What is Healthcare Consumerism?

What is Healthcare Consumerism?

Healthcare consumerism can be described as the empowerment of the patient. It’s an economic model that marks the shift from “fee-for-service” to value-based care.

It also reflects patients’ changing role from passive patient to a more active participant in their healthcare.

However, don’t mistake healthcare consumers the same as patients. Though patients are becoming more engaged with their health it doesn’t mean the terms can be used interchangeably.

Healthcare consumerism centers on the patient’s desire for transparency and choice. What does it look like? Healthcare consumerism involves:

  • Transparent data; consumers are able to view statistics like patient satisfaction, quality of care, readmission rates, and so forth
  • Providing patients with the tools they need to understand their health, the healthcare industry, and the costs associated with healthcare services
  • Patients having the freedom to choose their health insurance and healthcare providers
  • Patients having access to their medical records

In the past, patients’ choices were limited by insurance coverage and the accessibility of the care or services they needed. Modern technology has made patients more health-aware and granted them access to the knowledge they need to make savvy decisions regarding their health benefits and providers.

It used to be that the industry model was “the patient does what the doctor says.” Healthcare consumerism has flipped this dynamic on its head and has increased overall patient engagement. Patients are becoming more involved in their health and well-being.

Consumers now demand a working partnership with their provider, in the same way they want a working partnership with a product or service provider.

Healthcare consumerism, then, encourages patients to “shop” for the right fit of quality and affordability. In fact, as we’ll explore in this article, the healthcare industry is increasingly looking to the retail industry for ideas on how to meet consumers on their terms.

It can be a challenging new landscape to navigate, but healthcare consumerism is here to stay. Below, we’ll take a look at the rise of healthcare consumerism, as well as the advantages and disadvantages of it.

Healthcare Consumerism: Where Did it Come From?

Patients want to be involved in their healthcare decisions.

That may have always been the case, but it’s especially true today as patients are required to shoulder more and more of their medical bills.

The Patient Protection Act and Affordable Care Act shifted the financial burden to many consumers, leaving them with much larger deductibles. In fact, out-of-pocket payments increased by almost 230% between 2006 and 2015 (Kaiser Family Foundation). That added weight has led consumers to shop for healthcare services the way they do for any other kind of service.

It’s no wonder that “59% of U.S. consumers expect their healthcare digital customer experience to be similar to retail.” In other words, patients are demanding fast, reliable, and affordable options.

This is part of a larger trend we’ve seen in business over the past few decades: power has shifted into the hands of the consumers.

The driving disruptor? Technology.

The digital world has put a wealth of information at our fingertips—information that wasn’t as easily accessible before the advent of the internet. If a consumer doesn’t enjoy their experience with a business, a competitor’s product or service is just a click away. And they may leave a scathing review that will discourage other consumers from engaging with a business.

Likewise, if the patient experience is poor, patient retention will be, too.

As a result of this changing dynamic, businesses have had to adapt the way they market and sell: Namely, they must meet the consumer on their terms if they are to stay in business.

All of this now applies to the healthcare industry. Enter healthcare consumerism.

The Advantages and Disadvantages of Healthcare Consumerism

By empowering the patient, healthcare consumerism has had some positive effects such as:

  • Increasing transparency in the healthcare market
  • Improving quality of care
  • Driving down the costs of medical services
  • Creating a plethora of marketing opportunities for practices to differentiate themselves and earn more business as well as patient loyalty.

Once upon a time, people seeking healthcare might have turned to friends and family for recommendations. Up until a few years ago, there still wasn’t a lot of information available on the web regarding individual practices or doctors.

Today, a quick Google search will turn up a plethora of information (and often reviews) regarding the facility or person in question.

In some ways this is advantageous for a patient because the digital world forces practices to be transparent; to some extent, they’re held accountable by the reviews and data on the internet.

In other ways this has hindered patients. Whereas before they only had to take into account a few items—insurance coverage and where they could get the particular care they needed—nowadays they have access to information like readmission rates, physician experience, and even individual doctors’ “care philosophy.”

It can be overwhelming, especially considering that people in search of care may be highly stressed depending on the nature of their illness. In fact, patients are eager to be cared for by an efficient and effective healthcare system that respects their preferences.

As those in the healthcare industry are quick to point out, choosing a provider will never quite be the same as choosing a car. There are some definite disadvantages:

  • “WebMD-literate” patients may not heed professional advice
  • Patients may become frustrated and confused with healthcare jargon (which they must learn in order to make informed decisions)
  • Difficulty with patient retention if the patient experience isn’t optimized

Regardless of its advantages and disadvantages, healthcare consumerism isn’t going anywhere: patients have redefined the industry. What they have created looks a lot like the retail industry.

What Healthcare Consumerism Means for Your Practice

As CBRE Senior Vice President Bryan Lewitt said at Big West Coast Healthcare: “Healthcare is definitely the new retail.”

What does that mean for your practice? Just as in retail, a successful business is successful because it focuses on the consumer experience—the patient experience, in this case.

The healthcare industry needs to meet consumers where they are and that means:

  • Being transparent
  • Being accessible (both digitally in terms of portals, and physically in terms of hours)
  • Adapting a working partnership approach; patients don’t want to feel like a number to be crunched, they want more of a human touch
  • Streamlining the medical billing and collection process
  • Providing flexible payment options

It’s clear that the healthcare industry is taking a page out of the retail’s book. In fact, proven technology solutions from retail are helping the healthcare industry meet the changing demands of patients.

With innovative payment solutions and financial services tailored to the needs of the healthcare industry, SaaS technology is bridging the gap between providers and patients. Want to learn more? Check out our article on how automated payments helps practices increase collections.