Imagine a healthcare system where everyone in the U.S. is a knowledgeable, savvy consumer of medical services. And imagine they play an active role in purchasing and consuming the services they receive. With the advent of healthcare consumerism, it may be here sooner than you think.
What is Healthcare Consumerism?
Healthcare consumerism is a movement to make the delivery of healthcare services more efficient and cost-effective. It 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. Furthermore, patients generally don’t like shopping for healthcare or managing their own health information. Instead, patients 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, from the provider’s perspective, healthcare consumerism 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, with the majority being seen in those aged 75+, potentially those who need it most.
- The pandemic accelerated growth and experience 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 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.
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, 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.