巴克萊-美股投資策略-美股主題投資：數(shù)字健康如何成為CPG的市場機遇-2021.5.18-52正式版

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EquityResearch

18May2021

U.S.Thematic

TheConsumerIsin:HowdigitalhealthcanpresentaCPGmarketopportunity

ThroughouttheCOVID-19pandemic,consumershavebeeninundatedwithwarningsabouttherisksofco-morbiditiesandinmanycasesdeferredroutinehealthcare.This“shadowcrisis”fallsatopwhatwasalreadyachronicdiseaseepidemicintheU.Swhere60%ofadultshaveachronicillness,theleadingcauseof$3.8tninhealthcarecosts.Assuch,intheaftermathofthepandemic,webelievetherecouldbegreaterconsumerwillingnesstoengagewithandspendonhealth.Meanwhile,digitalhealth(everythingfromhealthITtoapps,consumertech,telemedicineandpersonalizedmedicine)hastakenoff.Inourview,wherethisincrementalconsumerdemandforenhanceddiseaseprevention/managementintersectswithdigitalhealthliesapotential~$40bnTAM.

Digitalhealthconnectsthedots.Inourview,theintentisnottojusttranslatethephysicalexperiencetoavirtualonebuttoprovideasuperiorhealthcareexperiencethatleveragesdata,AI,andvarioustechnologyplatforms(includinge-commerce).Assuch,consumersbenefitfromasingle,connected,data-drivenapproachthatseamlesslyintegratesintotheireverydaylives.Thisinturnunlocksaprevention-basedandhyper-personalizedhealthcareregimen.

Emboldenedbydigitalhealth,consumerscouldimplicitlydecideto“pullforward”someoftheexpensepotentiallyincurredifdiagnosedwithachronicdisease,andspendonnon-prescriptionproductsinsteadinthenameofpreventionofdiseaseordiseaseprogression.Ouranalysistakesdisabilityadjustedlifeyears(DALY)asaproxyfortheburdenofchronicdiseaseandlayersatopaverageincometocalculateanearly$40bnTAM.Ifweearmark1/3rdofthismarketopportunityforCPG,itwouldequateto~$13bn,or+1.5-2.0ptsoftotalgrowth,byourmath.Thisislargelyincrementaltothegeneralhealth&wellnessmarket,inourview,becausetheconsumerjourneyandthusbudgetforthisparticularconsumptionstartsinahealthcarerealm.

Inthisnote,weexplorefivedifferentwaysCPGcouldcapitalizeonthismarketopportunity:1)currentconsumerhealthportfolios,2)digitalmarketing,3)renovation

innovation,4)distribution&partnerships,and5)CorporateVentureCapitalandM&A.Ourkeytakeawaysarethatthiscouldleadtoademocratizationofhyper-personalization,greateropportunityforsubscription-basedrevenues,“invisible”anklebiters,increasedemphasisonR&D,greaterscrutinyand/orhigherstandardsonthepartofconsumersintermsofwhat“healthy”productsare,heightenedfocusonauthenticity,potentiallynewsub-categories,andmoreexplicithighlightingof“consumerhealth”portfoliosandcredentials.Andlastly,scalecouldbeastrategicadvantage.

ESGTakeaways:There’sa“social”narrativeunfoldingthatwebrieflyaddress.Expandingaccesstohealthcareandstoppingdiseasebeforeitstarts(i.e.“theholygrail”)improvesDALYsandreducescosts.But,somerisksincludebiasinalgorithms,over-treatment,andprivacyinfringement–whileunauthorizedaccesstobigdatacouldbeasecurityissue.

BarclaysCapitalInc.and/oroneofitsaffiliatesdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.

ThisresearchreporthasbeenpreparedinwholeorinpartbyequityresearchanalystsbasedoutsidetheUSwhoarenotregistered/qualifiedasresearchanalystswithFINRA.

PLEASESEEANALYSTCERTIFICATION(S)ANDIMPORTANTDISCLOSURESBEGINNINGONPAGE42.

Barclays|U.S.Thematic

TABLEOFCONTENTS

CONTRIBUTINGAUTHORS 2

TABLEOFCONTENTS 3

EXECUTIVESUMMARY 4

CONSUMERIZATIONOFHEALTHCARE+CHRONICDISEASE

CONUNDRUM=DIGITALHEALTHOPPORTUNITY 7

ConsumerizationofHealthcare 7

TheChronicDiseaseConundrum 9

WhyDigitalHealthCanConnecttheDots 10

DIGITALHEALTHISNOTNEW,BUTSTILLINTHEEARLYINNINGS.11

FromRevolution… 11

…ToRenaissance? 12

So,WhereDoWeStandToday? 13

THECONSUMERWILLSEEYOUNOW:THEDIGITALHEALTH

FLYWHEEL 15

“Ihaveasmartphone,amIadoctor?” 15

Personalization&Prevention 18

SpotlightonTelemedicine,Sensors&Batteries,andArtificialIntelligence 19

SpotlightonTelemedicine,Sensors&Batteries,andArtificialIntelligence(cont’d) 20

SpotlightonTelemedicine,Sensors&Batteries,andArtificialIntelligence(cont’d) 21

JUSTWHATTHECONSUMERORDERED:A~$40BNTAM 22

AnalysisMethodology&Considerations 23

COMMONSIDEEFFECTSCANINCLUDE…:POTENTIALCPG

APPROACH 25

ConsumerHealthPortfolios 25

RenovationandInnovation 28

DigitalMarketing 32

Partnerships&Distribution 34

CorporateVentureCapital(CVC)andM&A 36

FromParadoxtoParadigm?KeyTakeaways 37

SLEEPINGWITHTHEFRENEMY?ADDITIONALESGBENEFITSAND

CONSIDERATIONS 39

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Barclays|U.S.Thematic

EXECUTIVESUMMARY

ThroughouttheCOVID-19pandemic,consumershavebeeninundatedwiththerisksofco-morbidities,enduredstressandlifestylechangesand,inmanycases,deferredroutinehealthcare.Infact,McKinseyestimatesthat“exacerbationsofcertainchronicandepisodicconditionsthatresultfromdeferredorcanceledtreatment,andnewandworseningbehavioralhealthconditions”couldresultin$125-$200bninincrementalannualcoststotheU.S.healthsystem.Notably,this“shadowcrisis”fallsatopwhatwasalreadyachronicdiseaseepidemicintheU.S.Thatis,headingintothepandemic,sixoutoftenadultsintheU.S.hadachronicdiseasewhilechronicdiseasessuchasheartdisease,cancer,anddiabetesweretheleadingcauseof$3.8tninU.S.healthcarecosts.Assuch,intheaftermathofthepandemic,wewouldnotbesurprisedifthereisagreaterwillingnessonbehalfofconsumerstoengagewithandspendonhealth.Inourview,wherethisincrementalconsumerdemandforenhancedchronicdiseasepreventionand/ormanagementintersectswithdigitalhealthliesapotentialCPGmarketopportunity.

TheU.S.healthcaresystemwasdesignedtohandleacuteproblemsasopposedtochronicissues.Asaresult,althoughmorethan80%ofchronicconditionscouldbeavoidedthroughtheadoptionofhealthylifestylerecommendations,uponleavingaphysician’soffice,apatientislikelylefttofigureoutwhichlifestylechangesarenecessary,howtoincorporatethemintodailyregimens,howtoself-monitortoensuretheiractionsareworking,andhowtoadapttheregimenasneeded.Further,thereisnotarobustmarketinganddistributionchannelwithinthehealthcaresystemfornon-prescriptionmanufacturersandserviceproviderstoaccesspatients,eveniftheyhavecompelling,consumer-friendlysolutionstohelppreventdiseaseand/orcomplementprescribedtreatments.

Digitalhealthcanhelpfillinthegaps.DigitalhealthencompasseseverythingfromhealthITtomobilehealthapps,toconsumertech/wearabledevices,telehealth/telemedicineandpersonalizedmedicine.Notably,manydigitalhealthtoolsandservicescan:

co-existwiththetraditionalhealthcaresystem,insomecasesqualifyingforreimbursement;2)enablecontinuouscareandself-monitoringoutsideofphysicians’offices;and,3)workinteroperablywithotherdigitalhealthservices,therebysupportingthechancesofconsumeradoptionandultimately,ongoinginnovation.Inshort,byleveragingdigitalhealth,consumersatriskoforfacingchronicillnessbenefitfromasingle,connected,data-driven,healthcareapproachthatseamlesslyintegratesintotheireverydaylives.This,inturn,unlocksabiggerroleforpreventionandhyper-personalization.

Althoughdigitalhealthhasmadesignificantstridesoverthepastdecade,itisstillintheearlyinnings.Duringthepandemic,patienthabitshaveshifted,someregulationhaseased(withvaryingduration),andinvestmenthascontinuedtopourin.ButcrackingintotheU.S.healthcaresystemremainsacomplexundertaking.With~290mmpersonsinsured,amassivenetworkofhospitalsandphysicians,andstrictrulesonregulatorycompliance,reachingadigitalhealthutopiaisarguablystillawaysaway.Thatsaid,manydigitalhealthtoolsandservicesaredirecttoconsumerandhavecompellingcash/out-of-pocketcosts.Assuch,drivenbyconsumerdemand,webelievethebroaderdigitalhealthnarrativewillcontinuetopushforward.And,asconsumersincreasinglystepontothedigitalhealthflywheel,itcouldpresentopportunitiesforCPGcompaniestoreachtheminnon-traditional,disruptiveways.

Byourestimate,thisrepresentsanearly$40bnTAMopportunity.Ourthoughtprocessispredicatedonthenotionthatconsumersfindthatthecostofinvestingintheirhealthtodayisfarlowerthantheeconomicplusopportunitycostthatcomeswithlivingwithchronicdiseasetomorrow.Assuch,emboldenedbydigitalhealth,consumerscouldimplicitlydecideto“pullforward”someoftheexpensethattheywouldpotentiallyincuriftheywerediagnosedwithachronicdiseaseandputthatspendagainstnon-prescriptionhealthproductsinthenameofpreventionofdiseaseordiseaseprogression.WerecognizethispoolofspendwouldlikelynotbespentinitsentiretyandnotjustflowtoCPGproducts.However,ifweweretoearmark1/3rdofthe~$40bnmarketopportunityforCPG,itwouldequatetoa~$13bnmarketopportunity–+1.5-2.0ptsoftotalU.S.CPGgrowth,byourmath.

Inthisnote,weexplorefivedifferentwaysCPGcompaniescouldcapitalizeonthisopportunity:1)currentconsumerhealthportfolios,2)renovation&innovation,3)digitalmarketing,4)distribution&partnerships,5)CorporateVentureCapitalandM&A.

ConsumerHealthPortfolios:“ConsumerHealth”spansoverthecounter(OTC)products,vitaminsandsupplements,sportsnutrition,weightmanagementandwellbeing.CPGcompaniesPGandRB.L–andmorerecentlyNESN.Spostits$6bnacquisitionofBountiful-havemajorportfolios,whilemanyCPGcompanieshavestandalonebrandsthatfallwithinthecategory.Asweemergefromthepandemic,theexpectationisthatdemandforconsumerhealthproductsthattreat“l(fā)ifestyleconditions”willsurge.Digitalhealthcanhelpkickintohighgearconsumerawarenessofthesetypesof“l(fā)ifestyleconditions,”howtheycanbetiedtochronicdisease,andconnecttothetypesofproductsthatcanhelp.Butmostimportantly,digitalhealthenablesconsumerhealthcompaniestounderstandaperson’sspecifichealthprofileandprovidehyper-personalizedproducts.

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Barclays|U.S.Thematic

RenovationandInnovation:Oneofthedownstreameffectsofadvancesinmedicalresearch,inourview,isthattheslateofproductsthatareconsideredhealth-orientedcouldbroaden.Therobustdiscourseon“guthealth”isaprimeexample–digitalhealthcanhelpconsumersmaketheconnectionbetweenvariouschronicillnessesandguthealth.Guthealthinturnrelatestoprobiotics,plant-basedfoods,leanproteins,andfiber,tonameafew–productswhichcouldberecommendedifnotdirectlyofferedthroughdigitalhealthplatforms.Connectingtothehealthattributescouldbeamatterofhighlightingwhatisalreadyinherenttoaproduct,suchasfiber(re-positioning),itcouldbeamatterofincorporatingnovelingredients,suchasprobiotics(renovation),oritcouldbecreatingproductsthatareexplicitlyintendedtoaddressthehealthobjective,suchascerealforguthealth(innovation).Itcouldalsomeanhyper-personalizedCPGproductsandleadtothecreationofentirelynewsub-categories.Notably,innovationthatcanengagewithdigitalhealthisnotlimitedtoconsumables.

DigitalMarketing:First,inhelpingpromotehealthawareness,digitalhealthcanleadtoincreasedvolumeofhealth-relatedwebtrafficandincreasedfocusonchronicdiseasepreventionandmanagement.Itcanalsoleadtoanexpandedrangeofhealth-relatedsearchterms(suchas“guthealth”).Second,brandscouldeventuallyadvertisedirectlyondigitalhealthplatforms–muchlikesomenon-prescriptionbrandshavelongadvertisedinthephysicalwaitingroomsofphysicianoffices.Andthird,brandscouldadvertiseonplatformsthatleveragethedigitalhealthecosystembutdonotinteractwithsensitivepatientdata.

PartnershipsandDistribution:Inunlockingpreventioncapabilities,digitalhealthplatformsarepoisedtomakenon-prescriptionproductrecommendations.CPGcompaniescouldpartnerwiththesedigitalhealthcompaniestoensuretheirSKUsareappropriatelydigitallytaggedsothattheypopupasfittingwithinaconsumer’spersonalizednutritionplan,forexample,andarefunneledintoanyonlinegroceryorder.CPGmanufacturerscanalsopartnerdirectlywithconsumertechcompanies.Onthedistributionside,asconsumerslooktodigitalhealthappstohelpachievetheirhealthgoals,theycouldalsopurchaseCPGitemsthroughtheseapps.PhysiciansthemselvescouldalsodistributeCPGproductsthataredigitalhealth-oriented.And,totheextentconsumersusethegrowinglistoftelemedicine,insurance,andonlineprescriptionproviderstoprocuretheirprescriptions,webelievethesecompaniescouldviewtheabilitytoaddoncuratedCPGproductsasawaytoincreasebasketsizeandimprovetransactioneconomics.

CorporateVentureCapital(CVC)andM&A:TherearesomecleardigitalhealthinvestmentswithinCPGcompanies’corporateventureportfolios.SotoohavesomeCPGcompaniesmadeacquisitionsthatleanintodigitalhealth–particularlythosewithaconsumerhealthslant.Thatsaid,inourview,broadlyCPGcompaniesarestillintheveryearlystagesintermsofinvestmentsthatcouldbeconsidereddirectlypartofthedigitalhealthecosystem.Rather,manyCPGcompanieshaverecentlyinvestedinbrandsthatfitsquarelyintoconsumerhealth,orhaveon-trendhealthattributes.Onconsumerhealth,themarketisfragmented,andsowewouldnotbesurprisedtoseemoreactivityinthisspace.Infact,NESN.SandULVR.Larerelativelynewentrantsintotheconsumerhealthspace.Andwithregardtoon-trendbrands,theseinvestmentscouldserveasajumpingoffpointfortappingintothedigitalhealthmarketopportunity.

Againstthisbackdrop,weofferthefollowingtakeaways:

Couldtherebeademocratizationofhyper-personalization?Brandsthatareabletoincorporateconsumers’DNAprofileandotherhealthdataintotheirproductsandservicescouldpotentiallyleapfrogintohyper-personalization.Saiddifferently,abranddoesnotnecessarilyneedtodevelopitsowndatabaseofconsumerprofilesifitcanplug&playwithaDNAtestingcompany.Totheextentdigitalhealthcompaniesfacilitatethesetypesofpartnershipsandthisbecomesthenorm,wewonderifwecouldseeademocratizationofhyper-personalization.

Subscriptionwithoutprescription…Bynatureofbeing“chronic,”productsthatsupportchronicdiseasepreventionandmanagementarewellsuitedforsubscription-basedmodels.Whenpairedwithhyper-personalization,thevaluepropositioncouldbehighlycompellingforconsumers,inourview.Assuch,wewouldnotbesurprisedtoseeCPGcompaniespushinnovationandrenovationthatcanalignwithchronicdiseasepreventionandmanagement,ispersonalized,andcanbedirectshipped.

“Invisible”anklebiters…TotheextentthattheCPGmarketopportunitysourcesfromhealthcarespend(andthusisincrementaltotheoverallCPGuniverse)andbrandswhichtargetthismarketopportunityaredirecttoconsumeroravailableviauntrackeddistributionchannels,thenthesebrands’marketsharegainscouldflyundertheradarofcategoryincumbentsforsometime.Furthertothispoint,whiledigitalhealth-nativeCPGbrandscouldinitiallyfocusonhyper-personalizationtosetthemselvesapart,incollectingmassivequantitiesofdataaroundwhichproductsworkbestforconsumers,thesebrandscouldeventuallyoffermoremainstream(andthuslessexpensive)mass-marketversions.

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Barclays|U.S.Thematic

CouldR&Dbecomethe“new”marketingspend?Buildingoffourlastpoint,wewonderifR&Dbecomesthe“new”marketingspend.Thatis,iftheadmissionfee,sotospeak,forfittingintothedigitalhealthecosystemissomeformofclinicalclaimorbenefit,perhapstheR&Dbehindinnovationandrenovationbecomesamoreprominentaspectofmarketingcommunicationswithconsumers.Inourview,thiswouldnotbetoounlikehowmanyhouseholdproductstoutefficacyandsafetyclaims,orhowK’sRXBarusesitsingredientlistastheentirelabelofitsproductstoemphasizeitssimpleingredients.

Aworldof“haves”and“havemores”?Conversely,wewonderifproductsthatcurrentlyplayinthehealth&wellnessarenacouldfacemorescrutinyand/orbeheldtohigherstandardswhenlookedatthroughapurelyhealthcarelens.Thatis,productscouldbebroadlyperceivedashealthybutmaycontainingredientsthatcouldexacerbatesomehealthconditions.Assuch,ifconsumersbecomeawareofthedrawbacksoftheseingredientsviadigitalhealthplatforms,perhapsthiscouldinfluencepurchasedecisions.

Authenticityiskey…GiventheCPGmarketforthesetypesofproductsisstillinitsinfancy,fromthegetgomanybrandshaveadelicateroletoplay.Ontheonehand,theyarechargedwithmeetingconsumerdemandforefficaciousandeasytoaccesshealth-focusedproducts.Butontheotherhand,theyarechargedwithbringingkeyhealthconcernstotheforefrontofeverydayconversation.Thiscouldwellbeabarriertoentryforbrandswithidentitiesdeeplyrootedinotherprinciples.

Cannewcross-sectionsleadtonewcategories?Ifconsumersshifttowardslookingatproductsastheyrelateto“guthealth,”“mentalhealth,”“skinhealth,”etc.,vs.asproductswithinatraditionalCPGcategory,perhapsitcouldresultinthesecross-sectionsbecomingthenew,defactocategories.Inourview,thiswouldnotbeunlikehowsomeretailershavededicatedaislespaceto“gluten-free,”“keto,”orevenproductscommonlyassociatedwithaspecificregionorculture.

Howfarcan“ConsumerHealth”stretch?Brandsattheintersectionofconsumerstaplesandconsumerhealthtendtogrowfasterthantheirmass-marketcounterparts.Totheextentconsumerhealthisviewedasakeygrowthcategory,wewouldnotbesurprisedifbrandsmoreovertlyemphasizetheirconsumerhealthcredentials,whichinsomecasesmaybeafewdegreesawayfromtoday’sstandard.

Scalecouldprevail…EstablishedCPGmanufacturerscouldhaveanadvantageincapitalizingonthismarketopportunity.Theyhavemadesignificantdigitalinvestmentsinrecentyears,haverobustR&Dbudgets,andtheinfrastructureandfinancialwherewithaltoestablishnewpartnerships,tapintonewdistributionchannels,andfurtherinvestinpilotprojectsandcapabilities.But,eveniftheyareinpoleposition,thereisalearningcurve.Assuch,againstthebackdropofarapidlydevelopingdigitalhealthecosystem,wewouldexpectthelandscapetobefragmentedbeforeaslateofkeyleadersemerges.

ESG:Sleepingwiththefrenemy?

Ifstoppingdiseasebeforeitstartsistheholygrail,inthemeantime,otherbenefitscouldinclude:

Improvedmedicaldiagnoses(leveragingAItoconnectmultipledatapointsandsupplementclinicalassessments)

Enhancedtreatmentprotocols(leveragingbigdatatoseewhatisworkingforagivenpopulation)

Personalizedmedicine(treatmentsbasedonindividuals’digitalhealthdata)

Enhanceddrugdiscoverycapabilities(bigdatacanalsobeleveragedinthedevelopmentofpharmaceuticaldrugs)

Empoweringconsumers/patientswithmoreinformationsotheycantakeamoreactiveroleintheirhealth

Butitisnotclearcut,inourview,thattrackingone’sbiologicaldataalldayeveryday(evenwhilesleeping)leadstounequivocallypositiveoutcomesatasocietallevel.Keyconsiderationscouldinclude:

Datacouldbemisinterpretedbypatients(clinical/healthdataisnotnecessarilyblackandwhite)

Over-testingcouldleadtoover-treatment(reportsindicate21%ofmedicalcareisunnecessary,withover-treatmentresponsibleforatleast$210bnincostsperyear)

Algorithmscanhavebias(thiscanbeexacerbatedonabiggerscaleandhavedireconsequencesinahealthcaresetting)

Datacouldbeusedinappropriatelyand/ortoexcludecertainindividualsfromaccesstoservices.Oncedataisintheether,sotospeak,itcanbedifficulttoensureitisalwaysusedinthebestinterestoftheindividualswhoprovidedit

Unauthorizedaccesstodatacouldbeasecurityissue.FormerDirectoroftheUnitedStatesNationalCounterintelligenceandSecurityCenterBillEvaninahasstatedhealthdatacanbeusedto“systematicallyeliminateourhealthcareservices”

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2,3,4

Barclays|U.S.Thematic

CONSUMERIZATIONOFHEALTHCARE+CHRONICDISEASECONUNDRUM=DIGITALHEALTHOPPORTUNITY

ConsumerizationofHealthcare

Generallyspeaking,whenapersonhasahealthissueintheU.S.,he/sheentersahealthcaresystemforwhichpricingofservicesisunknown,whatserviceswillbeadministeredisunknown,howmuchofthecostofservicesreceived(fromphysicianvisitstoimaging&labworktoprescriptions)willultimatelybereimbursedbyinsurancecompaniesisunclear,andwhetherornotthehealthissuecanevenberesolved.Thisdilemmaisamplifiedwhenitinvolvesin-patientcareorchronicillness.Notably,asof2019,onaverage,familieswithemployer-basedhealthcareinsurancecoveragewerespendingalargerproportionoftheirincome(8%)onhealthcarethantheywereinthemid-1980s(5%)–atrendmagnifiedinlowerincomepopulations(14%).1Notsurprisinglythen,consumershaveincreasinglysoughtwaystohedgetheirexposuretohighhealthcarecostswhilemaximizingtheirROI,sotospeak.Thisrangesfromchoosinghealthcareplansthatcatermorespecificallytotheirsituation,toshoppingaroundforservices,toforgoingsomeaspectsoftreatmententirely.

Partandparcelwiththistrend,consumersaremoreopentotakingaholisticapproachtomanagingtheirhealth.Toillustratethisshiftwepointtonationalsurveys(conductedbytheNationalCenterforHealthStatistics,partoftheCDC)ontheusageofcomplementaryalternativemedicine–everythingfromsupplementstochiropracticmanipulationtoyoga&meditation.Thoughtherearesomediscrepanciesastowhatisconsideredcomplementaryalternativemedicine(CAM)acrossthesurveysandovertime,broadlyresearcherssuggestthatafterariseinCAMusebetween1990and1997,“interestinanduseofcomplementaryhealthapproacheshasremainedconstantinrecentyearsinadultsandchildren…onethirdoftheadultpopulationand12%ofchildrenhaveusedatleastoneCAMtherapy.”

Notably,thistrendissupportedbyongoingresourcesandresearchdirectedtowardsunderstandingthebenefitsofaholistichealthcareapproach.Tothispoint,wewouldhighlighta2015articleinTheAtlanticinwhichjournalistJennieRothenbergGritztracesalternativemedicine’spathtobecomingmainstream.Shenotes:“Thereare50institutionsaroundthecountrythathaveintegrativeintheirname,atplaceslikeHarvard,Stanford,Duke,andtheMayoClinic.Mostofthemoffertreatmentslikeacupuncture,massage,andnutritioncounseling,alongwiththeconventionaldrugsandsurgery.”5

“Backinthe1990s,Iwasputtingin750stentsayear…[Then,workingwithDr.DeanOrnish]wetookverysickheartpatientsandtaughtthemyogaandmeditation,changedtheirdiet,puttheminsupportgroups,andgotthemexercising.Andwestartedtoseea91percentreductioninchestpain.Wewereactuallyabletoreverseplaqueinpeople’sarteries.”

Dr.ErminiaGuarneri,interventionalcardiologistandfounderoftheScrippsCenterforIntegrativeMedicine,20156

Meanwhile,technologyhasopenedupanewworldofhealthcareeducationforconsumersandpatients,shapinghowupandcominggenerationsapproachhealth.GenX(birthyears1961through1981)isthefirstgenerationto“growupintheInternet-availablehealth

PetersonKFF,Howaffordabilityofhealthcarevariesbyincomeamongpeoplewithemployercoverage,2019

AmericanJournalofPreventativeMedicine,DiseasePreventionandHealthPromotion:HowIntegrativeMedicineFits,2015

JournaloftheAmericanMedicalAssociation,TrendsinAlternativeMedicineUseintheUnitedStates,1990-1997,1998

NationalHealthStatisticsReport,TrendsintheUseofComplementaryHealthApproachesAmongAdults:UnitedStates,2002–2012,2015

TheAtlantic,TheEvolutionofAlternativeMedicine,2015

TheAtlantic,TheEvolutionofAlternativeMedicine,2015

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Barclays|U.S.Thematic

informationage”andexperiencedirect-to-consumerpharmaceuticaladvertising.7Theyarecharacterizedasmore“skeptical”ofthehealthcaresystemthanthegenerationsthatprecededthem,whichmotivatesthemtolooktoavarietyofsourcesformedicalinformation.8Meanwhile,Millennials(birthyears1982through2000)notonlygrewupwiththeinternet,butearlyonwerealsoexposedtosocialmedia.Assuch,researchersnotethatMillennials’“easewithandrelianceontechnology…h(huán)asgrantedthemunprecedentedaccesstohealth-relatedinformation”andledto“theirquickadoptionofhealth-relatedtechnologysuchasfitnesstrackersandhealthcareapps.”9RoughlythirtyyearsafterGenXcameontothescene,theGenZgeneration(looselydefinedasbirthyearsfromthemid-1990stothemid-aughts)isfullydigitallynative,heavilyreliantontechnology,withahighinterestinwearablesandlikelihoodtoself-monitorhealthreports.10Notably,GenZismoredissatisfiedwithvariousaspectsoftraditionalhealthcareservicesthanprecedinggenerations,whichwebelievecanpartlybeattributedtogrowingupwiththeconvenienceoftechnology.11,12Whilethesedescriptionsarehigh-levelgeneralizations,inourview,theyspeaktoalong-termtrendofconsumerwillingnesstoleveragetechnologyinhealthcaremanagement.

Thenetofthesethreetrendsiscapturedbytheterm“theconsumerizationofhealthcare.”Thatis,todayconsumersaremorewillingtoquestionthehealthcaresystemandchallengethestatusquo.Indoingso,theylooktountraditionalsourcestohelpmanagetheirhealthcareandincreasinglyviewcertainaspectsofhealthcarelessascommoditiesandmoreasconsumerproducts.InmanywaystheU.S.