After 40 years of status quo in the U.S. healthcare system, the changes that have descended on the system in the past five years have been like speeding down the Autobahn after driving on a slow country road. Nearly all of these changes, in one way or another, are due to the 2010 passage of the Health Information Technology for Economic and Clinical Health (HITECH) Act and the Affordable Care Act (ACA, and commonly referred to as ObamaCare).
Every time I told someone I was writing a book about the healthcare consumer, without fail they would want to tell me their experiences. I learned that everyone has an opinion or personal story about ObamaCare, the part of the ACA that has to do with individual insurance. I’ve included some of the stories that illustrate the bumpy ride that consumers have gone through during the implementation of the ACA.
A big threat to ACA came when specific wording in the law created a question on whether individuals who purchased insurance on Healthcare. gov were eligible to receive subsidies for their premiums. The Supreme Court ruling in this case, King v. Burwell, decided that subsidies were available to individuals whether they purchased insurance on a state-run exchange or the federal marketplace, Healthcare.gov.
Even though this threat is gone, the consumer still has many questions. The purchasers of individual health insurance are still trying to figure out the letters from insurance companies that say their plan has been discontinued and switched to a new plan. After all, switching plans isn’t the same as switching cars—the plans may not have the same network of physicians and hospitals, which is usually the first thing a consumer looks for after cost. The ride isn’t over yet because some of the Act’s provisions were postponed due to intense lobbying and deal cutting in Washington, DC. This is a presidential election year and the Republicans vow to repeal ACA should their candidate take office. That would severely disrupt the sensitive changing health ecosystem. The important question on everyone’s mind is: What would replace the ACA?
Threats of repeal aside, ACA still needs to stabilize and smooth out in many spots. While Healthcare.gov, the official state insurance marketplace for states, had a very public disastrous rollout in its first year, it has fixed most of the problems and continues to make improvements as it finishes its third year of enrolling individual consumers. Only 13 states and the District of Columbia have their own marketplace exchanges, while the remainder rely on enrollment through Healthcare.gov in some way. Oregon, Nevada, New Mexico, and Hawai‘i started their own state-run exchanges, but gave up and turned over enrollment duties to the federal exchange while maintaining responsibility for all marketplace functions.
Another casualty of fiscal cliff talks is the consumer operated and oriented plans (CO-OP) program that opened in 23 states with health insurance exchanges in 2013. The CO-OPs were created to serve rural and harder-to-reach populations that have little coverage by employer-based insurance. The people who initially joined the CO-OPs were expected to be the uninsured who were sick and needed care; the people who drive up the premiums. Some of that cost was offset by the risk-corridor program, which gives CO-OPs financial padding to keep premium costs down. Only 11 of the 23 CO-OPs that began in 2013 remain operational at the beginning of 2016, mostly due to the federal cuts in the risk-corridor program.
With widespread use of technology, consumers’ expectations are rapidly changing. Recently, I was on a plane to San Francisco, seated next to a woman who worked for Intel’s research and development division. When I told her that I was a consultant in healthcare information technology and customer experience, we immediately bonded as mothers who must interact with the healthcare system on behalf of our children. She told me a story about her 13-year-old daughter who recently had a rash. It was the weekend, so like many moms, she could tell it wasn’t an emergency and waited a day to see if the rash would go away on its own. When it didn’t, she called the doctor’s office. The nurse said that she couldn’t tell from the description what it was and she needed to bring the child in. “Really?” said the mom, “I can just take a picture of it and send it to you.” Sadly, the response from the nurse was, “We’re not equipped to handle that.”
“I just wanted to know whether I could buy something over the counter in the drug store instead of taking the time to go to the doctor’s office where they will tell me the same thing,” she told me. “We have a very busy family schedule and taking two or three hours to go to the doctor’s office is difficult when my daughter is not really sick. Why can’t they look at a picture and tell me what to do?” She had a phone that could take a picture and send it immediately to the advice nurse. Clearly, it was not a technical issue to receive the photo, since any smartphone or laptop or computer could do it. The problem was that the healthcare office did not have a process for accepting the picture and acting on it. She was obviously very frustrated by the experience.
It is exactly these types of consumer and patient encounters with the traditional healthcare system that is creating the demand for new methods of healthcare delivery. Convenient, simple, and quick are the battle cries of the new health consumer.
Healthcare needs to learn from other industry models what the consumer wants. For example, BMW, a 100-year-old company, is making moves to get younger customers, since their average customer is 55 years old. They know that many young people are more interested in a smartphone than a car, so they decided that they needed to get future customers into their cars in order to experience a BMW and influence their choices when the time comes to buy a new car. They instituted a pilot program in large cities that allows customers to pick up and drive a BMW from a pool of cars strategically located around the city. Their aim is for the service is to be fast, convenient, and simple. Hospitals could try to improve the experience for consumers by checking into a hospital online. The consumer could also be prepared for procedures using a video walkthrough of what will happen once they walk through the hospital doors through discharge.
The transformation of the healthcare system means that healthcare purchases are changing from patients who go to the hospitals and labs that their doctor recommends into retail consumers who shop for the services that they need while keeping an eye on quality and price.
Quick, fast, and instant are not new adjectives to consumers. Why else do we have instant oatmeal, microwave meals, and fast food restaurants? Our cars can get an oil change at Jiffy Lube and we can check out potential suitors with speed dating. The daily lives of families and individuals move at an increasingly faster pace in an attempt to get more done in a day. Fast is not an adjective associated with nonemergency healthcare, but change is on the horizon. In the past, it was faster and more comfortable to wait for the doctor to come to our homes than to go to an emergency room (ER) of today’s hospital, where it is common to wait hours to be seen by a physician.
This book is intended as a tool for people in the healthcare industry trying to understand the past, present, and future of the healthcare landscape. In the first chapter, I describe the five key drivers for the shift from patient to consumer, introduce you to the healthcare consumer’s profile, and give an overview of the healthcare landscape today. The second chapter discusses the challenges that came from moving the industry from paper to a digital system. Chapter 3 looks at how and why we pay so much for healthcare insurance, who makes up the newly insured, and cost shifting. The new modes for healthcare delivery including speed clinics, my term for convenience clinics found in retail spaces, are discussed in Chapter 4. Chapter 5 presents the Healthcare Consumer Manifesto; it is what I believe consumers want from our healthcare system. Also included are profiles and differentiating factors of that make up the new consumer.
In this digital age, there are many new ways to communicate with consumers, which is discussed in Chapter 6. Transparency—and the lack of it—are covered in Chapter 7. Technology—telehealth, health information exchange, and privacy—are the topics for Chapter 8. How our aging population will be able to stay at home with the help of technology is covered in Chapter 9.
There are a lot of data that healthcare can use from many sources now that patient data are digital. Chapter 10 discusses hyperdata, the precision medicine initiative, predictive analytics, and a bit about qualitative and quantitative research. The last chapter presents my thoughts of where technology can take us in the foreseeable future.
The “True Stories” in the book were told to me by those who experienced the situation firsthand. As a very healthy individual, my encounters with the healthcare system were mainly through obtaining care for my father who was three weeks shy of 99 years old when he died. I’ve added my own stories from acting as the point person for him whenever he was hospitalized.
Throughout the book, I offer practical Transformation Tips for ways to get started moving your business to align with the new consumer’s needs and expectations. These tips come from 30 years of experience in the healthcare and technology industries. The appendix lists the URLs of websites mentioned in the book.
Change is on the horizon to meet the demands of the new healthcare consumer. I hope this book helps you to increase your business’s success by preparing for the new consumer.
Although it was a challenge to stay abreast of the rapid changes in healthcare to keep the information in this book current, it has been very exciting to write about healthcare and its very visible transformation.
Note: I have randomly used “he” and “she” throughout the book when gender is irrelevant.