The new health care consumer looking at finances, value

Patients are morphing into health consumers, shaped by paying first dollar for health care services. At the same time, people have become multichannel omnivores of information and entertainment, enabled by mobile platforms and Wi-Fi networks available where they live, work and play. They’re living daily lives enjoying high levels of customer service in the retail, financial services, media, and travel and hospitality industries.

As people face more financial and clinical decision-making responsibility for their health, health care feels more like a retail product than a third-party referral service.

This mega-change is occurring as the U.S. economy continues to reinvent itself after the Great Recession of 2008. The recession reshaped consumers in key ways. Consumers now look to patronize companies and organizations that help them:

• Save money, to maximize personal financial wellness.
• Conserve resources, such as personal energy (to minimize stress) and mindfulness.
• Inspire creativity, to support do-it-yourself activities including cooking at home, gardening and home maintenance.
• Keep them healthy.

The bottom line

The vast majority of consumers look to an array of industry sectors to help them manage health. While 9 in 10 U.S. consumers expect health care providers, pharmaceutical companies and over-the-counter medicine manufacturers to engage in health, 86 percent of people look to media, 82 percent to consumer technology and 77 percent to banking and financial services companies for health engagement.

“Financial services?” you might ask. Indeed. Because, while hospitals and physicians grapple with new reimbursement regimes moving from volume to value, people receiving health care — patients — are faced with their own new payment systems, leading to a new kind of health care sticker shock: high-deductible health plans. Patients enrolled in these so-called consumer-directed health plans need a lot more direction and support to manage navigating them and paying for covered services.

Health care spending is a top-of-mind line item in the American family budget. In 2015, 1 in every 5 dollars of Americans’ household spending went to health care, according to the U.S. Commerce Department.

Among so-called “pocketbook costs,” health care is the No. 1 line item Americans say is difficult to afford each month — more than utilities, rent or mortgage, food or gas, according to the Kaiser Family Foundation’s Health Tracking Poll (October 2015). This is true for most people earning less than $40,000 a year; but 16 percent of Americans earning $90,000 a year or more (the highest income cohort polled) also say that health care is the No. 1 pocketbook issue for their family.

How should health care providers deal with new health consumers’ search for financial wellness? By embracing transparency — that is, clearly communicating the value of services in terms of price, quality and convenience — and by attending to other attributes consumers rank highly.

Retail advantage

In a 2014 survey conducted by Strategy&, consumers were asked their level of trust across various industries to help manage their health. While 39 percent of consumers said they’d trust health care providers, 40 percent trusted large retailers, and 38 percent trusted digitally enabled companies.

Let me repeat: The same percentage of consumers would trust the likes of Wal-Mart, Target and Costco and of Amazon, Uber and Apple to help them manage their health as would trust your hospital or physician organization. Why? The most important reasons consumers cite have to do with trust in receiving quality care at the lowest cost, and a clearly stated core benefit.

Thus, consumers are taking advantage of receiving flu shots at pharmacies colocated in big-box stores.

Wal-Mart is expanding primary care clinics where employees pay $4 for a physician visit and nonemployees pay $40.

Grocery chains are hiring registered dietitians to stroll store aisles with shoppers newly diagnosed with Type 2 diabetes, counseling them how to build a healthy shopping cart.

And a growing cadre of high-caliber, well-designed primary care practices are contracting directly with patients for care, underpinned with information technology that enables online just-in-time appointment scheduling, linked mobile health apps and free Wi-Fi in the waiting room.

Welcome to the new era of health@retail.

Early in my career when I would utter the phrase “retail health,” I was referring to the pharmacy. Today, “retail health” is health care, everywhere, in the eyes of the new consumer. 

Jane Sarasohn-Kahn, M.A. (economics), M.H.S.A. (jane@think-health.com), is a health economist and adviser and is principal of THINK-Health LLC in Phoenixville, Pa. She blogs at Health Populi and is a member of Health Forum’s Speakers Express.