Are We Patients, Consumers, Or Customers?
Dr. Robert Pearl posted on this question two weeks ago. His background is medicine, and mine is business, so I will offer my own take from a business perspective.
Dr. Pearl concludes that we are both consumers and patients. In some situations we can be consumers, voting with our dollars when we engage with the health care system. When you need a basic pain medication, for example, you can choose a branded product like Advil® or its generic, Ibuprofen, you know that there are many places to buy it, and the risk from making once choice versus another is not great. And sometimes we really can’t be consumers: when we are incapacitated, in need of technically-complex advice, or facing hard facts and decisions, consumerism is not an option. In this situation we depend on guidance and treatment from medical providers.
This ebb and flow of the power relationship between provider and consumer is not unique to medicine. Many markets cycle between conditions where consumers have the upper hand (“buyers’ market”) and those where providers have the upper hand (“sellers’ market”). And many businesses have some components that are commoditized (like Ibuprofen) and some that are “sticky”, meaning that it is hard to substitute one provider for another.
For business people, the concept of a “customer” transcends the ebb and flow of power in the buyer/seller relationship. Business people know that their businesses exist because they create value for customers and earn their trust. Respect for the customer is core to the ethos of businesses that are built to last. Businesses that fail to show respect for customers often pay a harsh price, as happened to various financial institutions in the last decade.
Consumerism is gaining ground in medicine, but the concept of the customer has a long way to go, particularly for individual customers. Daraprim is a dramatic example: Turing Pharmaceuticals bought this old drug with no good substitute and raised its price 50x, putting the cost per year for a patient into the $100s of thousands. This shows zero respect for the customer.
Although less dramatic, there are numerous other examples in healthcare. Many new drugs have been priced at 5 or 6 figures per year or course of treatment, and while the justification is typically better than for Daraprim, it appears that some pharma companies are exploring how high they can take pricing. Individual patients mostly have little recourse here. However, pharma companies benefit from a great deal of public support: patent protection, NIH-funded research, and the forbearance of the U.S. government from using tough tactics to hold down drug prices as other rich countries do. Failure to respect customers (collectively) here may prove costly, as evidenced by Hillary Clinton’s plan to take on excessive drug pricing.
Stephen Brill in his famous article unearths similar behavior by hospitals: outrageous charges to uninsured patients at a time of great vulnerability. The reaction from the public and political leaders has been less sharp here, but government has taken action. Massachusetts, for example, has imposed overall price increase caps on hospitals, and CMS released Medicare data showing that hospitals in the same region charge dramatically different prices for the same service, with no apparent justification.
The term “patient” lies at the root level of this issue. Calling your customer a “patient” inevitably communicates a lack of respect. For me it calls to mind the image of a sick person waiting long past appointment time to see a doctor. Perhaps the doctor is late due to a medical emergency. But it’s also believable that s/he is late due to overbooking to squeeze every last dollar out of the day, a golf game that ran a bit long, or just a lack of commitment to keeping the schedule. Personally I have seen all of these situations. Using the word “patient” is not just a tradition, as Dr. Pearl characterizes it. It’s a mindset, too.
The increasingly fragmented and transactional nature of medicine weakens the relationships on which the concept of customer is based. Fifty years ago the family doctor provided most of the medical care needed by a family and followed family members into the hospital. Today most doctors are specialists who are brought in to provide a specific service; they often have little or no continuity with the patient. Family doctors’ time budget with patients is squeezed, so more care is passed on to specialists, and family doctors hand off hospitalized patients to “hospitalists”.
Some health care innovators are basing their businesses on the concept of customer and benefitting from it. CVS is a good example. It has expanded its range of services to include a large part of primary care: common illnesses, vaccinations, minor wounds, wellness services, and common lab tests. CVS aims to strengthen the relationship with the customer, keep him or her coming back to the store, and make money across its mix of products and over time. Health insurance companies are learning to identify their most attractive customers and making extra efforts to keep them loyal. Retainer-based primary care providers like Iora Health (a venture-backed start-up) and forward thinking corporate plan sponsors like Comcast are investing more resources in strong relationships between primary care providers and their customers because they see multiple benefits: better health and lower and more cost-effective usage of advanced medical care.
As individuals, we are sometimes patients, and sometimes consumers, but we are always customers, and healthcare providers that embrace that view will do better in long run.
Originally published at www.forbes.com on October 22, 2015.
