How Healthcare Consumerism Is Causing Disruption and Opportunity for Providers

Few sectors of the economy are seeing more rapid changes in their products and their delivery models than healthcare. COVID-19 accelerated acceptance for changes in virtual care that many would have predicted in 2019 were decades away. Healthcare consumerism is changing the way that patients access care and is having a profound impact on the bottom lines of providers.

What Is Healthcare Consumerism?

Think of healthcare consumerism as the manner in which patients can make better informed choices about their healthcare from a wider selection of available providers. Patients have more options than ever to understand costs, assess the value of services provided, and choose methods of delivery that weren’t available just a few years ago.

Traditional brick-and-mortar healthcare systems have sometimes struggled to keep up with these trends. Many have failed to grasp that a successful surgery and the discharge of a healthy recovering patient are now just the bare minimums that most consumers expect. If a patient can get a successful joint replacement done for the same cost at several hospitals, why wouldn’t the patient compare amenities such as food and room cleanliness at the facilities? It’s not easy for medical institutions to understand that patients may view clinical care as an interchangeable commodity. In this new realm, the amenities and facilities are the criteria for consumer decisions.

At the same time, patients who focus on convenience and price in their medical decisions can lose sight of the value of an integrated continuum of comprehensive, high-quality healthcare providers. It may be easy for patients to use new digital technologies to pick and choose the cheapest and most convenient care, but there is risk when they self-diagnose and their signs and symptoms are not properly documented. Effective medicine requires a provider that is positioned to see a bigger picture and escalate concerns for additional analysis and treatment, which may not have been part of a patient’s budget expectation.

Trends That Healthcare Consumerism Is Driving

Here are the ways healthcare consumerism is impacting patients, providers, employers, payers, and other components within the healthcare landscape:

Access to Care

• More locations like urgent care facilities are available in communities and are staying open for longer hours. “Retail” operations like occupational therapy and physical therapy are moving out of the hospital and into more accessible locations around the community.
• Provider partnerships are helping rural facilities team up with larger healthcare systems in large cities to deliver a more consistent level of expert care to areas that may have previously been underserved.
• Virtual visits are enabling appointments that previously couldn’t happen due to schedule conflicts and lack of provider availability.

Employer Outreach

• Many healthcare systems are taking it upon themselves to connect with the employers who develop healthcare plans for their employees to make sure that preventive care and wellness maintenance programs are covered.

Private Equity

• These financial institutions have created models that traditional healthcare doesn’t offer and may not be able to offer. A typical model for them:
  • Start in a clinical or geographic niche
  • Build brand loyalty
  • Expand and expand until eventually achieving sufficient scale and market penetration to realize a negotiation advantage with payers
  • Sell the business
• Private equity picks up the retail and corporate operations, but they rarely touch the operations inside a hospital. They also rarely participate in Medicare and Medicaid. They target high-income earners who can afford to pay out of pocket for a better care experience. Some label this healthcare consumerist trend as courting the “wealthy worried.”
• They can build better front ends to attract patients, but they can rarely provide a full continuum of care.

Technology and Devices

• Technology is an enabler to build better patient experiences. When used properly, it helps a hospital go beyond asking how they serve patients to how they delight patients. In the past, healthcare systems approached technology platforms from a standpoint of what the platform could do for the organization, and patients ignored them. Now many are adopting a model that considers what the patient wants from the platform and how the patient wants to connect with the system.
• Technology can now enable a “hospital at home” experience through virtual platforms for certain conditions. This can include a virtual visit with a doctor once a day and in-person nursing and care support. These systems frequently leverage devices that transmit physiologic data to a central hub for interpretation.
• Integrating data within systems to meet client expectations remains one of the most significant challenges. Healthcare technology systems frequently do not connect with one another, even with focused partner relationships. A patient may have a virtual visit with a doctor in a hospital, but their local family physician has no access to that chart and information. The system needs the kind of continuity that consumers experience when sending texts. Maybe you need an app if you want a FaceTime-type call from an Apple phone to a Samsung phone, but those apps are being created and improved regularly. Progress is being made in the interoperability and universality of healthcare records, but there is still a long way to go.

Conclusion

Healthcare is evolving, and today’s structures and models of care delivery will disappear or dramatically change. Patients will continue to find the most convenient channels and methods for care delivery. Providers that embrace this new patient-as-consumer dynamic and offer new channels of delivery are most likely to benefit.

To learn more about how changes driven by healthcare consumerism can affect your healthcare system, please contact your KSM advisor or complete this form.