Research Memo: Parsley Health
Chronic illness, women’s health, and Telehealth are all growing segments within the healthcare market. Parsley Health sits at the center of this opportunity with its comprehensive care offerings.
By Derin Arpacioglu, Emma Chen, Adrian Lazzi, Andrew Paternostro, Kirsten Real, and Chloe Tse. Edited by Kevin Xu.
Intro
US annual spending on chronic illnesses totals $3.15 trillion, accounting for over 75% of its total healthcare expenditure. With an aging population and a growing interest among even younger generations to prioritize health and wellness, there is a massive demand to provide a holistic approach to healthcare.
Parsley Health addresses this need by providing virtual primary care, chronic condition management, and preventative care, with a particular focus on women’s health. This sector-specific focus and long-term approach to health management is a unique value proposition that differentiates Parsley Health from its competitors.
Team and Founding Story
Parsley Health may seem like the quintessential post-pandemic startup with its emphasis on telehealth and holistic, preventive care. However, the company actually has its origins back in 2016. Parsley Health was founded by Dr. Robin Berzin, MD, a Columbia-trained physician, author, digital health expert, and functional medicine leader. She was also a repeat founder, her first startup being a physician communication app called Cureatr. During Dr. Berzin’s years as a physician, she was struck by the impersonal healthcare system where visits were brief and doctors were focused on treating symptoms rather than the root causes, which led her to found Parsley Health.
Parsley’s initial focus was on providing functional, holistic care through brick-and-mortar locations in New York City, Los Angeles, and San Francisco. Though she did begin developing her telehealth platform, demand for those services did not take off until the pandemic, when she saw a huge shift in her revenue streams. The San Francisco location eventually closed, the telehealth network expanded across the US, and Parsley is now in-network in New York and California today.
“I started Parsley Health because I saw how broken healthcare is today. We are making ourselves sick as a population, through how we eat, move, and live, while traditional medicine layers on more pills, waiting for us to get sicker. ”
Dr. Robin Berzin
Product
Parsley Health offers a “one-stop shop” that uses a holistic approach to guide patients toward a life of sustained health, particularly for those with chronic conditions. Parsley considers a patient’s environment and genetics, factoring in their predisposition for certain conditions. With this information, Parsley helps patients both address current symptoms and build habits to prevent the onset of future disease.
Their service consists of five main features:
- Expert-led care
- Access to advanced diagnostic testing
- Personalized healthcare plans
- Lifestyle coaching
- Continuous support beyond appointments
Parsley offers virtual care to all US residents. Customers near LA and NYC can also visit Parsley’s in-person centers in those two cities. Parsley has a team of over 200 skilled doctors and employees to perform core clinical functions — just as you would find in a clinic or hospital. They are in-network with select major insurance plans in New York and California, which now cover 10M+ individuals.
Market
Parsley Health services provide value primarily to these customers:
- Individuals experiencing chronic illnesses or persistent symptoms (autoimmune, digestive, hormonal, metabolic, and fertility health)
- Women and their families, who balance hectic schedules or have difficulty scheduling multiple in-person doctor’s appointments.
- Health-conscious individuals and wellness enthusiasts who are interested in lifestyle improvements and optimizations
As mentioned, chronic illnesses account for the vast majority of total healthcare spending. Longer lifespans, novel therapeutics, and a growing emphasis on health and wellness in recent years will likely increase spending. For these reasons, the chronic illnesses market is expected to grow at a CAGR of 11.8%.
Parsley Health’s focus on women’s health allows it to capture a large yet underserved market. Women represent a significant portion of healthcare consumers. For working-age adults, per-person healthcare spending is 20% more for women than for men, with 18% of it being non-maternity related. Moreover, women face significantly higher risks for hormonal and autoimmune conditions, chronic disease areas suited for functional medicine. Parsley focuses on these specific needs to serve its female patients.
Parsley’s focus on Telehealth also reflects greater market trends. The market size for Telehealth is expected to increase at a CAGR of 24.3%, though future growth may be challenging to predict after unusual circumstances after the pandemic. Usage of telemedicine has also increased. According to the Census Bureau Household Pulse Survey, telehealth utilization remained above pre-pandemic levels at around 22% in 2021. Increasing public acceptance of virtual modes of care is a major tailwind for Parsley.
Competition
The Health-tech space is quite saturated with many private, VC-backed companies providing online healthcare services. Some examples of this include:
- Ro: a direct-to-consumer Telehealth platform designed to handle processes such as diagnosis to medication delivery
- Forward: an operator of a primary care clinic intended to integrate advanced technology with personalized patient care
- Vida Health: a developer of a virtual care platform designed to treat a person’s whole health by treating mental and physical conditions together
There are several niches that Parsley Health primarily operates in, including chronic health, Telehealth, and women’s health. Each of these verticals alone has dozens of players, and the combination of interests forms a complex competitive landscape surrounding Parsley. However, Parsley’s focus on proactive healthcare, autoimmune diseases, and mental health issues may serve to differentiate from others in the digital health, clinic/outpatient services, and health-tech industries.
Business Model
Parsley has a subscription-based revenue model. They sell memberships to both individuals and employers. Individuals can pay an annual membership of $2,189 upfront or monthly installments of $199 over 12 months (sums to $2,388 annually). For individuals with in-network coverage by insurance, the annual subscription is around $760. The pricing for employers is not publicly disclosed.
In addition to membership subscriptions, Parsley has a store selling its own branded supplements. Products are priced at $30–70/container, and members get a 20% discount.
Valuation
Parsley Health has raised a total of more than $143 million in funding to date. After their founding in 2016, they have successfully raised capital almost every year in order to grow their business. As a reflection of their growth, their valuation has also grown to $311M after their C3 round in July 2023. Notable investors include Sand Hill Angels, White Star Capital, Kinnevic, and TMV.
Key Opportunities
Increasing Demand for Chronic Illness Treatment
As healthcare costs for chronic illnesses continue to increase, there will be greater demand and greater value provided by addressing chronic illnesses early and effectively through functional medicine. Parsley’s emphasis on preventative care will lead to long-term savings for patients and by extension insurers and employers, thereby driving its growth.
Telehealth Adoption and Physician Shortages
COVID’s increased public awareness and acceptance of telemedicine. The convenience offered by telehealth practices including Parsley has garnered a large customer base. Furthermore, telemedicine adoption is also a potential solution for the physician shortage crisis, because telemedicine allows doctors to not only see more patients but also reach unmet patient demand in disparate locations.
Key Risks
Reversal in Telehealth Popularity Post-Pandemic
The COVID-19 pandemic led to an unprecedented surge in Telehealth adoption due to an increase in healthcare demands and the need for social distancing and remote healthcare access. However, this change in patient behavior was driven by necessity rather than preference. According to a report by Epic Research, “Telehealth use encompassed less than 1 percent of all visits in the last three quarters of 2019. This figure jumped to 31.2 percent in Q2 2020 before dropping to 5.8 percent in Q3 2023.” Many patients believe in-person interaction makes a considerable difference to the quality of the care received, which may lead to decreased demand.
Market Saturation and Competition
As mentioned above, the Telehealth industry boomed during the pandemic, showing a very rapid and large initial growth. Due to such rapid growth, the industry has seen a surge in competition–- both established healthcare providers expanding into Telehealth and new start-ups offering innovative solutions. Larger healthcare organizations or established Telehealth companies often possess greater resources, including financial backing, established customer bases, brand recognition, and extensive networks of healthcare providers. Therefore, such organizations may have an advantage over newcomers breaking into the sector.
High Switching Costs
Changing healthcare providers is also often a stressful, complex task for consumers, and patients often stay with the same doctor for years at a time. As such, there are immense switching costs that may stand to challenge Parsley Health’s initial growth (though this may serve as its strength in protecting its long-term positioning)
Summary
Chronic illness, women’s health, and Telehealth are all growing segments within the healthcare market. Parsley Health sits at the center of this opportunity with its comprehensive care offerings. Parsley’s success has been driven by its ability to evolve during the COVID-19 pandemic and a growing demand for preventative care. Although it also faces headwinds of waning Telehealth popularity and high switching costs in a competitive market, Parsley represents a new force of innovation now entering the healthcare industry, with the potential to enhance care for patients.
