STRATEGIC PLANNING

Consumer-Responsive Health Care May Be Wave of the Future

For years, “consumerism” has been one of the hottest buzzwords in health care. As 2024 begins, how much progress toward a truly consumer-driven market has the health industry actually made? The answer is Illinois not nearly as much as many experts had predicted, says Dan Miers, chief strategy officer for SPM Group, a marketing agency based in La Grange, Illinois.

“Ten years ago, the conditions for the emergence of health care consumerism all seemed to be falling into place,” says Miers, who made his remarks in a session titled “Health Care Consumerism 2.0: Rethinking How Health Systems Can be More Consumer-Responsive” during the SHSMD Connections Conference 2023, in Chicago. 

He adds that the following conditions created fertile ground for consumerism: 

• Medical inflation was high. 
• The costs of care were on the rise. 
• Health insurance analysts were predicting strong growth in high-deductible plans and robust enrollment in Affordable Care Act (“Obamacare”) insurance offerings. 
• Retail health was expanding among major players, such as CVS and Walmart. 
• Tech giants, such as Apple and Google, were exploring strategies to disrupt the health care status quo. 
• A range of digital health options was being introduced. 
• Health care rating and review sites were springing up across the internet. 

“The expectation was that these developments would put more consumer ‘skin in the game’ and lead to widespread ‘shopping’ for health care services, just like other commodities,” Miers observes. 

Impact of Insurance and Cost 

Despite the ripe market conditions, Miers says health care consumerism never fully realized its potential. “To date, only 29% of consumers are enrolled in high-deductible health plans and participation in Obamacare has peaked at about 12 million people. That means less than a third of the insured population is enrolled in these price-sensitive plans—far below predictions.” 

Recent research by SPM sheds further light on the subject, indicating that while 70% of people engage in price comparison shopping before purchasing consumer products, only 38% indicate they do so for medical services.  

Miers also points to a study by the Advisory Board that found health care meets only one of five criteria that must be present for a consumer-driven market to exist. These criteria are as follows:

1. Options to select. The Advisory Board determined that this is an area where health care has flourished, with hospitals, health systems, and a multitude of new players offering options for medical and wellness services. 
2. Awareness of choice. Health care still falls short when it comes to awareness of choice, because physicians typically direct patients where on to go for care and patients rely on them to do so. 
3. Transparent information on prices and quality. Despite efforts by providers and the government to make this information more available to consumers, the Advisory Board found that information on prices is still difficult to obtain, and quality metrics are complicated and elusive. 
4. Financial impact. The study indicates consumers’ personal financial stake in their health care is primarily limited to services that fall within their deductible. 
5. Willingness to self-refer for care. The Advisory Board notes that few patients meet this criterion because most care is for emergent, complex or undiagnosed conditions for which self-referrals are rarely a factor. 

“Clearly, health care consumerism has failed to take hold, and I think the main reason why is that the majority of patients simply don’t purchase medical services like a commodity,” Miers says. 

Consumer-Responsive Health Care 

Given that conclusion, the question becomes: “What’s the right path moving forward when it comes to consumers?” The answer will be critical in guiding hospitals and health systems in strategic and marketing planning for the future. 

Miers believes a consumer-responsive approach makes the most sense. To shed light on how consumers define responsiveness and what is important in selecting a provider, SPM conducted further research. The results showed that the top priorities are factors associated with patient experience and clinical expertise, such as clear communication regarding treatment plans, ease in scheduling appointments, courteous staff, skilled nurses, high satisfaction ratings and doctors who are leaders in their field. 

The research also indicated that consumers want their hospital and health system to be more involved in meeting their everyday health needs, showing that: 

• 76% are interested in learning how diet, nutrition and lifestyle changes can prevent illness; 
• 70% desire more support with health management activities; and 
• 60% are interested in using wearable devices to monitor their wellness. 

“Consumers are looking for a health partner, and it’s interesting that they’re not naming companies like Apple, CVS or Walmart,” Miers says. “They’re saying they’d like to partner with a hospital or health system. This presents a real opportunity to leverage brand value and step into that role.”  

Over the past decade, California-based Kaiser Permanente has focused on transitioning from transactional to consumer-responsive systems that foster long-term relationships with patients and members. To help accomplish this ambitious goal, David Grandy, Kaiser Permanente’s national vice president for innovation, says the organization established the core principles highlighted below to guide its design teams in creating new services or evaluating existing ones. 

“Within the context of these principles, there are several specific practices that we use to ensure that everything we do is consumer-responsive,” Grandy says. 

Put empathy first. “We try to deeply understand the patient and member experience,” Grandy emphasizes. “In addition to performing surveys and focus groups, we send social scientists into the home to observe and talk to them. It helps us understand where there are obstacles or unmet needs so we can address them. In doing this, we ask, ‘How do we simultaneously develop solutions that work well for patients and members, and the business?’” 

Provide “physgital” experiences. This combines digital interactions, in-person interactions and building environments in ways that are seamless, or physgital. “Bringing those three elements together effectively enables us to create patient and member experiences that are less transactional and more relational,” Grandy says.  

Ensure no dead ends. “When we develop a new service, it’s important to take a macro view of their entire experience to ensure excellence at every touchpoint along the way,” Grandy notes. “This involves close coordination among all the functional departments that are involved in delivering the service to ensure their systems are operating properly and that there are no dead ends for patients and members.”  

Even with a strong organizational commitment, Grandy admits becoming more consumer-responsive can be a daunting challenge. “Kaiser Permanente has been working on this for nearly 10 years, and while we’ve made significant progress, we’re definitely still learning,” he says. “This is especially true when it comes to implementing these principles and practices at scale because we’re such a large, complex company.”