While anecdotal evidence abounds in daily lifestyle news stories, there is ample support in the empirical data: the future of health is wellness.
From a purely medical standpoint, 70% of American medical expenditure could be avoided if people took simple steps to improve their physical wellness behaviors: refrain from smoking, improve body mass index, eat better and exercise. Unfortunately, only 2.9% of Americans actually do all four of these things on a regular basis.
From a consumer point of view, wellness has migrated from being seen as a luxury to being an expectation. Organic, “free-of” and “plant-based” are woven into our language. New fitness concepts with science-based approaches, like Orange Theory, are expanding rapidly, and mental health apps are growing fast. People are engaged with wellness, and they are disengaged with treating sickness.
From a financial perspective, wellness is a $30 billion industry and growing at 5% annually, well ahead of the 2% seen across other consumer categories. Enterprises that fail to evolve will pay a price. In February, $16 billion in Kraft Heinz’s value was erased in one day as investors internalized weak growth prospects for a portfolio of brands that is out of step with the new wellness expectation.
While these arguments to address wellness are clear, why are established healthcare organizations so slow to take on the challenge? Obviously, healthcare is a complicated issue. More significantly, lots of big players are being held back because they are making too much money from the current system.
A wellness model is not in their best interest. Their compensation is being driven by fueling the current system, not reinventing it. More than this, and specifically in the case of wellness, it’s not a matter of doing one thing right, but of doing lots of things right. It takes an integrated model with many components, which in and of itself can be complicated.
However, as has been proven in other established market categories, innovative thinkers emerge and disrupt conventional thinking. Parsley Health is emerging as one such disruptor in the healthcare industry, and legacy organizations would be well-advised to learn from this new player how to unlock the potential for integrated wellness.
At Parsley, members are presented with an integrated wellness solution embracing traditional medicines and therapies, detailed diagnostic data, lifestyle coaching and supplements, all with a simple, but pricey, subscription model of about $150 per month. The company’s philosophy focuses on identifying the root cause of ailments and prioritizing behavior change and mental health strategies before writing prescriptions.
Parsley doctors are generalists and have additional training in nutrition and diagnostics. Doctors are compensated based on objective wellness outcomes and patient satisfaction.
Should Parsley be imitated? On one hand, Parsley represents a bold idea with momentum and financial support. On the other, it is unclear whether the pricey economics and upscale positioning will attract enough patients to be sustainable. No matter where Parsley ends up, healthcare companies should watch carefully and consider some of the elements that Parsley is incorporating, like:
Most organizations have an internally driven view of the world, with teams organized around established brands or offerings, but this approach focuses resources around the business as it is today rather than solving new customer problems.
Parsley clearly puts customers at the center of its offering, from the feel of its space to the multi-disciplinary, integrated approach. The organization identified the insight that people want wellness, but in a simple, seamless way. Instead of becoming another step in the wellness journey, Parsley positions itself at the center and plays a sherpa role to make wellness simpler.
We believe that organizing teams according to benefit areas or generational cohorts expands the horizon and forces people to serve broader needs. Teams can spot pain points and insights across broader categories that may have been overlooked.
Connecting the dots
Beautifully designed doctors’ offices are not new. Parsley’s real novelty is the breadth of its bundle of services. Parsley does not pretend to be an expert in every facet of health, instead incorporating specialists and third-party-produced products as needed.
We believe integrated wellness is a team sport. No company can provide the total bundle. Companies need to start with their area of strength and identify external partners to create a coalition that can be bundled and branded together. Think “buy it, don’t build it.”
Healthcare takes itself pretty seriously, but Parsley dismantles this convention. The company wants people to look at it, and the category, with fresh eyes.
Branding is about sending signals that tangibly deliver on a promise. Parsley, for its part, signals it is a completely different category model, from the amount of time a doctor will spend with you to its partners in nutrition and fitness to its non-traditional office hours. Its branding evokes innovation and natural vitality in an integrated, seamless way.
We believe companies need to be brave branders. They need to be open to creating equities and resist the reflex to incorporate the parent brand in new ventures.
Is Parsley’s model truly sustainable? Is the mass market really ready for it? Nobody knows. But we should encourage the innovators in their bold experiment and ask how their approach could push wellness forward in legacy healthcare firms.
Allen Adamson is cofounder of Metaforce and an adjunct associate professor at the New York University Stern School of Business. Barton Warner is former VP, strategy and portfolio management, at Bayer and a strategic partner of Metaforce.