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"Younger consumers expect healthcare to work the way other markets do - in a user-friendly manner...with options designed to meet their needs"

"Empowered by computers, smartphones and the internet.  American's increasingly seek to control...wellness aspects of healthcare." 

"Almost 71% [millennials] said they prefer to use an app to schedule healthcare appointments"

"Hospitals and health systems distinguish themselves by providing meaningful information, delightful experiences, and convenient engagement."

Executive Briefing: The Next Generation of Healthcare for the Next Generation 

Written by Brooke Murphy | August 17, 2016

Technology and market conditions are changing consumers' expectations in ways that will force health systems to approach patients as customers — or risk losing market share to their more progressive competitors. 

Most patients lack the scientific expertise to recognize exceptional clinical care; they only know whether their health improved after treatment. In fact, patients' chief frustration with care providers centers around their experience visiting or communicating with them. According a study published in the Journal of Medical Practice Management, 96 percent of patient complaints mentioned negative customer interactions during medical encounters, including inadequate physician communication, disaffected staff and disorganized administrative operations.

This content is sponsored by Integrated Healthcare Strategies

Informed by their experience in commercial retail, patients view healthcare through the lens of the individual consumer as king. Further, younger consumers expect healthcare to work the way other markets do — in a user-friendly manner, lush with options designed to meet their needs.

Until recently, customer experience was downplayed in healthcare. However, a combination of economic and commercial trends — ranging from the popularity of high-deductible health plans to the ubiquity of digital communication — is altering how the customer experience is perceived and implemented in provider organizations. Today, top-of-the-line customer service is not an option but a necessity.

Providers that effectively engage patients through consumer-focused strategies stand to thrive in a value-based industry. Before hospitals and health systems invest in expensive technology or marketing solutions, however, their key administrators and physicians must understand what the new generation of patients expects.

Technology and Expanded Access to Information
A person's familiarity and comfort with modern technology largely informs his or her behavior in today's healthcare market, says Mary Heymans, managing director and senior advisor of client services for Integrated Healthcare Strategies. Empowered by computers, smartphones and the internet, Americans increasingly seek to control both the financial and wellness aspects of their healthcare. Digital innovations have made it possible for consumers to use portable devices to access their medical records, diagnose their symptoms and determine treatment options. Publicly accessible websites detail medical costs and physician reviews by geographic location and specialty. Increasingly, patients will have an idea of what care they need and how much it will cost before walking through a practice's doors. 

This level of engagement is a significant departure from what physicians experienced 10 years ago. "Physicians aren't directing patient care nearly as much as they have in the past," said Ms. Heymans, meaning that patients-as-consumers are more interested in curating their own healthcare experiences than adhering to one physician's advice.

In some ways, increased access to data and information has diminished the authoritative symbol of the clinician's white coat among younger generations of patients. Popular consumer review website Yelp, for instance, embodies the millennial value of crowd-sourced customer feedback. Armed with more information than ever before, patients have the resources to make decisions about care providers based on criteria such as proximity, quality ratings, reputation or convenience, rather than simply defaulting to their parent's physician.

Generational Differences Affect Technological Preferences
Technology has also impacted how different generations approach healthcare. Generally, elderly patients are less comfortable using technology than their younger counterparts, said Kathy Hall, managing director and senior advisor of executive search for Integrated Healthcare Strategies.

A study published in JAMA found just 5 to 8 percent of Medicare beneficiaries used a digital medium to fill prescriptions, manage health insurance matters and communicate with their physician in 2011. That figure pales in comparison to the nearly 60 percent of adults ages 18 and older who told Pew Research Center they consult Dr. Google at least once a year, including the 35 percent of respondents who said they regularly use online resources to diagnose their own ailments. This means providers must prepare to engage a patient population in which a majority rely extensively on technology for healthcare-related tasks.

Core tenets of "millennial-ism" include values of transparency, patient-centeredness and data-driven approaches to problem solving. This new generation of healthcare patients is poised to embrace more digitized forms of healthcare and wellness that prioritize convenience and economy, Ms. Heymans and Ms. Hall agreed. A 2015 Salesforce survey found nearly 60 percent of millennials said they would use telehealth services if offered by their physician. Almost 71 percent said they prefer to use an app to schedule healthcare appointments, share health data and manage preventive care.

Electronic healthcare tools like telehealth and e-visits have been slow to gain momentum in the healthcare space thus far, but the new generation of patients-as-consumers will continue to demand user experiences and employee benefits that resemble Amazon or Google.

Changing Economic Conditions Produce More Discerning Consumers
As healthcare costs continue to rise, consumers who face increasing out-of-pocket costs are highly motivated to find ways to better manage their healthcare. According to PricewaterhouseCoopers, healthcare costs now outpace both economic inflation and wage growth. Coupled with the rise in insurance deductibles and premiums, patients are more conscious than ever of how much they spend on healthcare services as medical costs consume an increasingly large portion of their paychecks.

During the past 10 years, consumers have shouldered an increasing burden of medical cost sharing under employer-sponsored and commercial health plans. A University of Michigan study found the rate of employees' out-of-pocket spending outpaced employers' increase in premium costs between 2009 and 2013. At the same time, Americans' deductibles have more than doubled in the last 10 years.

This shift in who pays for healthcare rocked the economic foundation of the hospital industry. For the first time, a larger share of hospitals' overall reimbursement now comes from patients rather than commercial payers, according to TransUnion. As a result, hospitals are interfacing with consumers more than ever to collect. Unfortunately, many hospitals' collections and billing departments lack the customer service etiquette patients have come to expect in ordinary retail and service transactions.

The changing economics of healthcare have made customer satisfaction a strategic priority for all hospitals in the shift from volume to value. Under value-based care, clinical outcomes and patient satisfaction bear weight in determining hospitals' prospective reimbursement. This means hospitals not only have to ensure patients receive unrivaled treatment in the exam or operating room, but in the billing department and registration desk as well.

A New Type of Patient Loyalty
Cultivating and retaining a loyal client base is crucial for physicians to sustain their business practices. However, the availability of cost and quality comparison tools has empowered consumers to transition between healthcare providers with relative ease. In fact, today's patients are more likely to transition through multiple physicians throughout their lifetime, in stark contrast to previous generations, said Ms. Heymans. A disagreeable comment, long wait-time or negative billing encounter is enough to drive patients out of one physician's practice into another provider's arms.

Hospitals and health systems have to keep in mind that younger patients today generally prefer information over personal relationships when it comes to healthcare decision-making. For example, millennials ages 18 to 34 are most likely to ask for a discount, ask for a cheaper treatment option, request a price check or appeal an insurance decision, according to PwC's Health Research Institute.

At the same time, nearly half of the millennial respondents said they have no personal relationship with their primary care physicians and approximately one third of millennials said they prefer care in retail clinics. As these surveys suggest, the availability of information is an increasingly greater driver of patient loyalty than the familiarity of the physician or hospital brand.

Retailization of Healthcare
Many physicians regard the commercialization of healthcare with mixed feelings. In some ways, the commodification of healthcare as a consumer service holds physicians and patients accountable for the respective quality and cost of medical care. "Knowing anything that happens in a physician's office can surface online raises the bar in terms of provider accountability," said Ms. Hall. At the same time, patients with high-deductible health plans are responsible for shopping around for healthcare services to keep medical costs low, she added. But that doesn't mean consumer-oriented healthcare is without its drawbacks.

Consumers have access to more data and information than any generation before. But as any physician will tell you, data without context is meaningless. The challenge of the modern consumer is that he or she must filter and sort through volumes of data that often contain contradictory or inaccurate information to arrive at a conclusion. Physicians worry that without proper medical guidance from healthcare professionals, patients may pursue healthcare services that adversely affect their health.

The New Patient-Physician Relationship
As patients accept more responsibility for maintaining their health and for controlling the cost of care, they will expect providers to help make the care experience as seamless as possible. Ultimately, hospitals and health systems that distinguish themselves by providing meaningful information, delightful experiences and convenient engagement will be the organizations that come out on top in a market ripe with disruption and competition.

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