Consumers: Their Wish, ITs Your Command

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Consumers Their Wish, ITs Your Command

• Holly G. Atkinson, MD
• Chair, iVillage Health Initiatives
• Editor, HealthNews
• Massachusetts Medical Society
• Assistant Professor of Public Health
• Weill Cornell Medical College

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Bottom line

• The consumer is the customer.

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1 ITs about spending the money.

• Consumers have to pay more.
• Consumers are willing to pay more.

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Premiums are Rising Again
Three year increase 1996-2002 33.3
Annual Change in Average Health Benefit Cost
13 - 20
Source The MedTrend Group/William M. Mercer, 2002
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What Drove the Rise in Costs?
What made up the 13.7 increase in premiums
between 2001- 2002?
Source The MedTrend Group/PriceWaterhouseCoopers
Study, April 2002
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Employers Responses

• Shifted from HMOs to PPOs
• Shifted health premium cost increases to
  employees
• Reduced benefits
• Increased out-of-pocket costs copays,
  deductibles and co-insurance
• Launched Consumer-Directed Health Plans (CDHP)
• In some cases, dropped health coverage entirely

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Number of Uninsured Rising
2009 Estimate 48M 61M if recession
Estimated
Percentage
Millions of Individuals
Source The MedTrend Group/US Department of
Commerce, Economics and Statistics
Administration, Bureau of the Census, 1998
National Coalition on Healthcare, 2002
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Billions and Billions Paid

• Alternative Medicine - 27B in 1997 with 10
  growth since
• Supplements - 19 B up 5x in 10 years
• Diagnostic procedures
• Total body scans
• Online DTC laboratory tests
• Genomic screening
• Quality-of-life therapies
• Cosmetic surgeries 6.9 M procedures
• Laser vision correction 1.8 M procedures

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1 Implications

• Consumers are spending more of their own money
  either because they are forced to or choose to.
  They are willing to experiment and pay for it if
  they perceive a value.
• Nobody spends somebody elses money as
  carefully as they spend their own. -Milton
  Friedman
• Bottom line Consumers will become far more
  discerning in choices. Those who offer them
  cost-effective/compelling choices will win.

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2 ITs aboutmaking the decisions.

• Consumers are becoming medical
• entrepreneurs.
• Consumers have an eight-percent
• solution.

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Entrepreneur

• Someone who runs a business at their own
  financial risk.
• -Websters Dictionary

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Critical Issues in America?
Source The MedTrend Group/ Health Confidence
Survey 2002
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Key Trends Among Medical Entrepreneurs

• Making decisions based on benefits received, cost
  of care and convenience, rather than access to
  preferred physician
• Making decisions on which hospitals to go to
  based on key characteristics, rather than rely on
  physicians recommendation
• Searching for information to support decisions
• Responding to direct marketing

Source Solucient, National Trends in Health Care
Consumerism, 2002
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Most Important Factors in Selecting a Health Plan
Source Solucient, National Trends in Health Care
Consumerism, 2002
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Physicians Role in Hospital Selection
Source Solucient, National Trends in Health Care
Consumerism, 2002
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Most Important Factors in Selecting a Hospital
Source Solucient, National Trends in Health Care
Consumerism, 2002
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Types of Information Researched by Consumers
Source Solucient, National Trends in Health Care
Consumerism, 2002
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Major Sources of Health Information
Source Solucient, National Trends in Health Care
Consumerism The Influential Health Care
Consumer, August 2003
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Responsive to Targeted Marketing
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The Eight-Percent Solution

• About eight percent of the populationapproximate
  ly 17 million individualsmake decisions for
  about 17 of the population and may influence up
  to 33 of entire population.

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Influential Health Care Consumers
Source Solucient, National Trends in Health Care
Consumerism The Influential Health Care
Consumer, 8/2003
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Influential Health Care Consumers

• Spend a lot of time gathering information
• Primary decision makers in household and use
  broader set of criteria than average health care
  consumer
• Above average prevalence of disease in family and
  themselves
• Highly responsive to targeted marketing efforts
  of hospitals and MDs.

Source Solucient, National Trends in Health Care
Consumerism, 2002
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Propensities of the Influencers
Source Solucient, National Trends in Health Care
Consumerism The Influential Health Care
Consumer, 8/2003
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Major Sources of Health Information
Who Use as Source of Information
Source Solucient, National Trends in Health Care
Consumerism The Influential Health Care
Consumer, 8/2003
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Most Important Factors in Selecting a Hospital
Saying Factor Was Very Important
Source Solucient, National Trends in Health Care
Consumerism The Influential Health Care
Consumer, 8/2003
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Who Are The Influential Consumers?

• Age distribution is similar to general
  population
• Income influencers more prevalent at the two
  ends of the income scale, low or very high
  income, but almost 60 have moderate incomes
• Gender 60 are female
• Life stage mothers 18-34 and single women 35-54
  with or without kids, any income level.
• Group is likely to grow as population ages,
  utilizing more services and becoming more
  discerning.

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Strategic Importance of Women
All Ages
Age 65
Age 85
Male49
Male30
Male42
Female51
Female58
Female70
Source US Census Bureau, Resident Population
Estimates of the United States by Age and Sex,
2000
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2 Implications

• Consumers are enlightened and independent, and
  are willing to make their own decisions.
• One of consumers greatest demand is for
  information not just about diseases, but the
  full range of information that one needs to make
  a wise healthcare decision. Dr. Holly Atkinson
• Bottom Line Consumers are fast becoming the
  most important decision makers in healthcare.
  Those who cater to themproviding them with
  critical information and forging a relationship
  with themwill win in the marketplace.

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3 ITs aboutdelivering the goods.

• Consumers expect miracles.
• Consumers demand equal treatment.

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Todays Consumers Are Better Educated and Have
More Money
estimated
Source The MedTrend Group/Institute for the
Future, 1998 U.S. Bureau of the Census, 1996.
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Baby Boomers Driving Demand
1990
Source The MedTrend Group/U.S. Census Bureau,
HCAB 2002
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Expecting a Miracle

• In the US, the baby-boom generation has
  transformed every institution with which it has
  come into contact. As this generation ages and
  begins to have chronic disease, we can expect
  healthcare to be next They have made
  consumerism a way of life The aging of the baby
  boomers and the Internet make up a powerful
  combination that should accelerate the rate of
  change in the healthcare system.
• -T. Lee, NEJM, 344, 26 2001

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The Outcomes Problem Gender

• Women CVD
• 1 killer more women than men have died each
  year since 1984, yet women receive
• 33 of angioplasties, stents and bypass surgeries
• 28 of inplantable defibrillators
• 36 of open-heart surgeries
• Less beta-blockers, ACE inhibitors or even
  aspirin post MI
• Women still only 25 of subjects in research

Source National Center on Health Statistics,
NHLBI and AHA, 2002
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The Outcomes Problem Race

• PHR Panel found over 400 peer-reviewed articles
• documenting racial disparities such as
• Blacks 13 less likely to have coronary
  angioplasty and 33 less likely to have bypass
  surgery than whites.
• Among preschool children hospitalized for asthma,
  only 7 percent of black and 2 percent of Hispanic
  children, compared with 21 percent of white
  children, are prescribed routine drugs to prevent
  future asthma-related hospitalizations.
• Blacks are nearly twice as likely as whites to
  have above-knee amputations for PAD.
• Blacks 27 less likely than whites to receive a
  major procedure for Rx of colorectal cancer.

Source Physicians for Human Rights Report The
Right to Equal Treatment, 2003
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Lack of Awareness

• Physicians do not generally perceive bias in
  the health care system. A Kaiser Foundation
  National Survey of Physicians conducted in March
  2002 found that 55 of doctors asserted that the
  health care system rarely treats people
  unfairly based on racial or ethnic background an
  additional 10 said never. Similar denials were
  found of unfair treatment based on gender, or on
  fluency in English."
• -PHR Report The Right to Equal Treatment, 2003
  _at_ www.phrusa.org

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3 Implications

• Consumers expect consistent, high-quality
  outcomes from their providers.
• Of all the forms of injustice, discrimination
  in health care is the most cruel. -Rev. Martin
  Luther King Jr.
• Bottom line Consumers want quality care.
  Providers must offer both the perception and
  reality of delivering great healthcare at
  affordable prices. They must also track their
  outcomes and publish their statistics.

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4 ITs aboutproviding the service.

• Consumers are connected, and want
• high tech.
• Consumers are people, and want
• high touch, too.

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The Arc of Change

• We always overestimate the change that will
  occur in the next 2 years and underestimate the
  change that will occur in the next 10 years.
  Dont let yourself be lulled into inaction.
• -Bill Gates, Business _at_ the Speed of Thoughts,
  1999.

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Technology has changed everything!
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E-Health Consumers Dissatisfied

• Increased expectations of service based on other
  industries healthcare hasnt delivered.
• Using web mostly as modern Encyclopedia
  Britannica, but prefer much more.
• Frustrated by the variation in quality and
  availability of information on the Web.
• Almost 3/4 say theyd change to a physician/
  practice that had website and email capabilities.
• Industry has failed to provide consumer-centric,
  personalized, interactive functions.

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Consumers Want High Tech

• Publish disease information provider outcome
  report cards drug outcomes, prices, and
  alternatives lab tests results and
  interpretation consumer-generated satisfaction
  ratings
• Interact email with doctors health plans,
  reminder messaging, risk assessment tools
• Transact scheduling, decision support tools,
  prescription renewal, e-commerce, account
  management
• Integrate computerized patient record, disease
  management, account management, in real time 24/7

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Consumers Want High Touch Too

• The new generation of patient also wants
  access. They do not want to wait two months for
  an appointment in fact they do not want to wait
  at allPatients who have questions they would
  like answered and requests for prescription
  renewals, referrals and appointments do not see
  why these issues cannot be raised on a weekend.
  Sometimes, patients would like to talk to a human
  being, not a computer masquerading as a
  receptionist, and they do not want to wait 30
  minutes for a harried nurse, nurse practitioner,
  or doctor to return their call. -T.
  Lee, NEJM, 344, 26 2001

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Consumers Are People, Not Cases

• I will remember that there is art to medicine
  as well as science, and that warmth, sympathy,
  and understanding may outweigh the surgeon's
  knife or the chemist's drug.I will not be
  ashamed to say "I know not," this awesome
  responsibility must be faced with great
  humbleness and awareness of my own frailty. Above
  all, I must not play at God.I will remember
  that I do not treat a fever chart, a cancerous
  growth, but a sick human being, whose illness may
  affect the person's family and economic
  stability. My responsibility includes these
  related problems, if I am to care adequately for
  the sick.
• -Hippocratic Oath

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4 Implications

• Consumers expect a high level of service, which
  other American industries are providing.
• Patients today are increasingly unwilling to
  live with the perception that their needs are
  going unmet. -Dr. Thomas Lee
• Bottom line Consumers expect both good customer
  service by providers (courtesy and respect) and
  highly functional web-based applications
  (reliable, fast, easy and secure) that give
  access to their local providers.

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Its aboutengaging in best practices.

• Consumers want from the healthcare industry what
  they get from the best of other American
  industriesworld class products and services.

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Learning from American Industry

• Market forces that made other American
  industries become more focused and
  consumer-friendly are reshaping healthcare
  delivery. -Regina Herzlinger
• Forces
• Businesses are becoming more focused
• Consumers are demanding greater service
• Technology is changing everything

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Convenience Clinics

• Reasonably priced, integrated care offered in a
  convenient and efficient manner
• From Medical Monoliths to Focused Factories
  one-stop shopping, 24/7, that save the consumer
  time, money, and sometimes even their lives

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Conclusion

• The consumer is the customer.
• Your challenge is to consistently provide a level
  of service to the customer not yet seen in
  healthcare.