Keeping Up With the Consumerization of Healthcare
Meeting the demands of today's patients goes well beyond clinical outcomes—and includes the broader consumer experience of higher-quality pricing, transparent billing, simple payment processes and improved customer satisfaction.
With the widespread proliferation of high-deductible health plans, patients are seeing their premiums, deductibles and coinsurance rise—and they’re demanding transparency and tools to evaluate all options for care. According to the Kaiser Family Foundation/Health Research & Educational Trust 2015 Employer Health Benefits Survey, the average deductible that workers must pay for medical care before insurance increased from $303 in 2006 to $1,077 today. It comes, as The Wall Street Journal noted, at the same time that wage growth remains stubbornly low.
To get new patients in the door and retain them as loyal customers for future visits, healthcare providers need to maximize the value equation: provide better care for less. But the value equation has more variables than simply the quality of care and its cost. Most patients are looking at factors like convenience, comfort, availability, flexibility and brand loyalty. This is good news—while every provider is struggling to improve quality and drive down costs, there are readily actionable strategies for improving your patients’ experience in other areas.
Lessons From Retail
The emergence of retail clinics as treatment facilities is the most obvious sign of healthcare consumerization. These limited-service-quick-care clinics are often attached to chain pharmacies, such as Rite Aid, Walgreens and Wal-Mart. By capitalizing on the location, advertising and brand recognition of their parent companies, they can offer a more convenient alternative to traditional clinics.
Although retail outlets can’t offer a full range of medical services and will never fully replace traditional health systems, they are positioned to continue taking market share. Providers can look to this customer-centered, transparent approach to retail healthcare as they address growing consumer demands.
Streamline Your Billing Practices
Better billing practices are an excellent avenue for boosting your value equation. Where billing was once a business-to-business transaction between providers and insurers, providers today are challenged to adopt a business-to-consumer model that prioritizes service, convenience and customer satisfaction.
Some organizations have responded by adding customer service teams to their central billing departments, while many retail clinics address the challenge by offering a “menu” of fixed prices for routine procedures—eliminating worries about hidden charges. But while upfront pricing may not be feasible for more complex procedures, a move to more transparent billing practices that clearly break down the cost of care can improve patient satisfaction—and increase propensity to pay.
Offer More Ways to Pay
Consumers appreciate flexible payment options on any big-ticket item, and healthcare should be no exception. Most visits to the doctor are not only unplanned, but they’re also unavoidable, and few patients save up for these unforeseen healthcare expenses. Offering payment plans is a good first step, but incorporating automatic account debiting can help patients stay current on their payment plans without constant reminders.
Consumers are increasingly dependent on technology, especially mobile. According to Experian’s Millennials Come of Age report, 77 percent of millennials and 70 percent of Generation X own a smartphone today. Technology is creating new ways to pay, and consumers are expecting options. At the office, insisting on a check can turn patients off. Accepting mobile, POS system and web-based payments allow patients to pay their bills without the hassle of mailing a check. By offering more options for payment, you can allow patients to settle their bills faster and with less stress.
Increase Loyalty Via the Web
A useful website can engage your patients, build brand loyalty and enhance the convenience and effectiveness of your services. web-based appointment setting lets patients easily review their doctors’ schedules and select the most convenient times and dates to come in. Patients can choose the most appropriate doctor for their visit based on criteria such as medical specialties, educational background and language fluency.
But the web has potential for healthcare providers far beyond streamlining appointments and payments. An online presence can help you engage your patients with their health on a daily basis. Healthcare professionals can help patients set realistic fitness and dietary goals, and incent them to monitor their blood pressure, sugar intake and/or weight at home. Constant engagement with your patients’ health can build loyalty and ensure repeat business.
Embrace the Telemedicine Threat
Services like Teladoc and Doctor on Demand are threatening to upend traditional care by introducing patients to instantaneous medical counseling for as little as $40 per session. Major insurers like Anthem have started facilitating access to online consultations, and the insurance startup Oscar Health now provides clients with a free, 24-hour physician hotline. Patients no longer have to visit an office to receive treatment for common ailments like the flu or pink eye.
While the rise of $40 telemedicine consultations might seem like daunting competition, there are opportunities for traditional providers to supplement these online consultations. Telemedicine may replace office visits for simple cases, but online services will often require an in-person visit for diagnostic tests or lab work.
Prepare for More Change
Taking advantage of the changing healthcare landscape will require developing new partnerships with third-party vendors. Healthcare systems need to consider partners, vendors and applications that improve the quality of the consumer experience in addition to the patient experience. From setting up a POS payment system to providing patients with new online tools that manage their health, selecting the right vendors will improve your customer service while pushing down costs.
Being successful in the new consumerized marketplace will require a fundamental shift in your approach to the patient experience. It means providing value, not just care. It will require embracing the values of customer service, convenience and transparency—all without sacrificing the quality of care. It means using technology to help patients meet their goals and working to harness disruptive technologies that threaten the old business model. Approaching patients as consumers presents challenges, but it also offers opportunities—and success will depend on your ability to handle the ongoing transformation.
The material contained herein is intended as a general market and/or economic commentary, in no way constitutes J.P. Morgan research and should not be treated as such. Further, the information and any views contained herein may differ from that contained in J.P. Morgan research reports.
The statistics in the attached article have been obtained from external sources. J.P. Morgan does not guarantee their accuracy, completeness or reliability.