In addition to guest posting on the UpCity blog, Smith and Jones is featured as one of the Top Healthcare Digital Marketing Agencies. Check out their profile here.
No topic in healthcare marketing gets as much hype as consumerism. Certainly, we’re seeing consumerism touch the industry in many ways. The internet has given patients unprecedented access to troves of information they’ve never had before, and that’s helped people become more knowledgeable about what ails them. Meanwhile, HDHCP’s have given patients some sense of the true cost of care. And now, in an effort to reduce their own costs, employers are more actively fostering consumer behavior by helping employees price shop care options.
With all this (and much more) activity, it’s easy to think that consumerism is well on its way to infiltrating the healthcare system from top to bottom. But I’m not so sure that’s the future. From what I can tell, there are a number of things that will get in the way of true consumerism throughout the industry. Healthcare, after all, is a unique industry, and certain of its traits will almost certainly inhibit consumerism’s reach.
Here are 4 roadblocks that will keep consumerism in check.
The kind of casual shopping behavior that’s a hallmark of consumerism does not apply to situations in which the need for care is an emergency. Imagine a kitchen accident that results in a severe laceration. In that situation, a patient (or caregiver) will drive to the closest location. There’s no time to consider whether an urgent care facility might be cheaper than a hospital ER. It’s similar for almost anything that requires an ambulance trip. Once inside the ambulance, the driver bears most (if not all) of the responsibility for choosing where to deliver the patient. The patient’s preference becomes irrelevant.
Decisions about healthcare are emotionally heavier than decisions about any other purchase. While buying a car or a home may carry a price tag similar to other traditionally “big” purchases, neither of those purchases holds a candle to the emotional strain of choosing a heart surgeon or oncologist. To a patient, a decision like that can very much feel like a life or death one. Price shopping, in situations like this, can feel crass and cold.
Lack of competition for advanced care
Big markets like the greater New York City area have lots of options for advanced care. With more than 23 million people calling the region home, there’s enough demand for advanced health care services to keep numerous systems in business.
Contrast that with smaller communities like Plattsburgh NY, a 5-hour drive from Manhattan. The Plattsburgh area is home to just over 81,000 people, 284 times fewer than NYC. In Plattsburgh, there’s one health system. If patients’ needs aren’t met by this system, the next best option for advanced care is two-and-a-half hours away. Not exactly practical for something like ongoing treatments for rare cancer. This lack of competition all but eliminates a patient’s ability to ‘shop’ for care.
Insurance shares the cost
As long as health insurance shares part of the cost burden of healthcare, consumerism will never fully penetrate the industry. Even as deductibles shift big portions of the burden onto consumers, certain health care services will remain impervious to consumer price sensitivity.
Imagine a patient evaluating his options for getting gastric bypass surgery. On average, this procedure costs $23,000. If we assume that prices from providers in this patient’s area vary as much as 30% up or down, this patient will have options that cost between $16,100 and $29,900.
Now consider the average insured American’s deductible. As of September 2018, it was $1,491. If our patient is average, then the total actual cost of a gastric bypass from any provider in his market doesn’t matter to him. He will hit his deductible as soon as the cost reaches $1,491. For this person, there’s no motivation to shop the cheaper procedure. In fact, there’s a counter-motivation for him to seek the absolute best, most comfortable treatment available since it won’t cost him anything.
Truth and fiction
When it comes to consumerism in healthcare, marketers must first separate the hype from reality. There’s been so much published on the topic that it can be hard to figure out what to believe.
One way to get at the truth is to consider consumerism’s effects on a service line by service line basis. Health systems are complex organizations, and consumerism will affect different parts of the organization in wildly different ways. You can expect consumerism to affect high-demand services like primary and urgent care more than low-demand services like specialized care. You can also expect it to affect service lines in which there are many competitors more than those in which there are few.
I agree with Mark Bogen, senior VP of finance at South Nassau Communities Hospital, who said: “I still believe it’s crass to call them consumers.” Referring to patients as consumers ascribe a number of inaccurate and demeaning traits to people who need help with their health, one of the most important and complex things in their life. We shouldn’t be seeking to create consumers of healthcare any more than we should be seeking to create consumers of relationships. The idea that either of those things is interchangeable or disposable robs them of the substance that gives them value in the first place.