The Internet economy has forever changed how people shop, get information, do business, and interact. With these changes come expectations for healthcare access, convenience, and low prices like none ever seen before—expectations that legacy hospitals and health systems might find extraordinarily difficult to meet.
Kaufman Hall recently released the results of its annual Healthcare Consumerism Survey of more than 425 executives representing about 200 hospitals and health systems nationwide. The results, which are summarized in a report titled 2018 State of Consumerism in Healthcare: Activity in Search of Strategy show that few hospitals are top performers in meeting consumer expectations. Hospital consumer initiatives typically lack a foundation of insights and analytics, favor traditional over innovative approaches, and still show evidence of longstanding problems in providing a positive healthcare consumer experience. Kaufman Hall’s Healthcare Consumerism Index, based on the survey results, provides a lens to overall industry performance.
Key findings include:
- Only 8 percent of organizations responding to the survey are rated Tier 1 performers for aggressively pursuing consumer-centric strategies
- Only 23 percent are rated Tier 2 performers for piloting consumerism initiatives and identifying needs relative to the organization’s overall strategy
- Nearly 70 percent of organizations are in Tiers 3 and 4, indicating that they either have not yet begun, or are in the very early stages of their consumerism efforts
Compared with last year, a significant number of organizations have moved up to Tier 3 from Tier 4, but the percentages in Tiers 1 and 2 are relatively flat. More organizations are launching new projects targeted to meet consumer expectations, but such projects have not yet been widely implemented or achieved measurable results.
Looking at access initiatives specifically, survey results indicate that innovative approaches to consumer access are limited. Much of the focus continues to be on relatively traditional approaches, such as multi-service outpatient centers and ambulatory surgery centers (Figure 2). Findings include:
- More than half of respondents said urgent care centers are widely available at their organizations
- Freestanding imaging sites were reported as widely available by 40 percent of respondents
- Only 27 percent reported retail clinics as widely available
- Only 14 percent reported video visits as widely available
- Only 17 percent reported e-visits as widely available
Survey results show pricing strategy provides the most room for improvement for the nation’s hospitals and health systems. Only 5 percent of organizations rated in the top tier in this category for aggressively pursuing pricing strategies and price transparency, while an overwhelming 74 percent are Tier 3 and 4 performers.
Most respondents—62 percent—set pricing based on traditional methods of benchmarking of negotiated rates to the market, which does not take into account consumer price sensitivities. Use of more sophisticated pricing methods is significantly lower (Figure 3):
- Only about half use financial analysis to determine price/ volume trade-off impacts
- Just 36 percent use cost-to-serve analysis
- Only 26 percent use analysis to determine relative price risk by service
- A low 11 percent use consumer research to inform demand elasticity related to price
These findings reveal that many hospitals and health systems need a clear roadmap for consumerism. Such a map should be built on a foundation of data and analytics that provides a nuanced view of consumer expectations, and allows organizations to prioritize their efforts over time based on the effects on patients, the impacts on revenues, and the resources needed.
The stakes are high. In an era of growing consumer expectations and new competitors focused on access, convenience, and low prices, a key differentiator for leading organizations will be the ability to design and activate a clear plan to transform healthcare’s traditionally inconvenient interactions into a truly contemporary experience for today’s—and tomorrow’s—consumers.