New study shows most hospitals now recognize that patients are becoming more cost-conscious and customer-service driven due to the high cost of healthcare, but few have strategies in place to attract a more-engaged consumer
High-deductible health plans (HDHPs) are forcing consumers to be more cost-conscious when making healthcare decisions. This trend toward consumerism could be beneficial for clinical laboratories and pathology groups, whose patients would have multiple choices in where to purchase medical laboratory testing services and are looking for labs with good quality and competitive prices.
Greater numbers of patients must pay more out-of-pocket for their healthcare, but are also gaining access to increasing amounts of information about doctors and hospitals. As this happens, patients are “demanding straightforward information on prices, proof of value, and excellent customer service,” according to an article in Trustee, a publication of the American Hospital Association (AHA).
However, hospitals have been slow to react to this new interest by patients in transparency in prices and quality by developing a consumer strategy. That’s according to the “2016 State of Consumerism in Healthcare” report prepared by consulting firms Kaufman Hall and Cadent Consulting Group.
Priorities Override Demand
“Although the majority of hospitals and health systems recognize the importance of consumerism, most have not put consumerism into action,” the report states.
The authors of the “2016 State of Consumerism in Healthcare” report surveyed executives at more than 100 US hospitals and health systems. They found that:
• 66% of those surveyed said it was important to develop insights into patients’ behaviors and expectations, but less than 25% of healthcare organizations had the tools to gather and analyze patient data, and only 16% had the capability to launch strategies based on consumer insights;
• 79% of respondents said there is a pressing need to understand and enhance patient experience, but only 18% have employed advanced means to do so; and
• Only 29% of respondents consider strategic pricing a high priority, and only 9% have advanced pricing strategies in place.
“Our findings show that healthcare executives recognize the many operational areas that require consumer insights from strategic planning to site selection,” Ken Harris, Managing Partner, Cadent Consulting Group of Wilton, Conn., said in a news release. “The next step is for organizations to establish clear strategic and business-unit goals that ensure consumer-centric insights are developed and applied across the enterprise.”
Some healthcare executives do recognize how consumerism is affecting healthcare decision-making. In the Trustee article, David Pate, MD, JD, President and CEO of St. Luke’s Health System in Boise, Idaho, said he sees firsthand from his adult daughters the changes that are afoot, noting one of his daughters changed her pediatrician solely to gain access to online medical records.
“They are millennials, and they are not like me or my parents,” said Pate. “They don’t understand how we might call a doctor and fully accept that it might be a couple of weeks before we could get an appointment. They just don’t understand that, and, frankly, expect better service and options that meet their needs.”
Even Hospitals in ACA Exchanges Are Affected by Consumerism
An article in MedCity News points out that consumerism is growing even in states such as Pennsylvania, where major insurance providers have pulled out of the Affordable Care Act healthcare marketplace.
“The number of insurance providers is having an impact of choice in terms of what plans you sign up for, but once you’re in that plan, you’ll have multiple choices in terms of where you spend that dollar,” stated Paul Crnkovich, Managing Director at Kaufman Hall, in the MedCity News article. “Hospital systems primarily are getting a big wake-up call in terms of their need to be more customer-centric in their offerings.”
Memorial Hermann Medical Group in Houston has adjusted its business model in response to consumer-savvy patients. It was ahead of the curve in 2007 when it partnered with RediClinic to provide basic health services in grocery stores.
Since then, the system has continued to make a major pivot toward consumers, stated David James, MD, JD, CEO of Memorial Hermann Medical Group, in the Trustee article. “The new front door is through consumer-driven health and nontraditional relationships,” he noted.
Crnkovich advised hospitals and health systems to find new ways to get patients access to healthcare through online scheduling, urgent care clinics, or virtual visits. MedCity News noted that the Consumerism in Healthcare survey reported 35% of respondents offer virtual visits for patients, and an equal number gather patient experience assessments in order to grade their own efforts in delivering healthcare.
“At the end of the day healthcare providers have to think: Who are my customers? What do they want? And how do I deliver on those needs better than anybody else?” Crnkovich stated in MedCity News. “It’s like any other business.”
Should There Be Limits on Consumerism?
While the trend toward consumerism may become the new normal in healthcare, some healthcare leaders argue there is—or should be—a limit on the inroads it makes in inpatient care.
“On the outpatient side, it’s more fitting that people will shop for price, and you could argue that much of the outpatient services are commodities, but I don’t believe that to be true from an inpatient perspective, and I would hate to have people make what ultimately could be a life-and-death decision on the basis of cost,” stated Mark Bogen, Senior Vice President of Finance and Chief Financial Officer at South Nassau Communities Hospital in Oceanside, NY, in a HealthLeaders Media article.
Nevertheless, since the medical laboratories of hospitals and health systems are patient-facing when collecting specimens from patients, and when interacting with physicians who are treating patients, they could become a starting point for initiating effective consumer strategy programs from within their organizations.
—Andrea Downing Peck