Healthcare Consumerization is Here to Stay

Evidence of the accelerating trend toward the true consumerization of healthcare

Patient-centered care.  Consumer experience.  Patient engagement.  Transparency.  These now-familiar buzzwords reflect the movement toward consumerization in healthcare over the last decade.

Consumerization, which involves product and service designs and offerings oriented towards the consumer experience, has been occurring in industries from telecommunications and banking to photography and travel.  The internet age has led to technology disruptors (Apple, Uber, Airbnb) that have driven change in consumer expectations across all industries.

What does this mean for healthcare?  Consumerism in healthcare means that patients are no longer passive recipients of care. They are empowered to take ownership of their health, acting more like customers who can shop around for healthcare options – evaluating cost and quality and choosing based on their personal preferences.  With the latest technologies, they now have their health data literally at their fingertips, which allows them to be proactive in their own care.

While regulation and complexity within the healthcare market have slowed the pace of consumerization in the past, a shift has taken place in 2018.

Healthcare model disruption

The shift to a consumer-centric healthcare model has resulted in the development of new care delivery models, such as urgent care, retail clinics, telehealth, and on-demand care.

Vertical integration is increasingly blurring the lines between traditionally separate areas of the industry, as payers acquire physician groups, hospitals set up health plans, and pharmacies make deals with health insurers.  Just this March, shareholders approved CVS Health’s proposed acquisition of Aetna, which is now awaiting government approval.  This deal has set off a chain reaction of announcements of potential mergers and acquisitions within the industry.

For the past several years, Amazon has been eyeing ways to revolutionize the delivery of healthcare. In 2018, it appears to have jumped in with both feet.  Among other widely publicized ventures, Amazon is reportedly experimenting with the hospital supply chain and working on a pilot project to provide medical products and services to patients after they’re discharged from the hospital.  In June, the company announced a $1 billion acquisition of the online pharmacy PillPack.

Few companies understand how to engage consumers better than Amazon.  With a formidable track record of disrupting major industries, these recent moves are forcing major healthcare stakeholders to take notice.

Patient access and control of personal health information

Patients, as consumers of healthcare, want to be in control of their own health information and transactions.  A recent report by NTT DATA Services revealed that consumers expect the digital customer experience for healthcare transactions, such as filling prescriptions and making doctor appointments, to be similar to major online retailers like Amazon, Apple and Southwest Airlines.  In fact, 50 percent of respondents said they would change physicians to get a better online healthcare experience.

Digital innovation, via wearables, digital platforms and telemedicine, is finding its way to broader adoption and transforming patients into empowered consumers.  Earlier this year, Apple announced an upgrade to its Health app that allows patients at over 65 large health systems to access their EMR data on an iPhone or iPad . In June, Apple opened the Health Records API to developers. According to Jeff Williams, Apple’s COO, this means that “consumers can personalize their health needs with the apps they use every day“.

Patient payment flexibility

Billing is no longer a business-to-business transaction between providers and insurers.  Patients are responsible for an increasing portion of the healthcare bill, and they expect the same transparency from healthcare as from their other buying experiences.

A recent HIMSS Analytics survey found that most providers still send paper statements, yet over half of patients prefer to receive and pay their healthcare bill electronically.  Not surprisingly, investors are pouring money into startups, like Simplee and Patientco,  that provide payment platforms with intuitive interfaces and flexible payment options.

Innovations by self-insured employers

The trend towards employers aligning with insurers or contracting directly with providers to give employees more care options and personalized care experiences appears to be picking up steam.  A few recent examples:

  • Whole Foods bypassed insurance companies to partner with Adventist Health to deliver a tailored healthcare plan to its employees in Southern California.
  • Bind, a Minneapolis-based start-up, sells “on-demand” health insurance plans to employers, which allows members to pay for certain services only when needed.
  • In an employer-purchased care agreement, University Hospitals Cleveland Medical Center will provide joint replacement surgery and orthopedic care for Walmart employees and their families.

To top it off, Dr. Atul Gawande was appointed in June to lead Amazon, JP Morgan and Berkshire Hathaway’s new venture aimed at improving healthcare delivery and reducing costs for their employees.  The commitment of these three huge organizations and their powerful and well-regarded CEOs is another sign that healthcare consumerization is here to stay.

It’s 2018. Do you know where your disconnected patients are?

How provider organizations can find and reconnect with patients who have fallen out of their care.

To succeed in a healthcare system intent on shifting from a transactional, volume based model to a more value-based, longitudinal approach, providers are adapting their practices to accept alternative payment models and engage patients in proactive health management. One problem with this approach is that they are still missing a critical subsection of patients – those that are not engaged with the system at all. We call these “disconnected patients.”

Who is the disconnected patient?

  • Lost touch – The ones who have lost contact with their providers, or who are no longer able to or interested in visiting their provider on a regular basis, which means there is no ongoing relationship with a primary care physician. The Kaiser Family Foundation 2013-15 survey results estimates that 17% of women and 28% of men did not have a primary care physician, and many of these reported they were in poor health.
  • Effectively homebound – The ones unable to visit a physician due to financial, health or socio-economic reasons, like poor access to nutrition, housing or transportation. Patients in poor health who are disconnected from the healthcare system tend to need high-cost hospitalizations when a health crisis arises. In fact, a recent study estimates that homebound patients are 3 times more likely to be hospitalized within a 12-month period than the non-homebound. For providers in value-based contracts, these high-cost interventions can offset the financial impact of effective care and cost management for hundreds of other patients, resulting in underperformance in these contracts. So it is all the more important to get in front of these issues before they arise.

What to do about disconnected patients?

For providers, disconnected patients pose two challenges: 1) how to identify them, and 2) how to engage them in ongoing care, preferably preventive. This involves finding these patients, updating their health information, truly understanding why they are absent from care, and taking steps to tackle those obstacles. Successful approaches include:

  • New Visit Types – Annual Wellness Visits create an opportunity to reconnect with patients gather information about the state of their health (which can create significant value via risk adjustment), and offer other screening or preventive care as needed.
  • Care Management – Engaging specific patients in ongoing care can help manage their chronic conditions and comorbidities, and reduce hospitalizations.
  • Home-Based Care – By bringing care to the patient’s home, providers deliver care to patients where they are best served. This includes services such as on-site care management and medication management, coordination with community and social programs, and proactive care for chronic conditions. Extending their reach into the patients’ home also fosters a stronger relationship, increasing the likelihood that patients will reach out to their providers before availing themselves of more costly emergency care options. The reduction in travel back and forth to appointments reduces stress on patients and caregivers, offers better and more coordinated access to the healthcare system, and maintains engagement. Finally, home-based services can help identify gaps in social determinants of health, and can coordinate community support programs like transportation to specialist appointments and meal-delivery to address these gaps.
  • Community Programs – The ability to create comprehensive care programs like the PACE program (Programs of All-Inclusive Care for the Elderly) can meet the end-to-end needs of vulnerable patient populations. Although currently focused on narrowly defined group of certain frail, community-dwelling dual-eligible (Medicare and Medicaid) elderly patients, the effectiveness of this kind of program provides a model for broader application to other populations.

New times call for a new approach to disconnected patients. They have long posed a challenge for providers, but become more important than ever as we shift toward value-based care. A well-designed program to extend primary care services to strengthen the provider’s reach within their patient base, can represent a significant opportunity to find and repatriate disconnected patients, and most importantly, to keep them engaged in their care.

Washington is stalled – do we get some breathing room? Remember employers are still driving innovation in healthcare.

For past decade the big moves in healthcare have been coming out of Washington. Clearly a lot of hope and effort has gone into digital health and big data, and employers have always been driving new solutions. However, so much energy has been absorbed reacting to the federal government – first Obamacare and then MACRA. I know this will continue.

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It is a rite of passage that anyone that spends a considerable amount of time during their career in a direct sales role self-identifies with a favorite film that tackles the high-points and absurdities of being a front-line growth contributor. It’s a great career but sometimes you just need to laugh.