Healthcare consumerism is a movement to make healthcare services more efficient and cost-effective. It transforms an employer’s health benefit plan, putting the economic purchasing power and decision-making in participants’ hands. Consumerism aims to enable patients to become wholly involved in their healthcare decisions.
What drives healthcare consumerism?
Customers can access features, benefits, and cost comparisons in most industries to guide their purchasing decisions. In contrast, the healthcare industry presents many choices, contact points, and service flows with little to no upfront pricing information. Healthcare consumers expect the same levels of care and service they are accustomed to in other sectors.
They also want to take responsibility for managing their health. Yet, most feel they need more information and tools to do so. Some plans don’t ask much of participants regarding how they consume healthcare services. Choosing and paying for medical services can prove so daunting that patients decline treatment to avoid confusion and expense. To make better decisions, consumers are increasingly expecting – and demanding – better information and more transparency from their healthcare providers.
The definition of consumerism is to provide better healthcare and improve patient outcomes while reducing costs and driving efficiencies throughout the healthcare industry. To develop conscientious healthcare users, health plans and healthcare professionals need to provide more information, financial incentives, and decision-making tools to enable consumers to make educated purchasing decisions.
Consumer-directed healthcare accounts
Three components of employer-sponsored healthcare benefits are central to healthcare consumerism. These are Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs), and Health Savings Accounts (HSAs). Each tax-advantaged account allows participants to use funds set aside expressly 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. IRS guidelines on eligible products and services require participants to make thoughtful decisions on using account funds. If not, they risk not being able to receive reimbursement (or having to pay back a debit card transaction) for an expense they thought would be covered.
In addition to standard FSAs, HRAs, and HSAs, there are other variations, including qualified small employer HRAs and limited-purpose FSAs, which are also part of the healthcare consumerism landscape.
What lies ahead
Healthcare consumerism has been influencing the American healthcare system since long before the pandemic, but that event helped to accelerate change and set a future course. McKinsey and Company identifies five areas of focus for healthcare companies to improve consumer engagement going forward:
- Providing transparent, understandable information to help consumers make better decisions
- Meeting the whole person’s needs
- Personalizing and enhancing engagement
- Integrating in-person and virtual healthcare solutions
- Delivering a seamless experience across healthcare journeys and coverage transitions
As healthcare moves toward value rather than volume, patient care and service provider compensation will profoundly transform. The state of healthcare is in constant refinement. The continued rise of healthcare consumerism should generate a more efficient, cost-effective system for all.
For 40 years, DataPath has been a pivotal force in the employee benefits, financial services, and insurance industries. The company’s flagship DataPath Summit platform offers an integrated solution for managing CDH, HSA, Well-Being, COBRA, and Billing. Through its partnership with Accelergent Growth Solutions, DataPath also offers expert BPO services, automation, outsourced customer service, and award-winning marketing services.
