A New Healthcare Alliance: Consumer Engagement in the New Healthcare Economy

Abstract

Healthcare TransformationVol. 1, No. 3 Open AccessA New Healthcare Alliance: Consumer Engagement in the New Healthcare EconomySummer Knight and David SorinSummer Knight*Address correspondence to: Summer Knight, E-mail Address: sknight@firecrackerinternational.comSearch for more papers by this author and David SorinSearch for more papers by this authorPublished Online:1 Sep 2016https://doi.org/10.1089/heat.2016.29015.skdAboutSectionsPDF/EPUB Permissions & CitationsPermissionsDownload CitationsTrack CitationsAdd to favorites Back To Publication ShareShare onFacebookTwitterLinked InRedditEmail There are two types of leaders in healthcare today. There are those who believe the dramatic changes in healthcare will not occur during their tenure, and hence continue to focus on the traditional “business as usual” fee-for-service (FFS) model. The other, proactive, type of leader recognizes that change is not just on the horizon, but is happening now. They are actively addressing the future for their organizations and the individuals and populations they serve. These leaders recognize that a key to evolving with the new healthcare economy is to understand clearly the forces shaping change and consequential transformational healthcare trends affecting the industry. These proactive leaders recognize that in light of the major changes, they must take positive steps to form an alliance with the healthcare consumer-customer. Care will transform to be delivered in a manner suited for today's consumer needs, and consumers will behave in a more involved and engaged manner to share in the responsibility for their own healthfulness.Editor's Note: Today, fee-for-service models of healthcare reimbursement are dominant, but for how long? Summer Knight and David Sorin argue that value-based care—payments based on improving the health of a population—will soar to 50% of payment models by the end of this decade. The push won't simply be the federal government, however. The push to new models of delivery will be driven by 12 “transformational health trends.” Read on for more.To be successful in the new healthcare economy, healthcare systems must attract and engage a greater swath of the population to manage in order to survive in the new risk environment. Once they attract this new population, they must engage individuals and offer them a great experience, keeping them loyal to the healthcare system and their brand. Then the healthcare system must influence the behavior of individuals and the population they manage to minimize disease and optimize healthfulness in order to minimize population health risk and costs.Three Key Drivers Are Disrupting HealthcarePowerful forces in three key areas are driving the evolution of the healthcare market: regulatory, economics, and technology. These forces have caused several key trends that are transforming healthcare. Before delving into the trends, let's further explore the key drivers.For the individual, the term healthfulness is defined as a personal state of physical and emotional well-being that occurs due to the health of one's body, mind, spiritual contentedness, and social connections. It is often the holism noted in individuals who have achieved success and impact due to alignment in their professional and personal lives with their purpose while maintaining mental and physical health.For organizations, the term healthfulness is defined as a culture that demonstrates values and behaviors aligned with the organization's vision and mission resulting in key business success factors such as employee engagement and high customer loyalty leading to overall corporate profitability.Regulatory• ACA: The Patient Protection and Affordable Care Act (PPACA or ACA) 2010 HR3590 consists of several legislative documents including the Affordable Health Care for America Act, the Patient Protection Act, and the healthcare-related sections of the Health Care and Education Reconciliation Act, and the Student Aid and Fiscal Responsibility Act. It also includes amendments to other laws such as the Food, Drug and Cosmetics Act and the Health and Public Services Act. Since being signed into law, additional rules and regulations have expanded upon the law. The law enacted in 2010 impacts and incentivizes care delivery transformation and a switch from FFS to value-based reimbursement (VBR) models, including the formation of Accountable Care Organizations (ACOs).• The triple aim: The Institute for Healthcare Improvement (IHI) developed a framework that describes an approach to optimizing health system performance. It is IHI's belief that new designs must be developed to simultaneously pursue three dimensions referred to as the “triple aim”:– Improving the patient experience of care (including quality and satisfaction)– Improving the health of populations– Reducing the per capita cost of healthcareThe triple aim changes the focus from individual FFS to VBR requiring the reduction in healthcare costs and management of an entire population while requiring excellent customer experience and quality of care. This fundamental alteration of the healthcare business model requires competencies historically unfamiliar to the industry.Economics• There is a growing transition from FFS to VBR models in healthcare. Different models are being created and tested to align payments for healthcare services with the focus on the triple aim. Over just a few years for most healthcare entities, these changes require business model transformation, which affects the very culture of the organization and the healthcare industry as a whole.• There is also a significant influx of individuals into the healthcare system due to the ACA. This is due to requirements that more people maintain insurance in the United States, as well as the growing baby boomer Medicare population.TechnologyA catalyst for most industries, much of the transformation experienced now and in the future of healthcare will be mitigated via technology. Technology is the means for greater information exchange and connectivity. Consumers are mobilized and want to share their personal data with their healthcare provider, as well as participate more in decisions in their healthcare based on quality and pricing. Health systems need greater interaction to achieve their goals with the population for whom they provide care. Due to these outcomes, technology has mitigated significant change in the doctor–patient relationship. These changes require new competencies in order to survive in this new healthcare economy. Hence, healthcare systems are developing new types of partnerships in technology.Due to these three key drivers, unprecedented change is disrupting healthcare business models. Healthcare organizations must make sweeping foundational changes in their vision, relationship with their customers (previously referred to as patients), internal culture, financial risk structure, and care delivery methodologies. Navigating these changes requires competencies not historically used in healthcare. New challenges created by regulation, economics, and technology are driving healthcare organizations to transform their business models, leading them to develop new partnerships to gain necessary competencies to survive and thrive in the new healthcare economy.These three key drivers are causing several distinct trends in the healthcare ecosystem. Due to the dynamic changes, many of these trends could end with the term “transformation.” These transformational healthcare trends include: 1. Value: Transforming from value-blind reimbursement to basing remuneration on the value of the healthcare experience.2. Consumerization: Transitioning “patients” to “consumers of care”; individuals gaining customer status as individuals manage a greater burden of the cost of care.3. Care delivery: Leveraging technology to transition care services from hospital/facility based to home and mobile.4. Approach: Evolving from an episodic, individual-based approach to a longitudinal population-based one while incorporating individual preferences.5. Intelligence: Transitioning from information ensnared in silos to data-rich, actionable information available in integrated systems accessible across a continuum.6. Integration: Realigning and partnering around quality, reduction of risk, and cost of care.7. Care team: Refocusing from a doctor-centric system to alignment of a care team incorporating stakeholders with differing skills to support the individual at the center of care while incorporating the personal care support network and caregivers.8. Care management: Transforming fragmented care to an integrated system focused on strong triage, care management, and coordination.9. Clinical focus: Transitioning from disease-focused to incorporation of healthfulness.10. Responsibility: Transitioning the power of the relationship from insurer/payer oversight to provider in partnership with consumer.11. Consumer engagement: Creating continuous connectivity from episodic interactions.12. Business model: Transactional to experiential.Table 1: The transformational healthcare trendsThis table represents transformational trends in healthcare with a view from the past and a look into the future.TransformationPastFutureValueFee-for-service: value-blind reimbursementValue-based reimbursement: accountability for experience, satisfaction and qualityConsumerizationPatient passive w/ limited insightsInformed and involved; consumer-centric modelsCare deliveryEpisodic; in-patient focusedAmbulatory/individual-in-transit/homeApproachIndividual; one encounter at a timePopulation-based while incorporating individual preferences and precision medicineIntelligenceSiloed; paper basedData-rich and accessible across the continuumIntegrationComplex silosAffiliations coordinating around riskCare teamDoctor-centricRealignment of care team incorporating stakeholders and requiring differing skillsCare managementFragmented careCoordinatedClinical focusDisease and treatmentHealthy/wellness/preventionResponsibilityMal-aligned payer/providerAligned consumer/providerConsumer engagementEpisodicContinuously engaged and connectedBusiness modelTransactionalExperientialAll of these trends are essential to success in the future state of healthcare in the United States. These healthcare transformation trends are interrelated, some trends causing others, some requiring other trends to be effective and to attain the tremendous shift toward the future vision of healthcare. In this article, we focus on the need for a new alliance between the healthcare consumer and the healthcare provider to attain success in the new healthcare economy.ValueHealthcare systems, hospitals, and physicians have worked predominantly under a FFS model where payers have paid providers for the services rather than for outcomes. The shifting healthcare ecosystem from a value-blind, FFS reimbursement model where healthcare systems prospered upon illness and injury is transforming dramatically over the next few years to focus on VBR, where accountability is based on the individual healthcare consumer's satisfaction with their experience and the quality of care.A few examples of these changes: • In the FFS model, the sicker an individual, the more a healthcare provider prospered. While there is an assumption that the focus in healthcare would be toward healthfulness of the patient and prevention of disease, there were scant financial motivators in a for-profit environment to focus resources on these trends—in actuality, it was antithetical for the transactional business model unless the preventative action created a procedural opportunity such as a colonoscopy or mammogram. This is not to suggest that providers did not care or support health, but rather that their financial incentives did not strongly align with a focus on health.• Health plans required a critical mass of healthy “light users” and “non-users” to offset the cost of their high-risk, high-cost members. Due to ACA and the drive from FFS to VBR models, risk is being transferred from HPs to the healthcare provider systems, requiring an entirely new approach to the “business of healthcare,” the business model of how a health system operates.While most healthcare systems have been running their business under the transactional model for the past 20 years, at-risk health plans have run on a blended fully insured risk model requiring large populations to balance the risk, as well as a transactional model usually on behalf of the government or a self-insured employer. Some health plans leaned toward one or the other model, but this mix of competencies have given the health plans greater flexibility to pivot, while health systems are far less flexible.The transition to VBR will continue to advance over the next few years, putting health systems in a conundrum because they have built cultures based on the FFS model, making the shift challenging. In order to do so, health systems will need to change their operational models, bring new skill sets and competencies into their system, and adopt a significant shift in culture, transforming from a “sick care” system to a blended healthcare system focused on healthfulness, prevention, population management, and expeditious resolution of acute events.Value-based reimbursement (VBR) will increase penetration from 2015 to 2019. In 2015, the average health system received less than 1% of revenues from VBR arrangements. But it is predicted that by 2019, more than half of the reimbursement for the average integrated health system will be based on VBR.The transformation that must occur in a health system to prepare for this shift in financial model requires significant resources. As time goes on, FFS revenue will decline as VBR revenue increases for most healthcare systems. Today, the majority of health systems are currently on the downward slope, entering into what we call the “valley of despair” in the transition from FFS to VBR. In a time when resources are needed to make sweeping changes down to the very core of their organizations, provider leadership is faced with flat or falling revenues.New ApproachTo be successful in the new healthcare economy, healthcare systems must attract and engage a greater swath of population to manage in order to survive in the new risk environment. Once they attract this new population, they must engage individuals and offer them a great experience, keeping them loyal to the healthcare system and their brand. Then the healthcare system must influence the behavior of individuals and the population they manage to minimize disease and optimize healthfulness in order to minimize population health risk and costs.While they have been able to collate a significant number of lives to manage risk, healthcare payers have struggled to engage individuals within their covered live populations. Payers have been unable to engage individuals because people do not trust their healthcare insurance supplier.1 Hence, insurers have traditionally been unable to engage individuals in a meaningful level that would engender behavioral change to improve health risk scores on a population or individual level.2 There are, however, learnings that can be applied as healthcare system providers attempt to engage individuals and manage their populations where the healthcare payer failed. These include: • Most people will not pick up an incoming call from their health plan, but will hustle to pick up the phone when the caller ID shows their own doctor.• People trust their doctor and doctor's team more than their health plan.• The clinical team is “closer” to the individual's health situation, having real-time access to their electronic health record, being in geographic proximity, understanding community resources, and most likely having met the individual in person.Consumer EngagementTo be successful under these changing conditions, healthcare systems need to shift dramatically their relationship with individuals and the populations they serve. They need to create an alliance with the healthcare consumer-customer. In the future, we will experience a transition from healthcare system interactions with individuals. Today, healthcare systems and consumers create a relationship within episodes of care. To attain success in the future healthcare ecosystem, the healthcare system and the consumer must create a relationship where traditional episodes of care occur within a longitudinal relationship.This is a key point relevant for both the healthcare system provider and the customer, and brings to bare basic marketing concepts used widely in other industries of building customer loyalty with the organization (and brand) in order to engage the consumer in a service—their own healthcare. This happens within a relationship. Healthcare system providers must develop a compelling way to create a significant relationship with the customer. Traditionally, healthcare hasn't worked on this competency, as the industry has relied on the doctor–patient relationship. However, as these transformational healthcare trends evolve, the healthcare system can no longer rely on only the doctor–patient relationship as a greater care team and system becomes implicated in care. Hence, the healthcare industry will look to other industries such as retail to create experiences expanding their relationship and brand with the healthcare customer. The traditional healthcare system provider will now need to provide a customer experience—a competency that until now has not previously been a focus.Due to the economics heading into the valley of despair, healthcare systems must implement these competencies swiftly and intelligently with the least expense. The healthcare system needs to engage and convince the individual consumer to adopt behaviors that improve health, resolve disease and injury, and tightly control chronic illness in ways that reduce their need for high-cost care.Alliance Between the Healthcare Consumer and Healthcare Provider SystemIn healthcare, roles of responsibility are shifting. Traditionally, healthcare responsibility was on the shoulders of the payers of care—usually insurers and employers. In the new paradigm of healthcare, the responsibility is shifting, requiring alignment between the healthcare system provider and the consumer.Because “your health is always with you,” the healthcare consumer has incentives to respond to the healthcare systems’ outreach for engagement. Healthcare consumers are regularly looking for credible information to support their quest toward healthfulness, swift resolution of illness or injury, or better control of chronic disease.Due to the value theme, the healthcare system provider is motivated to engage the consumer in their holistic care. Although an individual's health is a part of their own daily life, the healthcare provider system currently only has a connection with the individual during an episode of care. Calculating this out to an average of two hours per year for healthy individuals, they intersect 0.0002 of the total hours per year for an individual.However, that individual is interacting with health-related content at a greater rate, turning to search engines such as “Dr. Google” and other online resources. Due to the shifting of a value-based relationship, healthcare systems want a greater percentage of that time in order to assist consumers to become more engaged and informed, and engendering greater compliance with care plans. This means healthcare systems have to be available when the healthcare consumer needs their support on all access points—smartphones, tablets, web, television—whether at home, at work, or mobile. The healthcare system must be available in ways they have not been before in order to capture healthcare customer's mindshare and offer value to them in a structure aligned with their personal preferences.In tomorrow's healthcare ecosystem, it is incumbent upon the healthcare system to create an alliance with the healthcare consumer. It is also essential to create a larger pipeline of future customers who will turn to the health system. This pipeline or the group of dedicated lives will also need to learn to become better consumers of the healthcare ecosystem. In order to create this healthcare alliance between the healthcare system and the healthcare consumer, both need to offer each other more. To optimize the relationship, what does the healthcare system need of the healthcare consumer?The healthcare system needs an “informed, engaged, and quantified healthcare consumer.” Here is how that individual acts: The optimal healthcare consumer understands her responsibility for her health. She understands the impact of her decisions, lifestyle choices, social impacts, and individual behaviors have on her health outcomes. This ideal healthcare consumer is data rich, integrating information from clinical settings—testing, specialists, pharmacy; her lifestyle and social data; and her activity and biometrics data into her personal health record, making this information available in formats for different types and levels of care support people within her healthcare support network. The ideal healthcare consumer exchanges accurate and actionable health data used to improve health outcomes first focusing on healthfulness and prevention, then on decreasing the impact of disease by affecting positive behaviors to the lifestyle and social aspects affecting health. This healthcare consumer makes informed decisions balancing cost and quality with her personal preferences. Because of this, the healthcare consumer is an active member of her own care team and health support network.To summarize, the optimal healthcare consumer has the following characteristics: • Responsibility for health—willingness to take responsibility for one's own health, which includes co-developing and following care plans, taking prescribed medications, participating in follow-up visits and home healthcare, etcetera. At times, a consumer's proxy such as a family member would manage this job such as for a person with Alzheimer's or a very ill person.• Quantified patient—provides data from multiple sources to aid healthcare providers in understanding the full picture, including lifestyle and social impacts one's health.• Desires to improve health outcomes.• Makes informed decisions based on cost, quality, and personal preferences.• Is an active member of the care team.These are characteristics of an ideal healthcare consumer. And today, we must admit that systems are not yet in place to support even the most conscientious healthcare consumer to achieve this ideal. So the next question becomes how can we get there? Or asked differently, how can the healthcare system best support the healthcare consumer to transition into an ideal healthcare consumer? The answer is by leveraging a number of the transformational healthcare trends such as care delivery, care team, care management, and data intelligence transformation.The Consumerization of HealthcareThere are multiple catalysts that are accelerating healthcare consumerization. One is the increased out-of-pocket expense required of individuals for healthcare insurance and costs. As healthcare costs continue to rise, employers are passing a greater share of the expense onto employees and their families. This puts more financial pressure on the healthcare consumer and gives them the motivation to shop smartly, transforming them into a healthcare customer.In the past, employers covered a greater percentage of health insurance costs. Actual healthcare costs were not shared with individual employees and their families. This led to an environment where healthcare resources were used indiscriminately. Individuals were not incentivized to concern themselves with costs or to choose quality providers beyond the recommendation of a neighbor or trusted friend. Hence, a benefit for workers and their families became a negative for the evolution of the healthcare ecosystem, effectively removing consumer accountability. Now, with a greater proportion of the expense coming from their pockets, consumers are more thoughtful about what they spend and where they spend it.One premise of this article is that those who utilize the healthcare system, those who receive services from providers, those once called and thought of strictly as “patients” have begun to be thought of as healthcare consumers and even customers as they take on the greater responsibility of making purchasing choices in healthcare. The previously sacred doctor–patient relationship is becoming more akin to a retail relationship.In retail sales, “the customer is king” and has been for a century now. Department store entrepreneurs such as John Wanamaker and Marshall Field introduced slogans such as “the customer is always right” in the early 20th century. Nordstrom has continued the tradition and embellished it in the late 20th and early 21st centuries. Of course, all stores want to sell what customers desire, but not all have focused on the quality of the services delivered or the quality of customer interactions. Nordstrom and others have clarified that their brand focus is on the customer. But this focus on the customer was slow to be embraced by service industries such as healthcare. One key transformational healthcare trend is that of clinical focus transitioning from disease to healthfulness requiring the healthcare consumer and the healthcare provider. This requires the healthcare provider system to create an ongoing relationship with the consumer focused on healthfulness rather than an irregular or episodic series of transactions. Healthcare providers must learn from brands and retailers such as Nordstrom, which have worked consistently to build relationships with consumers.A new term to the industry has been the “consumerization of healthcare.” The term consumerization is ambiguous, but refers to the effects of information technology. Depending on the reference, the term consumerization has been used to describe the transition of computing from business mainframes, to employee terminals, leading to personal computers and then onto laptops and mobile devices, taking technology to the consumer.3 Today, the trend has reversed, and “new technology emerges first in the consumer market and then, after mass acceptance, is utilized by business organizations.”4 The IT Industry considers the most disruptive technology trend of this decade to be consumerization.Tech-savvy employees are moving into the global workforce, while personal devices and mobile data networks grow increasingly accessible, affordable, and easy-to-use. Social networking applications such as Facebook, LinkedIn, and Twitter have become indispensable personal outlets and are now business tools for a rapidly growing number of organizations. Recent studies conducted by Gartner, IDC, and Forrester point out that nearly half of the U.S. workforce is already mobile and leveraging wireless technology. In order to stay relevant, today's healthcare organizations must be agile and move at customer speed—as this is how their competitors will conduct business as well.These developments in technology have further enabled customer behavior in the retail world. For example, e-commerce allows a consumer to find any item, compare prices from different retailers, order products and services immediately, and receive them the same or next day if desired. This has caused a shift in power, as consumers have more choices and information while no longer having to travel to a physical store or buy only what the store offers or has in stock at the moment, or pay the price displayed without the ability to comparison shop. Because of this disparity in experience, even if a retailer offers great customer service and treats the “customer as king,” the savvy consumer knows there are bountiful options available by exploring the Internet, as in nanoseconds shoppers can find what they want, get the best price, and conclude their transaction quickly, conveniently, and expeditiously. Barriers have been removed.This method of shopping is now turning to other industries such as healthcare because consumers are demanding ease of access, choice, and transparency of price and quality. Consumerization represents a shift in the balance of power in favor of the consumer, primarily due to technology advances offering more customer autonomy and choice. We have observed this powerful shift in other professional services such as LegalZoom.com, a site that brought simple legal services to the population at a reasonable price. Coursera and other online education services brought higher education offering courses to anyone, from anywhere, at any time. Healthcare, too, is being transformed by consumerization.In a study conducted by Harris Poll in March of 2015, 84% of those polled were aware that their doctor's office has a patient portal, and adults aged 55 years and older were more likely to utilize it as access to their personal health information. A total of 60% of those polled would be willing to try telehealth visits and schedule doctor visits online. Even though functionality, usability, and applicability are still evolving in digital health, consumers are beginning to utilize available tools. There will be a learning curve as more healthcare-related information becomes available. For example, though availability of electronic health record portals is empowering, few consumers are prepared to understand the details written in their electronic health record. However, that is a challenge that must be solved as we transition to the consumer as owner of their health records.5Access to healthcare information through the Internet has empowered consumers who are accessing health content, causing Americans to take more personal responsibility for their own health. Social media, a greater degree of connectiv