How Technology and Changing Attitudes are Enabling a Revolution in Direct-to-Consumer Health Care

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By Mike Kuniavsky

People’s attitudes toward personal health management are changing based on the self-control they get from other online services. Consumers increasingly want to control how their health is managed, much like they can control what they do online, whether it’s watching streaming movies, ordering food or buying stuff. 

This change represents a deep structural power shift from the traditional gatekeepers of medicine—doctors, pharmaceutical companies, insurance companies—to consumers. The Internet already revolutionized medicine by providing access to information (and, unfortunately, misinformation) that was historically the purview of specialists. Now, increasingly, the shift is not just about where information comes from, but how the actual care is delivered: who diagnoses conditions, who prescribes medicines, who makes those medicines, and who oversees the care. Various digital technologies are accelerating this new shift, from sensors that analyze body conditions to AI-driven adaptive therapies, to custom-manufactured personalized prescriptions.

Direct-to-consumer business models are shaking up many industries, from retail to psychotherapy, by bypassing traditional channels and gatekeepers. Buyers value these models not just for the logistical convenience of being able to order a prescription refill at midnight, but also due to the wholesale reduction in cognitive load that “always there, always aware” services create. Illness is a large psychological burden in itself, but the logistics of remembering what medicines to take, what to reorder, what appointments to make, how to interpret what doctors say, and how to track necessary behavioral changes, is an additional enormous psychological weight.

Sensor-driven, multi-touchpoint, digitally-integrated health management services offer the promise of relieving a significant part of this cognitive load, while simultaneously providing a business opening for health care providers challenged by attitudes that are shifting attention away from traditional brands and therapies. Such services will be centered on addressing health management conditions across different times and contexts, rather than by selling specific symptom-relieving molecules. Digital technologies (think apps) are key to integrating the delivery of therapies across locations and situations, encompassing over-the-counter molecule symptom relief, pharmaceutical disease management, and behavioral and lifestyle therapies.

EVOLVING HEALTH MANAGEMENT ATTITUDES AND POWER SHIFTS

People have discovered they can control many aspects of their own lives that used to be out of their control, from what’s on TV to the kinds of clothes available in their sizes. With growing access to online resources, more people are now seeking to apply such control to their health care.

For better or for ill, the convenience of online shopping has become the mental model for many kinds of other life management choices. Online shopping demonstrates that for many things, you can get what you want, when you want it, and where you want it. This dynamic has set strong expectations for more control and choice in other pursuits, which can be simultaneously liberating and paralyzing due to the implicit expectation that because you can optimize something, you should.

Consider the sensor-driven “Quantified Self” movement, which incorporates technology into data acquisition about various aspects of a person’s daily life. This trend is epitomized by the health focus of the Apple Watch, which shows there are many things people can do to manage their health without ingesting a substance, whether it’s through managing their weight, relaxation, sleep, or cardiac health.

In another parallel development, in the US medical marijuana demonstrated to consumers that doctors are not the only gatekeepers for prescription pharmaceuticals, as the marijuana industry recruited doctors who would be happy to prescribe pot after a short consultation, for a fee. This created an alternate path, and an alternate means of control, for consumers to get access on their terms, apart from the traditional axis of personal doctor/pharmacy/health insurer. The cannabis industry model has created a new set of expectations for how people can be prescribed, get and consume pharmaceutical medicines.

Taking cues from this unlikely combination of factors, several startups began to cater directly to people’s health conditions, bypassing traditional medicine. Smoking cessation service Zero offers a combination of prescription cessation medicine, nicotine gum, a craving tracking app, and a telehealth service that provides physician consultations through the phone at any time. The app is not just an afterthought, however, or a gimmick to make it easier to reorder gum, but a core part of the service that ties together the other components so it acts as a kind of hub for tracking progress, getting advice and contacting support. All the components of this integrated service were available before Zero, but they had not been integrated into a single service. Integrating them was additional cognitive load that the patients had to do on their own, and the tracking, ordering, and getting information was entirely the responsibility of the person with the health problem.

Increasingly, artificial intelligence will take on more of the burdens of reducing the cognitive load by identifying when the person is falling off the wagon, for example, and alerting them and their doctor, while automatically adjusting their therapy in response. Zero does not do this, but imagine if it could track the amount of nicotine in a patient’s blood through their skin or in their sweat (smart watches already have many bio sensors on them and this is not inconceivable, although not currently available). Using the patient’s self-reported cravings, when it collected enough data it could start to predict when the patient would have a craving, alert them, and dynamically adjust their treatment. The patient’s primary therapeutic relationship would then be with the company that made the app and supplied the products, not with any primary care provider or pharmaceutical company.

This is of course not an ideal relationship for general medicine – no foreseeable service will cure a kidney stone, set a broken arm, or diagnose congestive heart failure, and none should. Right now many of the startups in this space are focused on lifestyle medical issues for younger people: Zero focuses on smoking, Hims on erectile disfunction and baldness, The Pill Club on birth control, etc.

DIRECT-TO-CONSUMER BRANDS DISRUPT TRADITIONAL SALES CHANNELS

Simultaneously, direct-to-consumer business models are disrupting traditional brands and businesses from transportation and clothes to fresh groceries. By giving people direct access to brands, rather than depending on retailers, these brands demonstrate to consumers that traditional retail sales channels often did not support brands – they undermined them, while adding little consumer value.

Direct-to-consumer models don’t just remove the hurdle of going to a retailer. They change the basic relationship with consumers by focusing on the consumers’ needs and how to address them, rather than by selling them more of a single product for a manufacturer. In fact, new online subscription boxes satisfy a class of customer needs using an unknown variety of brands, or even no brands at all (Brandless being the eponymous poster child). 

Direct-to-consumer services cleverly wrap an integrated set of physical products within some larger context that reflects the needs and desires of the customer, whether it involves the products’ reordering frequency, specific composition, additional information, or concierge customization.

Peloton, for example, is not just an exercise bike manufacturer: they are a health club replacement service, recreating the experience of going to a live class, complete with coach interactions and social interactions with other class participants, but without leaving home, for a monthly subscription fee. The bike is not where the core value lies, though it’s a necessary component, while the simulation service provides the real source of value. 

DIGITALLY CONNECTING THE DOTS BETWEEN PHYSICAL EXPERIENCES AND PRODUCTS

Amazon has become expert in using its vast knowledge of consumer interests and spending habits with traditional consumer brands to identify where to create novel direct-to-consumer experiences that can be launched to undermine traditional brands and connect experiences across different locations and use contexts. Alexa is always somewhere back there, ready to continue playing that record or re-order that thing. This approach makes Amazon the elephant in the room for traditional physical and digital products, due to the company’s advantage based on its massive set of customer relationships that are closely tied to known purchasing histories.

Cloud-based technologies can tie together disparate touchpoints to create such coherent experiences for health care brands as well, by combining historically distinct contexts and channels. This strategy relies on a wide range of data sources to identify specific aspects of individual and group behaviors and preferences to anticipate their needs while reducing the cognitive load and friction for buyers.

Always-connected digital technologies provide continuity between different contexts to create the perception of a single experience woven together from a range of different times (workweek vs. weekend), locations (store vs. car), or activities (driving vs. biking vs. shopping).

The health care industry is ripe for major disruption based on this direct-to-consumer trend, but new business models are needed to quantify the emerging market opportunities. The required process components will involve condition-specific user research; multi-touchpoint service designs; sensor identification and development; and artificial intelligence and machine learning systems to identify specific behaviors and recommend interventions.

To succeed, health care providers will have to step away from their traditional silos and self-definitions to deploy multi-touchpoint services that are focused on long-term efficacy through a range of interventions such as personal tracking, customized advice, behavioral and lifestyle changes, prescription pharmaceuticals, and over-the-counter symptom relief medicines. “We are a chemistry company, we don’t do services and we don’t want to know about AI!” will not fly. People do not want to distinguish between the different divisions of a multinational, they want to address their health problems. Service design, AI and pharmaceutical chemistry will be part of the same continuous experience from the perspective of consumers, and it should be for the organizations that deliver those experiences.

Moreover, just as people are moving away from historical brands, services will tie people more closely to these new brands because the brands will represent an investment in information that addresses people’s conditions, rather than just trying to sell them a bottle of symptom relief. In this way, the service will become stickier and harder to replace even if all the parts are commoditized, because the value is in the efficacy of the long-term relationship that is being created. In so doing, service providers can drive new sources of recurring revenue and larger profit margins than through standard retail models, while consumers can enjoy reduced cognitive load and greater convenience in all aspects of their condition management.

About the Author:

Mike Kuniavsky is Head of Design for PARC, a Xerox Company. He is a user experience designer, researcher, and author. A 20-year veteran of digital product development, Mike designs products, business processes, and services at the leading edge of technological change.

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