenna Phillips: So I think a few things. First, that kind of app experience is a competitive space, for sure. So it'll take a little while I think to shake out who has the best features, but increasingly RFID tagging, GIS and mapping technology is good enough that you can in fact do the thing that you were just describing at a retailer level. So I think that's a pretty promising and impressive space. The risk is there's so many of them that if each manufacturer has their own version of that app, it's pretty unlikely that any one of them is going to be successful. So that's where I think retailers have a pretty good advantage and the organization, the manufacturer, or whatever their stakeholder group that can operationalize partnerships in the best way, I think will be the one that wins. We work a lot with big companies, big companies have startup envy, I think, to an extent.
So startups are fantastic because they can quickly build technology, quickly roll it out, but struggle from things that big companies and retailers, the big retailers in particular are good at, which is customer acquisition and scale. So what we advise a lot of our clients to do is to pursue partnerships because there's a lot of advantages on either side of that startup versus big company piece. I think there's still some reluctance to do that because this kind of culture of intellectual property and the awareness that it's such a crowded space makes companies of all sizes reluctant to give any leeway. But I think as it becomes more crowded and there's more interest, particularly in the digital technology side, these partnerships are going to be really necessary to deliver a good experience that's actually meaningful and insightful for the consumer.
John Troup: You know, especially in the dietary supplement space, there are a lot of small to midsize companies. And usually they're the ones who innovate faster and can adapt or pursue things like digital health technologies faster than larger companies. But in this case, it seems to me that especially in digital health, the larger companies will have the advantage because they have more retail experience and they have the wherewithal because this is expensive technology, isn't it? So the adaptation of a big brand into a big retailer footprint, it's really going to take a lot of wherewithal, isn't it? It's not something that a small startup can do and by SEO optimization online convince 10 new customers a minute to buy your product, right? That's not what this is about. This really sophisticated, meaningful technology that's going to transform the healthcare category over time, won't it?
Jenna Phillips: I think that's right. And I think it's particularly the big retailers that have huge advantage in the space because of the access to consumers and scale. And many of them have made significant investments already in data analytics operations that can incorporate these insights more rapidly. So I would not say that a lot of the startups that are spending tons of money on customer acquisition to get a proof of concept to get the next round of venture funding are likely to make a huge splash in this space, unless they have really disruptive technology, which some of them do and can demonstrate product market fit in a really significant way early on.
John Troup: So beyond engagement, do you see in the continuum of healthcare, as we know it today, right? It starts with you go see your doctor. There's like a patient assessment, basically a dialogue with your practitioner. And then usually it goes to diagnostics. You know what? We're going to have to do a test. I'm going to do an MRI or I'm going to go do a blood diagnostic on you. I got to find out more information. Then you get the result and then you prescribe some kind of a therapeutic regimen or product selection. And then you wait and the revisit cycle continues. That continuum could all be digitized if it's an advantage. And is that important to link the different pieces in healthcare where they can be standalone and accessible as standalone rather than an fully integrated system of components.
Jenna Phillips: So I think healthcare delivery is the perfect example of how to achieve platform-based businesses. The way healthcare has traditionally been run in healthcare delivery, it's a fee for service industry. So we like to think that we're paying for healthcare as a service. I go in to the doctor, I have this issue, the doctor identifies it, I get treatment, I'm fixed. When in reality, the way healthcare operates is I'm going to perform X drug on you or surface on you and you pay me or your insurance company more likely pays me for that service rendered. I think if we change the way that we think about healthcare as a business, and increasingly this is happening with value-based care and some of the new payment models, we can actually adopt a way of thinking about healthcare delivery that's truly as a service where you have much more consistent engagement with a healthcare provider.
It doesn't have to be a physician. In fact, many states in the US have expanded scope of practice laws throughout COVID just to give more capacity to the healthcare system. So once COVID is not such an acute problem anymore, you now have a whole slew of nurse practitioners, physician assistants, critical care nurses who have been operating at a higher level of independent practice that now will probably be able to practice independently without that supervision of physician in many states, which is amazing because that builds huge capacity in our healthcare system to deliver more of these personalized as a service type of offerings.
So I think traditionally concierge medicine has been something that's like reserved for the rich and famous, and you have your doctor on call, and you can just give him a text whenever you are feeling an ache or pain, but with this increased capacity in the health care system and better access to digital tools, healthcare becomes infinitely more scalable than calling up your doctor and saying you have an aching knee, but then having to wait three weeks for an appointment with the extra capacity that's provided by practitioners who have more independence and digital tools that make that that much more accessible.
I think this help as a service business model is much more attainable for forward-looking provider organizations.
John Troup: That's really interesting. I've had a chance over the last several weeks to speak to some colleagues that are in the hospital world, healthcare provider world. And to my surprise, actually in the times of COVID, a lot of hospitals were under financial stress to the point they were significantly losing dollars, but those hospitals who had digital access integration engagement with the ones who were surviving, they didn't really miss a beat in engaging with their patients, and then that linked also to retailer drug stores who were digitized or developing digitized programs so that connectivity that you described actually can work and make a big difference on a number of key issues facing health care today. One last area that I want to spend just a little bit of time talking to you about is really the use of digital applications in professional education and actually education in general in healthcare. Webinars have been around for, I don't know what at least 10, maybe even 15 years as the virtual world that we've all become familiar with and most of us love these days, and those were always effective ways to deliver education. But do you see in the world of education new applications as a result of new digital technologies that can make a difference?
Jenna Phillips: Yes. I think this is a really interesting area particularly as more practitioners have more capacity and more independence. Those continuing medical education credits are still going to be required. Unfortunately, as you've described the way that healthcare and professional education in general has been delivered is in a classroom on a Saturday. It's like a two day course and you're stuck in a room with death by PowerPoint, which I can say tongue in cheek as a consultant because I commit murder by PowerPoint all the time. But I think we have moved now as you've described to more webinars or podcasts, or kind of on demand education. What I think is the next sort of frontier for health education is much more personalized. And again, data driven learning opportunities for clinicians. So if I think about any sort of specific practice area, there are a set of competencies that you have to demonstrate for maintenance of certification and to earn continuing education credits.
In my opinion, there's no reason why someone who can demonstrate those competencies on day zero, should have to go through a whole two day course to learn more about that when they're already meeting the competencies. So adopting a model a bit more like a Netflix or this kind of personalized curated content that understands what you know, what you like, what you want, what you need to learn more of can serve content to clinicians in a much more dynamic and responsive way that actually meets their needs so that getting these continuing education credits is not like the slog that I have heard from my clinician friends it often is to have to put the time into to earn those credits. So again, another amazing platform business Netflix, I think, is full of education opportunities, learning opportunities in education for healthcare providers.
John Troup: Well, so this is really, really cool information that you're sharing with us today, Jenna. What's amazing to me is that if companies are thinking about growth strategies or groups are thinking about strategic points of difference, this whole digital platform, digital world provides that. So for example, if you can't figure out patient engagement through digital platforms or collaboration as a manufacturer to a retailer, there's still an opportunity to think about strategy using digital health for influence like education. You can provide what you just described for education to influence a practitioner so they better understand the benefits of your product portfolio or when and how it can fit into a therapeutic regimen. So this whole area of digital health is really, really a fast pace and can really transform healthcare, especially as we come out of COVID, what's the future of healthcare look like? No doubt has got to involved digital healthcare delivery to some extent.
Jenna Phillips: Yeah, absolutely. And I think that's a great example that you gave about kind of manufacturers or brands engaging practitioners, which really gets back to one of my earlier points about channel strategy. So for high complexity health care products that clinicians are expected to prescribe or sell or deliver in some way, having trusted information that can be delivered directly to that clinician in a really dynamic way, I think is much more compelling than maybe the traditional door to door sales model that so many pharmaceutical companies have pursued. So I think you're totally right that digital health has amazing applicability across the entire stakeholder or landscape to improve care ultimately for patients.
John Troup: Fantastic. Jenna, this is really, really very insightful, very encouraging and an exciting area that I hope our listeners share the excitement that I'm walking away from with your insight on. So thanks for that. I'm curious though, you're the first person I've met that has the depth of knowledge and awareness on this topic in a long time. You have a favorite digital app. What do you do to take advantage of the technology that you know can make a difference with you?
Jenna Phillips: I am a big fan of Headspace. So shout out to PA Consulting for providing employees with a Headspace subscription, which has been an amazing meditation platform, but I have been using a lot through COVID where there are days where I don't leave the house except to walk the dog. So I think mental health has gotten its due attention throughout the pandemic and hopefully keeping up things like meditation activities will continue to improve our mental health beyond COVID.
John Troup: That's awesome. I just recently saw a digital health app called Calm. Is that the same kind of thing as Headspace?
Jenna Phillips: Yes.
John Troup: Awesome. Awesome. Is there a digital substitute to walk a dog or... There's no substitute for exercise.
Jenna Phillips: [crosstalk 00:37:40] for exercise.
John Troup: Jenna Phillips from PA Consultants, thanks very much for sharing your insight and expertise on what digital health looks like today and what the use of an application can look like for tomorrow. Thanks very much for joining us and for all your insight.
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