Healthcare Consumerism Definition
Healthcare consumerism is a movement to make the delivery of healthcare services more efficient and cost-effective. Consumerism transforms an employer’s health benefit plan, putting the economic purchasing power and decision-making in the hands of plan participants. In short, healthcare consumerism’s goal is to enable patients to become wholly involved in their healthcare decisions.
However, many plans don’t ask much of participants in terms of how they consume healthcare services. As a result, patients tend to pay little attention to cost since they only have minimal “skin in the game.” Plus, patients generally don’t like shopping for healthcare or managing their own health information. Instead, they are are looking for the same type of care and service that they have grown accustomed to in other sectors.
To develop more conscientious healthcare users, plans and healthcare professionals need to provide the information, financial incentives, and decision-making tools to consumers to allow them to make educated healthcare purchasing decisions.
According to NRC Health, healthcare consumerism from a provider’s perspective has accelerated and evolved during the pandemic. Some trends of note include:
- Now more than ever, patients are looking for convenience and a relationship with the provider.
- Care has been deferred, especially among patients aged 75+, potentially those who need it most.
- The pandemic has accelerated growth in telehealth. This has been quite successful, but many would prefer to return to on-site visits.
- Digital health tools are being utilized more, but not discussed in office visits.
- Patients utilize social media in other sectors, but not as much in healthcare. Projections indicate providers need to get on this as preferences change.
Ultimately, the goal is to provide better healthcare and improve patient outcomes while reducing costs and driving efficiencies throughout the healthcare industry – the consumerism definition.
The Impact of Healthcare Consumerism
Today’s consumers want to take responsibility for managing their own health. Yet, most feel they don’t have the information and tools to do so. In other industries, customers can easily access comparisons of features, benefits, and costs to guide their purchasing decisions. In contrast, the healthcare industry presents a huge array of confusing choices, contact points, and service flows without any upfront pricing information.
Seventy-five percent of consumers consider their healthcare decisions as the most important and expensive decisions they make. Yet, the process of choosing and paying for medical services can be so daunting that patients often decline treatment simply to avoid the confusion and expense.
To make better decisions, healthcare consumers are increasingly expecting – and demanding – better information and more transparency from healthcare providers. They’re also asking for more of a partner relationship rather than a one-way dialog from medical provider to patient.
At the same time, as healthcare costs continue to rise, consumers are being required to assume responsibility for a larger share of the costs of health plan premiums, co-pays, and out-of-pocket expenses. How do consumers pay for these costs?
Consumer Directed Healthcare Accounts
There are three major components to employer-sponsored healthcare benefits that are central to healthcare consumerism. These are Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs), and Health Savings Accounts (HSAs). Each of these tax-advantaged accounts allows participants to use set aside funds to cover out-of-pocket healthcare expenses. While each account is different in design, including funding and account ownership, they put the spending function directly in the participants’ hands. Furthermore, due to IRS guidelines on how the money can be spent, consumers must make thoughtful decisions on how to use the accounts. If not, participants risk either overspending their set aside dollars or not being able to receive reimbursement for an expense they thought might be covered.
In addition to FSAs, HRAs, and HSAs, there are other variations including small employer HRAs and limited purpose FSAs, which are also a part of the healthcare consumerism landscape.
What Lies Ahead
Healthcare consumerism will require a massive change in the way healthcare professionals market, deliver, and charge for their services. In particular, healthcare providers will need to focus on building their brands as they strive to operate more like a retail business in a highly competitive market.
For 2021 and beyond we can expect the following:
- Consumers will continue to pay more for premiums and out-of-pocket expenses.
- Employers will help mitigate some of the costs through HSAs and other tax-advantaged plans.
- Healthcare organizations will need to provide more open channels of communication. As consumers embrace reviews, information and advice disseminated through digital channels, providers will have to adapt.
- The delivery of healthcare services will become more marketing-driven.
As healthcare moves toward value rather than volume, patient care and service provider compensation will undergo a profound transformation. The state of healthcare is constantly being refined. With healthcare consumerism on the rise and the consumerism definition continually evolving, this should generate a more efficient, cost-effective system for all.
DataPath Summit is a cloud-based platform for CDH account administration, including FSAs, DCAP, HRAs,and QSEHRAs, and features secure, streamlined financial processing, including debit cards and electronic payments.
Challenges in healthcare today are drastically different than years ago
When I first started in healthcare 20 years ago, “competition” wasn’t a word we really used. For the most part, you needed a good location and an ad in the yellow pages to get started. Similar doctors in your area were "colleagues," not competition. Now, however, there's no denying the competitive landscape of running a hospital or practice.
Today, hospitals and private equity groups are aggressively acquiring physicians and practices. In some markets, the competition has become so aggressive, that it’s hard to get your foot in the door.
Some of the biggest challenges in healthcare today require doctors to shift their thinking to be competitive in the market. While doctors in your area remain your colleagues, you have to market to stay ahead. And with changing patient behaviors and expectations, your marketing should evolve with the times.
#1: Changing consumer behaviors and expectations
Patients today feel empowered as consumers of healthcare. They’re not picking the doctor closest to their location—they’re picking the doctor that can offer the greatest convenience and a level of care that meets their expectations. They’re more and more interested in telehealth, in scheduling online appointments, and in having online access to health information.
The challenges in healthcare today often center around these changing patient/consumer behaviors, especially when practices and hospitals fail to adapt to what patients need. Patients are looking for convenience and care. They want the experience to mirror customer service, and if you can't deliver, then patients will look elsewhere.
#2: HIPAA marketing limitations
Up until the 1970s, marketing for hospitals and practices was mostly illegal, and it still took many years for the boards to decide it was ethical. Today, those attitudes about the ethics of medical marketing can carry over, and it extends to legal limitations as well.
HIPAA is always a concern in healthcare advertising—and it's something Google takes very seriously. Typically, businesses can use Google AdWords remarketing tools to show display ads to people who have visited their website or expressed interest in their products. However, healthcare is different.
Healthcare advertisers can still use pay-per-click advertising to get their website or landing page at the top of the Google search results. However, they cannot retarget those who have visited their websites in the past due to HIPAA concerns. Online pharmacies, pharmaceutical manufacturers, and governmental or non-profit health advocacy organizations can apply as an exception to the rule. For most hospitals and practices, though, other advertising routes are necessary. Our healthcare advertising agency has found a lot of success using Facebook ad retargeting as an alternative to AdWords.
#3: Underinvestment in healthcare marketing
While some of the challenges in healthcare today have to do with patient behavior and regulations, most of the challenges we see come from healthcare organizations themselves. Too many doctors and key stakeholders are resistant to adding more dollars into their campaigns--and then they complain when they don't see the results they expect.
As a healthcare agency, we wish we could put $1 into a box and give you $1 million back. But that’s simply not the case. Marketing your organization involves an investment. With the right investment in your brand, a standard ROI could be anywhere from about 3:1 to 5:1--and sometimes we've even seen 100:1--but this involves a long-term strategy with a proper investment.
#4: Reviews from online doctor rating sites
Today’s patients want to know what they are getting into before they visit your practice or hospital. It's nice to believe your credentials matter more than what others are saying about you. But when other doctors in your area have similar backgrounds, a patient will put faith in what others are saying.
Many doctors I talk to are resistant to this trend. They don’t want to focus on online reviews, especially since they feel they have little control over what people are saying. But the truth is that 84% of people trust online reviews as much as a recommendation from a friend.
Using an automated reputation management system makes it a lot easier to get reviews from happy patients on your website and follow up to request reviews on other sites. Investing in review management is another way to invest in your brand.
#5: Your product
All the marketing in the world would be lipstick on a pig without the right product. Your product is your brand: the staff’s phone skills, the state of your facility, and the level of service you provide. You could be at the top of Google's search results for every relevant term in your market--but without a quality product, patients won't keep coming back.
Poor phone skills are a huge factor in keeping patients from ever stepping foot in your office. And many practices don't realize how much something like a dirty utility closet or a broken soap dispenser can hurt their bottom line. Fine-tuning your product by training your staff, changing processes, and even simply redecorating can make a world of difference.