I have been espousing the philosophy of a “no outcome, no income” world for nearly a decade at the College of Population Health. It seems as if the rest of the healthcare industry has only partially embraced this view as we slowly, but inexorably, make our way from volume to value. I have written about aspects of this journey in this journal previously.1 However, a new industry report from our colleagues at William Blair in New York City particularly caught my attention by their perceiving 2019 as “a potential tipping point for consumer-centric care.”2
Furthermore, I believe we cannot improve the health of the population without people’s specific engagement; when we achieve such engagement, we will be further along the road to “no outcome, no income.” With this in mind, I would like to review that report, titled “Consumer-Centric Healthcare: 2019 Update,” which is the 15th annual report specifically focused on the consumer revolution in healthcare from William Blair Equity Research.2 The principal author of the report, Ryan S. Daniels, CFA, is one of my go-to analysts who has an uncanny ability to cut through the noise and get to the point. I will highlight the 5 key factors that Daniels and Garro suggest will drive consumer-centric healthcare in the coming years.
The first of the 5 key factors driving consumer engagement is, not surprisingly, the high cost of healthcare in the United States. Our readers do not need a tutorial on this first factor, but several take-home messages jumped out at me from the report. Specifically, Daniels and Garro observe that although the Centers for Medicare & Medicaid Services indicated “that 2017 spending growth slowed to only 3.9%,…we note that this is still nearly 50% greater than U.S. gross domestic product growth….Moreover, per capita spending on healthcare hit its highest level ever in 2017, at an estimated $10,739 per person.”2
And if this were not enough, “the United States was the only OECD [Organization for Economic Cooperation and Development] country that spent more of its GDP [gross domestic product] on healthcare than social services (such as housing assistance, food security, and disability benefits), perhaps indicating an upstream issue.”2
The increased availability of healthcare price and quality information is another pillar of a consumer-centric system. Again, this is not a new topic to our readers, and it is an issue that is fraught with potholes on the road from volume to value. Specifically, the research-based evidence linking the availability of good report card–like data on the outcomes of care to consumer change in behavior is modest.3 This is not a topic for the limited space of an editorial, but we do know that the very recent change in policy from the US Secretary of Health and Human Services to promote price transparency is a positive step.
What the report does emphasize, and with which I clearly agree, is that “the release of price and quality data in a way that is convenient and useful to consumers continues to move forward at a gradual pace.”2 This can be translated to mean that severity-adjusted, observed, and anticipated mortality rates are not useful to consumers. More useful are additional service-related data, and cost information that is truly transparent.
The greater use of healthcare information technology will enable the consumer-directed healthcare revolution. I found this to be the most compelling part of the entire report, and I would like to emphasize 3 take-home messages from this section. Most providers would likely agree that the gigantic national investment in healthcare information technology has been a mixed story. Surely electronic health records have contributed to physician burnout, and regrettably, there is little research-based evidence that our nearly $19-billion federal investment, by now more than a decade ago, has improved the quality and safety of care. But as Daniels and Garro point out, these funds provided “the basic digital infrastructure upon which future innovation can grow.”2 That is an important message in and of itself.
In addition, according to Daniels and Garro, “these greenfield opportunities [Wall Street jargon for investment opportunities] have attracted continued interest from large, consumer-oriented technology vendors. To list a few examples: Apple is including more health features in its smartphones and smartwatch; Google subsidiary Verily recently announced a partnership with Walgreens to increase medication adherence, and the parent invested further in technology-focused insurer Oscar Health; Amazon acquired mail-order pharmacy PillPack, built out more healthcare specific tools for AWS [Amazon Web Services], such as medical record mining, and added more healthcare-related elements to its smart assistant (‘hey Alexa…when was the last time I checked my blood pressure?’).”2
The third message from this third key factor that I found very compelling was the future of healthcare information technology, and in particular, artificial intelligence. Daniels and Garro note, “A recent Accenture survey shows varying interest levels among consumers. For instance, 61% of respondents said they would likely use an intelligent virtual health assistant that helps to estimate out-of-pocket costs, schedule appointments, and explain coverage and bills.”2
The fourth factor is increasing financial and quality responsibility borne by healthcare consumers. This section is a detailed review of the explosive growth of consumer-driven health plans with very high deductibles. This is not a new trend, but Daniels and Garro point out the explosive growth, especially in the past 4 years, of these plans from the perspective of large employers. Here is the punchline from part 4: “In our view, the rise of plan structures that require beneficiaries to shoulder a larger proportion of healthcare costs—although not always greeted positively by consumers—will ultimately make patients larger stakeholders in healthcare purchasing decisions, thereby creating incentives to seek quality care at a lower cost.”2 I could not have said that better.
The final factor notes that health insurers, employers, and consumers are embracing consumerism. As private employers move from a defined benefit to a defined contribution plan, in which employers are given a fixed dollar amount for healthcare coverage and then they have to do the shopping, this critical trend “has the potential to dramatically affect the healthcare landscape, as consumers will begin to shop for coverage…based on their individual (or family’s) healthcare needs and the amount of pre-budgeted healthcare funding they receive from their employers.”2 Again, this is true consumer engagement.
What this section truly pointed out, however, is the generational differences in consumerism. As a parent of 3 millennials, I am beginning to understand this more clearly. “For example, while 58% of patients still prefer to book appointments by phone (down from over 60% last year), a significant number (roughly 27%) prefer to book appointments online or through a mobile application. However, 64% of Generation X respondents and 58% of millennials are willing to switch providers simply for the ability to book online—in our view, highlighting the competitive significance of these features [emphasis in original].”2
My millennial children are never going to purchase healthcare in the same way that my wife and I did. Their generation and Generation X will bring their daily consumerism behavior to our industry, making it unrecognizable in the course of the next 4 years, and pushing us further along the road from volume to value.
No single report can adequately capture the totality of what I mean by “no outcome, no income.” However, this William Blair annual report, which kicked off 2019, reinforces my belief that you cannot improve the health of the population without its specific and direct engagement.
- Nash DB. The dream of value-based care. Am Health Drug Benefits. 2017;10(1):5-6.
- Daniels RS, Garro J. Consumer-Centric Healthcare: 2019 Update: Are We There Yet? William Blair Equity Research; January 5, 2019.
- Nash DB. Sunshine is the best disinfectant. Am Health Drug Benefits. 2017;10(4):163-164.