Jul 31st 2020

Staying Competitive in the Age of Growing Healthcare Consumerism

More than ever, American consumers are becoming engaged in the delivery and quality of their healthcare. And because of the higher level of cost sharing, they're more proactive and selective in making their choices.

 

This rising healthcare consumerism brings health insurance plan providers to a crossroads. To remain competitive in a consumer-driven market, providers need to pay closer attention to the requirements—and preferences—of an audience they previously may have taken for granted.

Trends driving healthcare consumerism

 

When the Affordable Care Act implemented healthcare exchanges, it gave consumers more choices for health insurance plans. Surveys and analysis by McKinsey & Company found that consumers using marketplace exchanges have shifted their buying attitudes over time. The premiums now play a smaller part in their decisions, and buyers give more weight to criteria such as “best value” and convenient access to the provider network.

Choices in Medicare plans also play a role in consumerism among the growing ranks of aging baby boomers. While cost is still an important consideration, Medicare enrollees say that factors like provider accessibility, insurer reputation, add-on services, and customer service are also important.

Additionally, the economy impacts patients' desire to better manage their healthcare costs. One example is out-of-pocket expenses, which represent the largest category of household healthcare expenditures (37% share). The United States has the second-highest average out-of-pocket spending per capita, nearly doubling in the last four decades.

In a 2019 survey by TransUnion, 62% of the 2,500 respondents said that knowing their out-of-pocket expenses ahead of time impacted the likelihood of their pursuing care. The millennial and Gen Z generations in particular are the most proactive, conducting the most research before making healthcare decisions.

Healthcare providers are adjusting

 

Healthcare providers are trying to catch up with shifting consumer expectations. According to a 2019 KaufmanHall report, 81% of the 200 surveyed healthcare executives identified “improving customer experience” as a high priority. While only 8% have focused on building a customer-centric infrastructure, 24% said they were investing resources into becoming more consumer-centric, and 39% began targeting specific strategies.

Some of the top strategies included:

·       Improving the customer experience

·       Using digital tools to engage consumers

·       Offering better, more convenient access to care, such as walk-in hours and online self-scheduling.

While change is slow, providers will continue to feel pressure to meet their patients' growing expectations—further driving consumerism.

How health plans can compete

 

Health plans must also raise the bar to remain competitive in the consumer-driven market. This is a special challenge because in the past, insurance companies haven't had to cater directly to the consumer audience. Yet this niche is different from the employer category, and requires new ways to communicate and interact.

Here are some potential strategies:

·       Understand what consumers want and what factors influence their health-insurance buying decisions. Focus your efforts based on this market intelligence.

·       Guide consumers through their choices by providing the right information at the right stage of their buyer's journey. This includes increasing awareness of how their health insurance choices can improve their care.

·       Help change buyer behavior by engaging with consumers through a variety of methods.

·       To impact customer loyalty, look for opportunities to improve their experience and your customer service.  Even small changes that improve transparency and access can pay big dividends as differentiators to an individual consumer market

Healthcare consumerism continues to grow, and insurance plan providers must decide how to adapt. Success depends on it.