Debunking common myths about healthcare consumerism
Until recently, consumerism in the U.S. healthcare industry has moved slowly. However, several converging forces are likely to change the situation soon and result in a more dynamic market. Higher deductibles and co-payments, greater transparency into provider performance and costs, and the rise of network narrowing and provider-led health plans are prodding patients to become more involved in healthcare decision making than ever before.
As yet, most payors and providers have comparatively little data to assess how consumerism is likely to affect them. As a consequence, they can neither confirm nor refute a number of assumptions about healthcare consumerism that are often stated as fact.
Over the past eight years, we have conducted extensive research into healthcare consumerism. This year alone, we surveyed more than 11,000 people across the country about how they perceive their healthcare needs and wants, how they select providers, and how they make other healthcare decisions. Our results suggest that many of the assumptions currently being made about healthcare consumerism are no more than myths.
Myth #1: Healthcare is different from other industries.Consumers don’t bring the same expectations about customer experience to healthcare that they bring to retail or technology companies.
Our findings indicate that consumers want the same qualities in healthcare companies that they value in non-healthcare settings. In this year’s Consumer Health Insights (CHI) survey, we asked participants to identify the non-healthcare companies with the strongest consumer focus. Apple and Amazon led the list. We then asked the participants to tell us what qualities gave such companies a strong customer focus, as well as what they valued in a consumer-focused healthcare company. The answers to the two questions were surprisingly similar. For example, more than half the participants cited great customer service as important for nonhealthcare and healthcare companies alike. Other qualities that the participants identified as important for both sets of companies were delivering on expectations, making life easier, and offering great value. Whether healthcare companies need to perform as well as Apple and Amazon on customer experience remains to be seen. However, the evidence suggests that just performing better than other current healthcare competitors will not be sufficient. Customer expectations are being set by non-healthcare industries, and meeting those expectations is likely to be critical to ensure satisfaction and loyalty.
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Myth #2: Consumers know what they want from healthcare companies and what drives their decisions.
Most consumers have strong opinions about what matters to them when they make healthcare decisions or receive healthcare services. The evidence suggests, however, that there is often a disconnect between what consumers believe matters most and what influences their opinions most strongly. Given the intangible nature of health insurance and healthcare provision, it appears that some factors play a much greater role than most consumers realize. For example, as part of our 2014 CHI survey, we posed two questions about patient satisfaction to the participants who reported having been hospitalized within the previous three years. First, we asked them how satisfied they were with their hospital experience. Second, we asked them to rank the importance of various factors that might have influenced their satisfaction levels.
More than 90% of these participants said they had been at least somewhat satisfied with the care they received, and most of them rated the outcome achieved as the most important influence on their satisfaction. However, when we mapped the factors that participants said influenced their satisfaction against their reported levels of satisfaction, we found that the empathy and support provided by health professionals (especially nurses) had a stronger impact than outcomes did. Satisfaction levels were also strongly influenced by the information the participants had been given during and after treatment.
In general, our results suggest that people tend to overstate tangible factors (e.g., parking, pain management) and understate factors that are more emotional (e.g., empathy) or abstract (e.g., value).
Myth #3: Most consumers research their healthcare choices before making important decisions and then make fact-based choices based on their research.
Five different surveys we conducted recently suggest that many, if not most, healthcare consumers are not yet making researchbased decisions. Our findings indicate, for example, that only a few consumers are currently researching provider costs or even the number of providers they can choose among. Although some (but far from most) consumers are beginning to research their health plan choices, many of them are not yet aware of key factors they should consider before selecting coverage.
Provider choices. In this year’s CHI survey, only 22% of the participants said that they always ask about cost before going to a doctor or other healthcare provider. We also asked participants whether they had received certain services in the past year and, if so, whether they had researched costs in advance. The participants who received maternity care were most likely to report that they had researched costs prospectively. In all cases, the participants were much more likely to say that they had “talked to someone” (e.g., a provider or insurance representative) to investigate costs than to look at websites. Furthermore, even among the subset of consumers who reported doing research on costs before undergoing an expensive, invasive procedure (e.g., cardiac or joint surgery), half still said that their doctor’s recommendation was the key factor that influenced their decision about where to seek care.
Cost is not the only factor most consumers are not yet actively investigating. In last year’s CHI survey, we asked the participants who reported having been hospitalized in the previous three years to tell us how many hospitals there were in their local area. More than half said there was only one local hospital when, in fact, there were a median of three hospitals within a 10-mile radius of their home and ten hospitals within a 20-mile radius.
Health plan choices. Soon after the close of the 2015 open enrollment period (OEP), we surveyed consumers who were eligible to purchase exchange plans to investigate the decisions they made about health insurance during the OEP.1 Forty-four percent of those who said they have bought an exchange plan for the first time indicated that they did not understand the type of provider network included in their plan. Nineteen percent of those who had purchased an exchange plan last year also indicated they were unaware of their plan’s provider network. Only 12% of those who remained uninsured knew the size of the subsidy they were eligible for, and only 59% were aware of the penalty for not obtaining coverage.
Similarly, in our survey this year of Medicare members, we found that only 21% of those who had enrolled in a Medicare Advantage (MA) plan knew their plan’s Star rating. However, almost all of those who knew their plan’s rating had purchased a plan that had three or more stars.
Moreover, in a survey we conducted this year of Medicaid-eligible recipients, only 32% of those who were enrolled in a managed care program and did not have dual Medicare coverage indicated that they had done any research before selecting a carrier, even though they had the option of choosing among multiple carriers.
- Bauman N, et al. Hospital networks: Evolution of the configurations on the 2015 exchanges. McKinsey Center for U.S. Health System Reform Intelligence Brief. April 2015.