The “Retailization” of Healthcare: Emerging Themes Driving Individual Care Choices
A one-stop, seamless shopping experience. Easily accessible goods. Online cost comparison tools. Online ratings and reviews as indicators of expected satisfaction. These are some of the many hallmarks of the retail-oriented consumer experience. A growing number of Americans shouldering a greater burden of their own healthcare costs are seeking the retail-oriented experience they are accustomed to, from the healthcare system. While segments of the population with different care needs will certainly exhibit unique preferences, data seems to indicate that evolving expectations of the healthcare system are shaping an individual-focused “retailization” of healthcare.
About half of the US population receives health insurance through their employer. In the 2000s, with healthcare costs rising and a looming ACA Cadillac Tax, large employers began to offer high-deductible health plans (HDHPs) to employees, hoping to control costs by encouraging their employees to share in a larger percentage of their own healthcare expenses. Employees, left with few alternative choices, began to embrace this option and as a result almost 30% of the workforce is in one of these plans today. However, both employee premiums and deductible growth have been outpacing wage growth, a concerning trend especially considering how unpredictable healthcare costs can be. To highlight the magnitude of this issue, consider the fact that the average cost of a family plan is $20,000 compared to a median household income of $61,000 and that premiums for family plans have gone up 55% in the past decade (twice as fast as employee pay). Though concerned employers have now begun eliminating HDHP plan offerings, the wheels of healthcare retailization have been set in motion. Looking towards the future, per capita healthcare cost growth is expected to continue outpacing economic growth, our workforce will age at a faster rate, almost 50% of the population will suffer from at least one chronic disease (45% do today) and quality will need to match cost. Clearly personal health and wealth management are now very much intertwined, a strong impetus for all of us to become savvier healthcare shoppers, consumers and patients.
This has all accelerated a shift in expectations about healthcare services. With a multitude of available healthcare options, limited transparency on comparison factors and an increasing responsibility to manage personal healthcare costs, Americans are evaluating new criteria to determine how to manage their healthcare needs. In the past few years, a wave of startups have introduced products designed to help individuals become savvier care shoppers and better stewards of their own care. As startups work with payers, health systems, pharma companies and others (“care providers”) to facilitate change, it may be worthwhile to note a few themes indicative of evolving preferences:
Engage Individuals Digitally, Before They Seek Care
When a medical need arises there are many resources to help individuals make care decisions. Nearly 70% of individuals cite the recommendation of a trusted network of family members, friends or close acquaintances as most influential in driving their care decisions. What’s interesting though is the dichotomy between younger and older individuals. It turns out that nearly 80% of all individuals and 90% of younger individuals (<25 years old) consult their trusted network through online tools and social media. This is fascinating considering the increasing influence social media has on consumer purchasing behavior. Meanwhile, many older individuals (>50 years old) look to a trusted network of caregivers (friends, family or others who help individuals manage their care outside of the acute setting) to make these decisions on their behalf. Given that many individuals’ healthcare decisions are influenced by social media and a subset of these individuals are in turn making care decisions on behalf of others, there seems to be an opportunity to influence care decision-making online (though it’s unclear how effective existing healthcare social media outreach efforts are). Moreover, nearly 70% of decisions that drive healthcare status are lifestyle / environment related, so keeping individuals engaged in their care before they “need care” goes a long way towards improving their health and controlling costs. For individuals, online social resources help them access information they care about at convenient times and in the formats they prefer. For care providers it’s an opportunity to create content (e.g., health tips, healthy recipes, symptom checking, preventative care instructions, scheduling/access information, brand recognition) that continually engages/directs individuals and allows them to take ownership of their own health without necessarily making them feel like they are “patients”. In an increasingly value-based care world where inpatient utilization will decline and individuals will “shop” for their care, these efforts could go a long way especially towards connecting potential patients and providers, fostering loyalty and preventing costly downstream disease progression.
Bring Care Outside of the Acute Setting
Once the decision to seek care has been made, an increasingly important factor in where individuals go to seek care is the physical convenience of the care location. A 2016 Advisory Board Company consumer survey cited “access and convenience” as the single most important determinant of where individuals sought their primary care, and nearly half of all individuals cited distance as an important consideration when choosing a specialist. In fact, over 50% of healthcare related Google searches on mobile devices include the words “near me”. Another important indicator of this trend has been the rapid growth in utilization of healthcare services in home and community settings. This is mostly the result of an increased number of basic care services now available in these settings including retail clinics and urgent care centers, pharmacy and grocery store care kiosks as well as home healthcare offerings that meet the patient where they are. It’s worth noting that much of this increased utilization is new, with nearly 60% of visits representing new utilization and not substitution for primary care or Emergency Department visits. Nonetheless, while many value convenience and geographic accessibility when they physically need care, they would rather forego the trip altogether, which aligns with the recent growth in virtual visits and enrollment in digital care programs for certain conditions. As many recent digital treatment models have begun to prove for those with diabetes and chronic conditions, it can also be clinically beneficial to receive certain kinds of care in more convenient settings. Lastly, evolving reimbursement policies are continuing to incentivize care interventions outside of the acute setting (e.g., CHRONIC Care Act), making it financially beneficial for healthcare stakeholders to participate in this change. Individuals will continue to need inpatient care for more acute needs, but it is quite clear that less intensive healthcare interactions will increasingly occur in more accessible settings. Therefore, care providers with an appropriate continuum of services will likely be in the best position to provide optimal care and access their patients, though understanding how and when to steer their patients to the most appropriate setting will be critical to overall success.
Complement Digital Care with Physician-Led Models
Digital care tools such as telehealth or mobile applications are facilitating the extension of healthcare services as individuals show interest in accessing their care providers virtually. However, widespread adoption of these models has been limited by challenges in physician and patient adoption. Challenges in physician adoption can often be linked to compensation, complexity and culture concerns. However, successful models demonstrate that physician-led efforts with appropriate training and streamlined tools integrated into workflows can mitigate these challenges.
While individuals seem to value the convenience of digital care options, particularly to manage chronic conditions and post-surgical care, their adoption of these tools has not yet matched interest. One of the primary reasons for this is that many are reluctant to embrace digital care tools as a part of their care experience if they perceive the tool is a replacement of the personal relationship with their care provider. Successful models ultimately drive adoption by building digital care into physical visits, rather than substituting for them altogether. At its core healthcare is a personalized and human-centered service, so effective models must strike a balance between technology and physical services to generate engagement and drive outcomes.
Personalize the Care Experience
An important factor shaping who individuals seek their care from is, of course, the quality of the care options available to them. As mentioned before, healthcare is fundamentally a human-centered service so it comes as no surprise that individuals view their relationship with their physician as a partnership, anchored by the human elements of care (e.g., bedside manner). While the prevailing notion has always been that inpatient care outcomes and credentials weigh most heavily in a individual’s rating of quality, in an individual-centric world the entire care experience (pre-visit, inpatient and post-visit) and personal touches define quality and drive choice. This is especially relevant when individuals are seeking primary care or preventative services. A number of surveys have found that individuals searching for a primary care provider care more about how they are treated by the provider and staff than their provider’s credentials or clinical aspects of the care visit. However, the emphasis on a “personalized care experience” seems to fall in relation to an emphasis on care outcomes/credentials when an individual is seeking specialty care. Similar surveys have found that when seeking specialty care, traditional indicators of quality (e.g., hospital quality outcomes, physician experience) are a much bigger driver of patient choice.
Furthermore, personal health management tools (e.g., precision medicine, wearable devices) are allowing individuals to generate uniquely personal data “patient-generated data” that care providers can use to monitor care outside of the acute setting and deliver more precise care if and when an individual requires it. While normalizing and presenting patient-generated data in a format that is actionable remains a challenge, individuals will increasingly expect their care providers to leverage this information to better direct and tailor their care in the future.
Care providers may value the ability to leverage a package of digital engagement tools informed by patient preference data (e.g., lifestyle/demographic information, self-reported care preferences, social media preferences) to consistently personalize the care experience and patient-generated clinical data (e.g., genetic profile, wearable activity data) for precise clinical decision support at the point of care.
Actively Engage Individuals in Cost of Care Discussions
Lastly, cost of care is a prevalent factor in shaping individual decision-making. What many seek as a guide to their decision-making is more cost transparency as well as accurate and user-friendly cost comparison tools. Over the last decade, numerous cost comparison tools have been touted as a solution to the lack of transparency in the healthcare industry. While intended to help individuals make more informed care decisions and drive the utilization of lower-cost services, these tools have mostly failed in both providing comprehensive and accurate information as well as gaining adoption (for a number of reasons not covered here). A recent JAMA survey further validates these findings. In order to meet the needs of increasingly cost-conscious individuals, it is important to engage them in decision-making. Care providers may value first arming the care team with accurate cost/quality data and then encouraging the team to proactively discuss the tradeoffs of different care options with individuals considering care. There is also opportunity for providers, payers and other stakeholders to co-develop patient-centric networks and benefit designs that incentivize utilization of lower cost services (when appropriate) and provide simple, accompanying digital applications to help individuals navigate their options.
These are just a few emerging themes and opportunities for emerging startups to consider as care becomes more personalized and driven by individual choice. It’s also important to note that healthcare delivery is highly nuanced and shaped by local market dynamics, so these points won’t necessarily be applicable to every population or care provider. Nonetheless, many of these trends have already manifested themselves so it will be interesting to see how things continues to play out in 2019 and moving forward.
I would love to continue the conversation and welcome additional thoughts or opinions. Please reach out on twitter @parth_desai48, post a comment or send me a message!
