Health is wealth

A multi-stakeholder collaboration can help companies to make healthy living initiatives an integral part of brand differentiation

Healthy living is no longer limited to the style section of newspapers. It is front page news. Consider this: Over 60 per cent of all deaths worldwide result from largely preventable non-communicable diseases (NCD) like cancer, cardiovascular disease and diabetes - the figure for India was 53 per cent in 2008, according to WHO. India has over 60 million people affected by diabetes; the number is set to rise to 100 million by 2030. Experts estimate a loss of up to five per cent of global GDP in 2030 due to premature death and disabilities caused by NCD. India is facing the brunt of this challenge with treatment cost over seven times that of infectious diseases. The bill for the government from NCD is expected to touch $2.3 trillion over the next 17 years.

A report by the World Economic Forum and Bain launched earlier this year, called 'Multistakeholder collaboration for healthy living: Toolkit for joint action', illustrates the depth of this problem and provides a framework for solutions that already exist but need greater attention.

This is an area where businesses have a major role to play. We are not talking just about the healthcare sector. Even if you are in the business of packaged foods, soft drinks or shoes, this is a matter of economic survival. The public and governments are demanding change. In 2011, the Delhi high court ordered the government to take "effective steps" to stop the sale of junk food in schools.

Increasingly, businesses will survive if they can deliver a product that not only fills the stomach, increases physical activity or treats a disease, but makes the consumer healthier. Some industry leaders are already taking action by addressing three areas: changes in markets due to new regulations and public pressure; investments in initiatives that distinguish their brands; and new opportunities to develop and accelerate demand for healthy living products and services.

Since 2005, General Mills has improved the nutrition profile of almost 70 per cent of its US retail volume through whole grain and sugar reduction initiatives. Last year, Indian regulators announced plans for stricter standards for permissible limits of sugar, salt and fat content in vanaspati. The Budget this year included an excise duty hike of 18 per cent on cigarettes.

Given this backdrop, India's healthcare system is giving rise to a unique opportunity that rewards and incentivises early diagnostic and healthcare interventions. This will guarantee a better return on investment for a sustainable future.

Differentiate on protecting consumers' health
Investing in internal and external healthy living initiatives is an integral part of brand differentiation. For instance, insurance companies must see the opportunity to transform themselves into health promotion companies to remain competitive. Discovery, a South Africa-based financial services and health insurance company, pioneered a consumer-focused health insurance product, Vitality, which offered to pay customers for healthy behaviour. Vitality provides low-cost access to gyms and discounts on healthy food, and rewards like discounts on holidays and consumer products for healthy lifestyle. For highly engaged members, hospital admission rates were 7.4 per cent lower for cardiovascular disease and 13.2 per cent for cancer.

Opportunities differ by industry but the key to responding effectively to these investment opportunities is multi-stakeholder participation and action. In India, Nokia collaborated with a US-based non-profit organisation to launch an SMS-based diabetes prevention programme. Its business model is based on offering alerts twice a week for free for the first six months. After that, it charges a nominal fee.

A 2010 study at the University of Washington ranked India as the worst performing country on its citizens' health. The need for a healthy population and workforce has never been more urgent.

As a business, how well are you positioned to address these changes? Can you readily list your most attractive healthy living growth opportunities? Do you have a vision for how healthy living will shape your market and workforce? Are you clear about what capabilities you need to build? Do you have a comprehensive programme that you can evaluate? The answers will make for front page news tomorrow.

Norbert Hueltenschmidt
head, Global Healthcare practice, Bain & Company

Dinkar Ayilavarapu
principal, Bain & Company, new Delhi

Karan Singh
head, Healthcare practice, Asia-Pacific, Bain & Company