By Euna Mahtab
McKinsey’s latest healthcare consumer research suggests that consumer engagement can enhance care access, quality, and affordability. However, to be successful, it requires intensive collaboration with the consumers and innovation towards a more tech-savvy healthcare industry.
Through vigorous research and data collection, 4 key themes emerged.
Affordability- The affordability of healthcare continues to be one of the most pressing consumer concerns and needs
Continuity- Many consumers lack continuity in their healthcare ecosystem (e.g., in care delivery or health insurance)
Digital- An increasing number of consumers are using digital healthcare tools, and interest in greater digital engagement continues to rise
Engagement- Consumers are willing to engage in solutions to reduce healthcare costs, but most believe that they cannot do so today
Together, the findings deliver a clear message: The healthcare industry should offer more to the consumers. When survey respondents were asked what would make a healthcare company “the best,” coverage was ranked as most important, followed by customer service, cost, and access. Such basic “asks” would be an uncommon subject in most industries. In fact, when the respondents were queried about which companies healthcare organizations should be like, they selected tech-focused innovators such as Amazon, Google, and Apple, as well as high-performing retailers (e.g., Chick-fil-A and Walmart). The types of interactions and relationships consumers have with these companies strongly suggest their preferences in the healthcare industry.
As of today, healthcare organizations have a long way to go.
Prescribed Pricing
The affordability of health care is very important to the consumers. For example, when respondents were asked what frustrates them most in healthcare, the top three answers related to affordability—the difficulties they faced in understanding basic medical costs, determining whether a treatment would be covered, and comprehending their bill.
Overall, 72% of the respondents expressed concern about at least one type of healthcare expense. However, concerns over affordability have decreased since 2009. On the other hand, concerns about non-routine expenses—such as those related to end-of-life and long-term care—have increased.
These concerns appear to affect consumers’ perceptions of access to care. 20% of the consumers surveyed said that they do not receive all the care they need. Of those, 60% cited cost as the prohibitive factor.
Similarly, in a separate 2017 survey conducted among consumers with individual insurance, respondents were asked to identify the three factors that were most important to them when choosing a health plan. Majority prioritized affordability.
Consumers are, however, willing to make trade-offs between what must be included in health insurance and what they might have to give up to obtain the features they want most. In the CHI survey, hospitalization and emergency department (ED) care were chosen most often as the features that should be retained in a health plan whereas coverage for pregnancy and childbirth was chosen least often by the respondents as a whole.
Long-term Solutions
Many consumers do not have continuity in their healthcare ecosystem, whether the ecosystem is defined as insurance coverage or care provision. For example, only 43% of the new Medicare enrollees in the survey had previously had commercial group insurance. Among the new individual market enrollees surveyed, two-thirds had transitioned from group insurance.
Similarly, continuity in care delivery is declining—the percentage of respondents who reported having primary care providers has been gradually dropping, from 87% in 2011 to 79% in 2017. At the same time, the use of retail clinics has steadily grown.
Techno-gram- the Emergence of Digital
Increasingly, consumers prefer digital tools to be an eminent part of healthcare delivery. For example, most of our survey respondents preferred digital solutions to phone/in-person solutions for many healthcare interactions. Furthermore, 89% of the respondents said they were alert about digital appointment reminders; 55% said they had used them. As awareness of other digital tools increases, adoption is predicted to rise too.
At present, the use of digital tools is lower in healthcare than in many other industries. For example, only 49% of the respondents said they had used the technologies offered by their health insurer. The primary ways the consumers have been using health insurers’ technologies were to update personal information, find out what benefits are included in their plan, and identify the physicians and hospitals in their plan.
The Patient Comes First
Consumers want to be better able to make decisions to address their needs (e.g., affordability). Even those with good insurance coverage repeatedly indicated that they want to be good healthcare consumers who can make informed choices about the care they receive. Unfortunately, most believe they will not be able to do that today.
To help consumers reach this goal, the healthcare industry will need to engage with them more often and in ways which channel results. The collaboration will be crucial. Three ways through which health insurers and providers could potentially make consumers a part of the solution to lowering health care costs are:
01. Improved education – Many consumers don’t understand health care costs, leading to uninformed decision making.
2. Improved navigation – Consumers often use healthcare inefficiently, which drives up costs.
3. Better incentives. Consumers say they are willing to change their behavior if it reduces their costs (Exhibit 8). Better incentives could help accomplish this.
Implications for the Industry
The healthcare industry has an opportunity to address the concerns of, and engage with, consumers in a way that is win-win for both consumers and the industry. For example, many of the concerns about affordability raised relate to a lack of transparency or understanding. Health insurers and providers have an opportunity to improve their information provided to patients about the potential cost of care. Consumers who can understand both the total cost of care and the fraction of those costs they will be responsible for are in a better position to decide what types of care they need.
While consumers are deeply concerned about the affordability of health care, they also care about coverage and experience. The new portfolio of products should be flexible enough to account for the fact that consumers’ need changes as their lives evolve, and that consumers will often require assistance as they transition from one form of insurance to another.
Consumers’ increasing willingness to use more modern healthcare providers is creating opportunities for innovators/disruptors, as well as more challenges for incumbents. For example, managing the total cost of care will be more difficult when patients do not have a consistent relationship with a primary care provider. Incumbents will need to think through how to engage with consumers at the location and time of their choice to maintain the continuity of relationship leading to better healthcare provision.
It is also clear that today’s consumers expect better digital engagement. A growing number of consumers think that healthcare organizations should offer them digital tools at par with those offered by companies in other industries. In addition, healthcare organizations should take steps to better inform consumers about the digital tools already available, since awareness correlates with use. Health insurers and providers that ignore the lessons from tech companies may risk being usurped by new players in the healthcare arena.
Finally, collaboration with consumers is crucial for controlling healthcare spending. Health insurers and providers have multiple opportunities to engage consumers and help them manage their health, healthcare, and healthcare costs. By using digital tools for just-in-time, on-demand engagement and offering meaningful incentives, insurers and providers can truly collaborate with consumers to change behaviors and improve public health.
Source: Mckinsey
