Consumerism is Coming to Healthcare: How Can You Prepare?

Think back to your last car, truck or SUV purchase. What did you want to know before spending so much money?

More than likely, you wanted to know the price range of the type of car you were considering. You might have wanted to know what features were standard on different makes and models. You might even have identified one or two features that you couldn’t live without, and that helped you narrow your choice. You aIso might have wanted to know where to find the best financing. If you’re tech savvy, you probably found much of the information you needed online—even in a single app or website. In recent years, our collective consumer needs have changed the way we buy cars. In fact, consumer preferences have changed the way we buy most things—even healthcare.

We, as patients, are being asked to pay more and more of our healthcare costs—from premiums to co-pays to deductibles—and the percentage of household income spent on healthcare is increasing. Consider the following:

  • In 2012, healthcare expenditures for Medicare households averaged almost 14 percent of the household budget. ($7,000 for a $50,000 household.)
  • In 2012, healthcare expenditures for non-Medicare households averaged just over 5 percent. ($2,500 for a $50,000 household.)
  • In 2013, average healthcare expenditures for all households exceeded 6 percent of household budgets, with this percentage rising. ($3,000 for a $50,000 household.)

We know that healthcare costs are shifting to consumers, and consumers are looking for ways to reduce the burden. In order for consumers to make better healthcare choices, they need information about availability, cost, quality of care, and their options, at a minimum.

I see a parallel between car purchases and healthcare purchases. In the not-too-distant past, car buyers had very little leverage because dealers bargained using proprietary information. Buyers never knew what the dealer really paid for a vehicle. Today, however, consumers have access to detailed information about dealer cost, as well as the purchase prices of similar vehicles in their area, and can negotiate with greater effectiveness. Consumer demand precipitated the availability of online auto information.

Likewise, as consumers pay a greater percentage of their healthcare, they will demand to know where they can access the best care at the lowest price. Healthcare systems will be required to provide detailed information about the services they offer, how successful they are and how much their treatment costs—or risk losing patients to providers who can supply that information.

We have already seen some healthcare information become available online. Many consumers use websites such as healthgrades.com, doctor.webmd.com or vitals.com to read provider reviews from current and former patients. Consumers also look to sites like Medicare’s Hospital Compare and Physician Compare to research their providers, and with new laws coming into effect, even more information about quality will be available in the coming years.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is designed, in part, to help shift physician and facility reimbursement from volume to value. Under the MACRA proposed rule, physicians will be required to report data to CMS in four categories: quality, cost/resource use, clinical practice improvement, and advancing care information. Not only will CMS receive this information, the agency is expected to publish provider information for public use. We can expect quality and cost information for individual providers to become more readily available to consumers by 2020.

How can your healthcare system prepare for the coming shift in consumer behavior?

  • Invest in an information system that will allow you to track your performance in each category.
  • Know your data. Track your performance over multiple periods and compare your performance to available benchmarks.
  • Use your data to identify strengths, weaknesses, and areas that need improvement, as well as areas you should consider eliminating. If your competitors can regularly outperform you in certain areas, your resources might be better deployed in areas where you are the leader.
  • Leverage your strengths by providing strong performance and cost statistics to patients.

Being proactive in knowing and managing your data will give you the opportunity to communicate the quality, cost, and effectiveness of your healthcare services to your patient base—instead of simply allowing others to communicate it for you.

 

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Topics: Quality Improvement, Healthcare Quality, MACRA Summary

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