While true consumerism in Healthcare is still in its infancy, there is little question as to the direction in which the winds are blowing. It is an eventuality that Healthcare consumers will become knowledgeable and sophisticated, and as they do, their purchase preferences (expectations) will evolve and become vastly more complex. The increasing share of costs born directly by the consumer is driving more and more sophisticated purchase and trade-off decisions. According to a 2016 McKinsey study, consumer choices had the potential to impact 61% of all Healthcare spending. The WHO Global Health Expenditures Database pegs consumer-controlled, out-of-pocket spending in the US at $330 billion annually.
While that does not mean the average provider organization must deliver an Amazon-like experience overnight, it does shine a light on the capabilities these organizations must develop to thrive in the future. At the core, providers must develop keen awareness and deep knowledge of their patients. As summarized in a recent American Hospital Association paper, providers must be able to answer “How many unique consumers do you touch, who are they, what do you do for them, and how is that working for them and you?”. Truly knowing this information will have massive implications on a provider’s ability to:
- Acquire new patients
- Develop Loyalty and Retain those patients
- Ensure they are satisfied with the experience
The last point is increasingly more associated with bottom line impacts as Patient Experience measures factor into scoring systems for Value-Based programs (both Medicare/Medicaid and private payor-based).
It is time for Healthcare to take a page from many other industries where highly competitive markets have accelerated the evolution of consumer engagement, and the fight to gain consumer preference is intense. Some even suggest that it may be an existential issue for Healthcare concerns:
As consumerism in healthcare approaches, I think the healthcare industry’s adoption rate to this trend will determine those that thrive and those that are either shuttered or become part of a larger system that has addressed their customer engagement strategies.
– Jake Dorst, Chief Information & Innovation Officer, Tahoe Forest Hospital District via Becker’s
Knowing your customer and catering to their preferences in order to acquire and retain more effectively, is fundamental across most industries (B2C and B2B). Yet, in Healthcare, there seems to be limited focus (and limited results). A McKinsey survey show that many American consumers today have weak preferences for specific providers across a broad spectrum of Healthcare services:
Source: 2016 McKinsey Consumer Health Insights Survey
Some of this apparent lack of loyalty could logically be attributed to the nature of Healthcare itself. As Physicians for a National Health Program suggest in a recent article, Healthcare consumers do not want to shop for Healthcare. They do not want to know the details and have a favorite brand. They simply want to feel better.
This is perfectly sound reasoning when thinking of acute situations, but for all other cases, especially with the steady growth in Healthcare costs, Consumerism in Healthcare is a real.
So, what do providers need to do to prepare themselves?
There is no one magic bullet solution, but there are some fundamental lessons Healthcare can take from other industries in terms of ensuring they have appropriate Information infrastructure to answer those basic questions about their consumers. According to CRM Magazine, 91% of American companies with more than 10 employees have implemented a Customer Relationship Management (CRM) system. Why is having a CRM table-stakes for most businesses? For the answer, refer back to the basic questions that the AHA suggests providers must be able to answer:
- How many unique consumers do you touch?
- Who are they?
- What do you do for them?
- How is that working for them and you?
These answers are must-haves for almost all businesses engaged in any competitive market. And while Healthcare certainly stands out as a unique market, from consumers’ perspectives, it is slowly becoming more like most others. Accordingly, providers should look other industries who have already undergone their digital transformations for cues, and a CRM is a great place to start.
CRM is the logical starting point because it precisely answers those key questions that enable providers to truly know their consumers. It is the proverbial “360-degree view” of the customer and much more. It gives providers new insights on their patients (and prospective patients) as well as the appropriate tools to engage and serve them in the ways that sophisticated consumers have come to expect.
Of course, CRM is not a panacea. It is, however, a foundational element that should be present in any provider’s technology ecosystem. Today, specialized Healthcare implementations of CRM are offered by major vendors, for example, Salesforce’s Health Cloud solution. Connected to the EHR / EMR, it is a powerful tool that puts providers in the right position to meet the rising tide of Consumerism in Healthcare head-on.
At MST, we have helped our Healthcare partners ready their organizations through implementation of Salesforce Health Cloud as well as architectural design and development of enterprise integration solutions to marry their various sources of customer data / interaction. For more information on how we can help, please contact us.