The Consumerism Trend in Healthcare
September 2013
Contents Executive Summary............................................................................................................................3 Overview ...........................................................................................................................................4 Major Factors Leading to The Consumerism Trend in Healthcare .........................................................5 Healthcare in a Changing Marketplace – Stakeholder Efforts ...............................................................6 Challenges with Consumerism in Healthcare .......................................................................................7 Outlook .............................................................................................................................................7 References.........................................................................................................................................8
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Executive Summary Rising cost of healthcare followed by major regulatory reforms like the Affordable Care Act (ACA) has driven consumerism in healthcare in the US. The Congressional Budget Office estimates that within 10 years the health insurance market will swell by 33 million people who would otherwise be uninsured. Greater options and transparency through legislation, greater accountability with payors, and provider activities to offer consumer-driven care have been boosting the consumerism trend. The trend is catching up and has opened up opportunities for all stakeholders in the industry to redefine their approach in connecting with consumers and gaining a market share. Payors like Aetna have adopted retail-like strategy by partnering with retailers and Humana have offered consumers to evaluate health plans, physicians and hospitals. Providers like Tufts Medical Center have engaged consumers to offer online medical help and Baptist Health Paducah have offered preventive healthcare services. Other healthcare industry stakeholders like RedBrick Health have partnered with ClearCost Health in their quest to offer consumers solutions in managing healthcare costs and HealthSparq have collaborated with MDLive to provide round-the-clock telehealth services. On the flip side, consumerism in healthcare can also put a lot of pressure on patients, who by being hyper-informed at times while dealing with a medical crisis may not able to take a right decision related to healthcare. Healthcare industry stakeholders need to continue this trend of consumerism by engaging consumers. Information technology has and will further prove to be the platform supporting the trend of consumerism in healthcare with mhealth, telehealth and online platforms for comparing health plans and provider services.
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Overview The healthcare industry has lagged behind in adopting consumerism, unlike the retail and financial services industry that have engaged in consumer empowerment with a view of offering products and services with high quality and at best prices. The recent emergence of the consumerism trend in the US healthcare industry is a result of the rising cost of healthcare and regulatory reforms targeted at increasing healthcare access to millions of uninsured population in the US. The early stages of consumerism in healthcare began with the Consumer Driven Health Plans (CDHPs), which allow consumers to manage their own healthcare costs. CDHPs helped control healthcare costs inflation for a period, reduced unnecessary spending and cut much of the waste in the healthcare system. These plans are the fastest growing of any plan type in the US today. Over 30% of large employers now offer a CDHP, and over 13.5 million members have a health savings account. A study from Cigna analyzed the health behavior of employees enrolled in CDHPs, and discovered that enrollees decreased their costs at an average of 13% compared to individuals enrolled in traditional HMO and PPO plans. Now the Affordable Care Act (ACA) offers a variety of tax incentives, subsidies and mandates intended to bring millions of uninsured US citizens under the healthcare umbrella. The ACA requires all individuals not covered by an employer-sponsored health plan, Medicaid, Medicare or other public insurance program to buy a private insurance policy or pay a penalty (with some exceptions based on religion or financial hardship). The Congressional Budget Office estimates that within 10 years the health insurance market will grow by 33 million people who would otherwise be uninsured. After years of selling health plans to employers, payors need to focus on selling health plans to individuals, especially with the opportunity to cover the vast uninsured population. Thus, there is a need to adopt new business models that are customer-centric. Providers also need to improve patient relations and become more customer focused. Other stakeholders in the healthcare industry, including technology solution providers, can come up with innovative products and services to enhance consumerism in healthcare.
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Major Factors Leading to The Consumerism Trend in Healthcare
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Healthcare in a Changing Marketplace – Stakeholder Efforts Payor Efforts Payors are adopting retail-like customer segmentation practices. They are looking to develop consumer profiles around the patients’ health habits and preferences to engage the latter and offer targeted products to build consumer confidence and lifelong loyalty. They are also employing customer relationship management tools and focusing on selling individualized plans in storefronts by conducting direct consumer interaction and offering wellness programs. Some examples of payor initiatives in adopting the consumer-driven model in healthcare are as follows: In 2012, Aetna partnered with Costco, a major warehouse retailer under the Costco Personal Health Insurance program, to sell five health plans with major medical benefits and dental coverage, across several states in the US. Earlier in the same year, Aetna joined Chicago-area Best Buy stores for a pilot program to sell online wellness programs in the retailer's health technology department. Humana’s Compare Hospitals tool lets members gauge hospitals on their outcomes, processes, and safety practices. Members in certain markets can even review estimated costs for specific treatments at each hospital – including doctor’s fees, facility fees, etc. Provider Efforts To this trend of consumerism in healthcare, hospitals have responded by expanding the range of services they offer – including ambulatory care, primary and preventive health, home health care, nursing facilities and also alternative therapies. They also provide consumers health information through websites, bulletins and pamphlets, and outreach and other educational programs. As providers are considering patient care outcome risks, they are engaging members holistically to manage healthcare costs, patient experience and care outcomes. To this end, hospitals have collaborated with physicians and formed ACOs to manage population health by the use of tools and solutions to support committed care management and care coordination efforts. Some examples of provider activities offering consumer-driven outcomes are as follows: In a bid to differentiate itself from other hospitals in Boston and rebrand as Tufts Medical Center, TuftsNew England Medical Center conducted a rebranding campaign with the help of PARTNERS+simons, a Boston-based brand communications agency, in 2010. The team focused on the role of the patient in the healthcare experience and launched Tufts Medical Center.tv on the internet, with videos of Tufts Medical Center clinicians talking about specific conditions. The videos made patients feel as if they are having one-on-one with a doctor, in the privacy of their own home. In the two years of its launch, the website has got over 300,000 unique visitors. Companies like Life Line Screening form partnerships with hospitals, making people aware of unrecognized health problems and encourage them to seek follow-up care with their physicians. In 2013, Baptist Health Paducah and Life Line Screening have partnered to find vascular disease and other conditions that can be treated before they become life-threatening.
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Beyond Payors and Providers Apart from payors and providers, a range of other stakeholders in the healthcare industry have introduced innovative products and services for facilitating the trend of consumerism in healthcare. Some examples of these stakeholders are: Companies like RedBrick Health, a leader in the healthcare engagement technology, are developing innovative solutions to reward consumers by connecting healthy behaviors to financial incentives that have a meaningful and direct impact on out-of-pocket health insurance expenses. In 2013, RedBrick Health and ClearCost Health, an innovator in health care price transparency, announced to collaborate and create a first-of-its-kind integrated offering built to provide solutions for two of the biggest challenges to control health care costs, i.e. unhealthy behaviors and hindrance to shop for medical care based on price, quality, and convenience. They are to create a platform that will be the industry’s first comprehensive service, allowing consumers to be healthy and make smart purchase decisions. In 2013, HealthSparq, a provider of health care transparency solutions for health insurers, announced its partnership with MDLive, a leading telehealth provider to the nation’s largest telehealth network, to offer innovative ways to develop healthcare consumerism. The companies will work together to offer telehealth services to employers across the nation. They are offering 24/7/365 access to online video or phone conversations with a board certified doctor, which is the core of the telehealth service as a provider of online and on-demand health care delivery services.
Challenges with Consumerism in Healthcare Consumerism in healthcare, which at times treats patients as consumers, often requires a high level of involvement from the consumers. Patients are asked to take increasingly complex decisions and encounter ever-increasing amounts of information, making them hyper-informed and take control of their care. The patients need to decide on their own as when to see a doctor and for what kind of conditions, and what sort of provider they need – a specialist or primary-care physician, which may not necessarily be the right decisions and serve their best interests. Also, there are some issues with the patient medical record privacy where a patient, burdened with a medical crisis, may be asked to control the information flow.
Outlook Despite all the challenges, payors, providers and the other stakeholders in the healthcare industry are required to continue their efforts in strengthening the consumerism trend, both by collaboration and on their own, given the benefits it is going to bring to all the involved parties. Consumer engagement is one of the major areas of focus, where consumers should not only be offered with innovative products and services but also be educated and trained on making the optimum use of the solutions offered. The use of the information technology would be of prime importance in the advancement of the consumerism trend – online platform comparison of health plans and provider services, mhealth and telehealth would be leading the way forward.
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References •
Employee Benefit News
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Becker’s Hospital Review
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Humana
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Health Leaders Media
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www.money.msn.com
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www.ct.gov
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www.boston.com
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www.hcmatters.com
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www.theihcc.com
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HBR
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