Preparing For the New Frontier of Healthcare Consumerization

The consumerization of healthcare is alive and well, and players in the industry should take notice. Providers that fail to adopt consumer-centric models may come out as losers as this trend indelibly alters the healthcare landscape.

The structure of healthcare is moving away from a business-to-business model limited by the transactions of providers, payers and drug companies. Now, federal mandates are pushing greater patient engagement and consumers are demanding it.

Consumer Readiness

An October 2013 online survey of about 2,000 consumers by Altarum Institute, a Mich.-based consulting firm, indicates some shift toward greater involvement in healthcare, particularly among younger consumers. More than three-quarters (77 percent) of those surveyed want to either share healthcare decisions with their doctors or make the final decision with some professional input.

Four out of five consumers said they are comfortable approaching their physician about healthcare costs, but few actually do. Younger patients were the most likely to shop for lower-priced, better quality care.

Few consumers have taken advantage of health technologies. Only one in five patients have obtained personal health data online to share with their physician. But, that trend may change. Nearly 70 percent of consumers ages 25 to 44 use mobile health apps, according to the survey.

As expectations change, providers must position themselves as attractive choices in the consumer marketplace.

Some organizations have looked outside of healthcare for insight on becoming better at serving consumers, consulting giants like Walt Disney and the Ritz Carlton hotel chain, as well as major players in the financial sector and other large service industries, says Jack Topdjian, vice president and partner, global health and technology practices at Booz & Company, a New York-based global management consulting firm.

But there are limits to this approach, he says. “There are several proxies to adapting solutions from other industries to healthcare that are proving not to work.” While proxies can inform better processes on the administrative side of care, “when you get to clinical engagement, there is no precedent,” he says. 

Patient Engagement

Larger healthcare organizations are blazing the trail on health IT-enabled patient engagement.

William A. Spooner, senior vice president and CIO of San Diego-based Sharp Healthcare, oversees a healthcare system that is an early adopter of consumer-centric technologies—including a patient portal launched in 2010 and actively used by 130,000 patients. Its usage is “diverse,” he says; the portal allows members to schedule doctor and lab appointments, view lab results, access medical histories, email physician offices, pay bills online and refill prescriptions.

Utilization has steadily grown each month, he says. “We have pretty huge numbers of annual access.”

Now patients no longer wait for physicians to call them. Instead, they log on to the portal, order labs ahead of an annual physical so that when the appointment arrives, the doctor already has results in hand to guide a more meaningful interaction.

“It’s an almost free-flowing transparent workflow that didn’t involve a great deal of the patient’s or physician’s time,” Spooner says.

And using this portal, patients now can reach out to physicians via email—which consumers increasingly identify as a must-have. As physicians are not compensated under the fee-for-service model for responding to patients’ electronic requests for clinical advice, Spooner says they initially were concerned about email overload and the corresponding time and financial drain. Also, physicians were reluctant about dispensing medical advice without seeing patients face to face.

“It wasn’t as bad as they feared,” he says. Physicians remain fuzzy about expectations on how they should use patient-generated data entered into the EMR. “I’ve heard physicians tell me that patients lie,” or fail to be forthright about a condition about which they feel sensitive. 

Data from remote devices can help, but they too can burden physicians, Spooner says. For doctors trying to keep track of the blood sugar of a patient with diabetes, data transmitted from remote devices are beneficial. But, Spooner says activity data from popular devices like Fitbits are superfluous and may not be of concern to physicians. 

Provider Strategies

How well are providers prepared for a consumer-centric healthcare system? “We’re still in the experimental stages. There is a lot of talk, but not a lot of action,” says Topdjian.

He was one author of his firm’s paper on the consumerization of healthcare, which identified “fundamental building blocks,” integral to this transition:

Product and service portfolios based on insights derived from a nuanced understanding of consumers;

Tools and programs that engage consumers in care delivery and influence their behavior, and enable service providers to optimize and coordinate patient-centric care; and

End-to-end customer experiences that produce consumer satisfaction, trust and brand loyalty.

Healthcare organizations need to do more than just think about portals and engaging patients, Topdjian says. They must focus their energies on understanding how best to engage consumers across all the channels, including portals, mobile, social and virtual health and support it with a solid backbone based on high availability and quality data and systems, context relevant analytics and integrate them into a comprehensive and usable information set.

Topdjian says two of his clients, which are among the largest integrated delivery systems in the U.S., are making progress solving problems from user interaction to implementing some of the foundational building blocks mentioned above while bringing to market the consumer centric capabilities. However, he says smaller systems may not be equipped to react to the needs of consumers primarily due to heavy investment needs to stand up these capabilities.

“My own perspective is that, in the long term, without some type of hard or virtual integration across the care delivery system, smaller players will have a hard time surviving on their own,” he says.

Sharp Healthcare is in the throes of solving a myriad of issues preventing better clinical data integration and care coordination.

For instance, the organization has spent a considerable amount of resources reconciling multiple patient portals within its diverse health system. Also, the proliferation of portals from the provider and payer side alike is creating its own breed of confusion, Spooner says.

Moreover, patient matching and identification is a constant headache. “Since we do not have a patient identifier, how do you know what you’re sending from a smartphone really ends up in your health record?” Spooner says patient safety issues come into play with mismatched records so Sharp Healthcare is spending “a lot of money” clearing up matching issues.

Technology Readiness

In the meantime, the question remains whether health IT is sophisticated enough to position consumers behind the wheel of their care.

Launched in 2001, the Washington, D.C.-based Consumer Driven Health Care Institute (CDHCI), represents companies that seek to deliver healthcare models and technologies to healthcare organizations that empower individuals to make informed choices.

The institute is guided by the following beliefs:

• Consumers will work with their physicians and healthcare providers to create a better outcomes for themselves and their families.
• Healthcare usage is more cost efficient with consumers who use information tools.
• Price and quality transparency about healthcare professionals is a key method for effective consumer healthcare choices.

“The technologies that are being deployed by members of our organization are at the core enabling individuals to make decisions for themselves,” explains CDHCI Executive Director David Randall, PhD.

In particular, he says there has been a “great explosion” in mobile technologies that its members are developing for their client base. These are becoming essential to technology platforms that deliver real customer engagement.

Topdjian says larger entities are actively fixing problems with data integration and more resilient infrastructure while delivering consumer friendly functions and tools for patient engagement, such as clinically integrating technologies like remote monitoring and telehealth.

Every week, it seems, a new company is emerging with a technology that it feels could be a game changer in the industry.

“There are several hundred telemedicine pilots in some of the major institutions, but we’re not still clear on what solutions ultimately will prevail. Over time, we’ll see a handful of winning technologies that are going to stick,” he says. “There is a bubble going on in the remote monitoring space, but once we get through the current phase, we’ll likely end up with a more consistent and rational way of engaging consumers both on the administrative and clinical sides.”

Despite Sharp Healthcare’s progress the past few years, “truthfully, we’re at an early stage,” says Spooner of technology supporting the consumerization of healthcare.

The EHR is intended to move the patient's record of care online and improve quality and access to care. While the current software supports the basic needs, another generation of development is needed to ensure usability of the software by caregivers, he says.

Spooner says today its portal encompasses its medical groups and collateral care, and in the future ACOs may need to develop a universal portal for all involved in a patient’s care, including preventative care. “The whole thing is evolving. We’ve got a lot further to go,” he says.

Transparency & Clarity

The complexity of healthcare far surpasses other industries out there. Topdjian notes that compared to financial datasets, “the order of magnitude is much more complex” for clinical datasets.

This has ramifications for an important aspect of consumerization: informed consumers.

FAIR Health, a New York-based nonprofit, is one of the many organizations working both to educate consumers and provide transparent, timely and reliable healthcare cost data. Its “crown jewel” is a free, online interactive tool that allows consumers to search for the estimated usual and customary out-of-network costs for healthcare services in their geographic area.

“Cost transparency is the buzzword out there. But while everywhere there is a need for transparency, we also think about the importance of a move to greater clarity,” says Robin Gelburd, JD, FAIR Health president. She cites a recent Harris poll in which the majority of adults could not even define or understand the meaning premium, co-pay and deductible—basic concepts in insurance.

Among FAIR Health’s activities are its Reimbursement 101 class, which consists of 20 chapters that break down the reimbursement systems—everything from the difference between HMO and PPO and out-of-network pricing. “It’s a rich, educational platform that gives consumers the vocabulary and fundamentals to understand data,” she says.

Healthcare cost transparency, in the meantime, remains an indispensable part to a transformation to truly consumer-centered care, she says.

“Providers recognize that the train has left the station and that this is going to be part of the conversation because of the added financial burden on patients,” Gelburd says. Failure to act may undercut goodwill between patients and providers, and lack of fostering patient trust can, in the end, negatively impact a provider’s bottom line.

Topdjian agrees that the industry should provide cost information. “That’s going to be key to a consumer-centric model and consumers will be demanding it. Providers that are more progressive are going to look at cost transparency as a means to get market share,” he says. However, challenges abound due to the complexity of pricing in an industry where consumers pay different prices depending on their insurer.

Spooner agrees that patients naturally are demanding better price information, but with multiple buyers, it’s a challenging undertaking to get that data to consumers in a healthcare setting. “It would be more successful and better for the patient if we can figure out ways to get the prices displayed.”

However, in an aim to increase visibility, payers are advertising on websites that their fees are comparable to the schedule appearing on the FAIR website. “We’ve been used in a marketing manner,” Gelburd says.

As a consumerized industry, providers need to engage patients in a productive dialogue with patients, referring them to sites like FAIR Health to help them understand their illnesses and conditions, as well as the price tag to treat them. This requires understanding the full range of tests and procedures needed to treat a condition as a whole and not just individual procedures, says Gelburd.

“It is helpful for the patient-provider relationship and to avoid a constrained relationship.” But, consumers are not off the hook. They still need to do their homework, she says.

As one of its core beliefs, CDHCI companies are actively working on technology platforms for deployment and use across both insurers and public spaces that enable better cost transparency, Randall says.

“We’ve made strides in the public sector, especially on the Medicaid and Medicare sides of price disclosure,” he says, “but, we obviously have a long way to go.”

The Role of Meaningful Use

Meaningful Use (MU) Stage 2 requires that 5 percent of patients be able to electronically view, download and transmit (VDT) their health information. From that end, the government is pushing for consumers to become larger players in their care. 

Spooner feels the VDT rules should reflect different expectations for physician offices and hospitals.

On the physician office side, “we’re well over 5 percent.” The hospital side has proven more difficult, as it’s less common for patients to be able to VDT their health record while in acute care for a short duration. “This is not as intuitive. I’m skeptical for ROI on the hospital side because it’s, in some ways, almost an unnatural act for patients to do things online.”

Spooner says the 5 percent threshold is inadequate for physician offices. He feels that half of physician office patients should be able to VDT their health records—especially for a true consumer-centric system. 

“It is logical workflow and it’s a way we will all expect it to work,” he says, noting that members under 30 years old especially harbor expectations that providers offer online access to their health records.

Topdjian says MU is a start, but not the only motivator for organizations seeking to become more patient-centric. With the combination of legislation pushing the industry along, the economic pressure for better integration and actual structural changes (i.e., consolidation) in the industry, the components inevitably will pull together a system that puts the patient front and center.

 “We are seeing a level of pressure that is leading to industry-wide collaboration and consolidation that I haven’t seen in my 25 years in the industry,” he says.

Business & Strategy

Spooner says health IT strategies at Sharp Healthcare directly react to business needs.

His department has been involved in finding ways to automate different payment methods like managed care plans and bundled payments to help achieve business goals. “We try to show the business leaders how they could be successful, improve care and show that fundamentally we are there to support them.”

For that reason, Sharp Healthcare did away with an IT strategic plan more than 15 years ago. “Our IT strategy is now embedded in our overall strategic plan.”

Providers that aggressively tackle topics like end-to-end consumer engagement and collaborative platforms that link clinicians and put patients in the middle of care “are going to be the market leaders,” Topdjian says. “Providers that do not think about the consumers from the perspective of becoming a major force in healthcare are going to be left behind.”