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.