Consumers have become empowered over the last decade with the proliferation of mobile devices and exponential internet growth, which has provided unprecedented access to information. This has resulted in consumers being able to research information real-time and make immediate product comparisons on elements such as price, quality, convenience and customer satisfaction before making purchases. Consumerism has been slow to penetrate the healthcare industry, but we are now seeing that shift occurring.
The healthcare sector typically lags other industries with technology adoption trends. The current reality of patient experience within healthcare often consists of these scenarios:
• Patients spend time traveling to different medical locations when managing a health condition because of their health insurance plan’s restricted network of provider or facility access
• Schedule availability of providers determines appointment time rather than patient availability
• A complex health insurance financial model resulting in patient out-of-pocket responsibility for care that most patients do not understand
• The cost of the care received is still largely based on encounters vs. quality of care
• Faxes are still heavily utilized to exchange medical records for care coordination after the government has spent $38 billion requiring doctors and hospitals to install electronic health record systems
• Misaligned incentives of payors with providers and patients
If we compare those realities to interactions we have as consumers in other parts of our life, our expectations would be different. Technology is enabling new options to bridge that gap and empower consumers to be more engaged in their health and the methods they use to monitor and interact with providers for care.
One of the unique elements of the healthcare sector is that consumers of healthcare services are not the direct purchaser of the goods and services. Health insurance companies are the predominant non-government purchaser of healthcare goods and services from hospitals and providers. Health insurance literacy is low among consumers, which makes it difficult for them to understand the linkage of their insurance plan to the access they will have to medical facilities they want to utilize and the total out-of-pocket cost that will be incurred for different care scenarios. Consumers often focus on the out-of-pocket deductible for wellness visits rather than the cost of a catastrophic accident or managing a chronic illness. This is one of the primary reasons for the spike in popularity of the high-deductible health plans. The financial burden of medical care, which is often a surprise for consumers, results in many Americans struggling to pay even $500 in bills. This challenge is further exhibited by medical bills being the number one reason cited for bankruptcy filings in the U.S.
Consumerism will continue to push healthcare toward a free enterprise marketplace and begin to reflect the overall value transparency that is increasingly linked to utilization. This type of transformational shift incorporates personal accountability, which would naturally move consumer focus to preventive care and wellness versus the current reactive state of sick care. Non-traditional entrants, such as Amazon, Google and WalMart, will have the opportunity and ability to disrupt the long-established healthcare delivery structure.
Focusing on the opportunities to improve the economics around patients accessing care, Amazon is well positioned to bring new modes of competition into the marketplace. They have over 300 million members and a platform that can scale without the limitations of legacy systems and overhead that existing health insurance companies and hospitals may be burdened with. Employer self-insured programs are also increasing, and they are looking for innovative approaches to support wellness within their workforce, which will result in a healthier population and lower overall cost of care.
It is easy to envision a future where individuals shop for healthcare in the same manner they do for personal household goods on Amazon. Utilization of data from wellness applications on an individual’s mobile device and other digital data sources could influence the recommendations of the types of services, cost and frequency to ensure patients are supported by a comprehensive health program that drives better outcomes. A linkage of cost to the utilization of healthcare services will encourage individuals to adopt wellness programs and be pro-active about seeking treatment before conditions advance. The ability to select providers based on convenience factors, customer satisfaction ratings, cost and other relevant criteria online that is valued by the patient would enable real-time access to care based on consumer preferences. This model could be augmented with health insurance providing stop-loss coverage to enable consumers to continue to be covered if a significant unplanned illness or a catastrophic event occurred.
Our healthcare delivery system is complex, and there are many challenges with change. All patients and clinical scenarios would not benefit from a utilization model, but it is likely that the healthcare payment ecosystem will begin to present more of these options. It would be beneficial for organizations to ideate the shifts need to make to compete with a disruptive new entrant, such as Amazon, to the market. The consumer pressures are too strong for the healthcare sector to continue to operate as is, which will result in new non-traditional market competitors.
