While fidget spinners and unicorn-everything are dominating the pop culture scene, the rise of the consumer is easily the trending topic for health care.
In a world where high-deductible health plans, transparency tools and new entrants are increasing market competition and consumerist behavior, it's not shocking to hear increased buzz about the consumer-driven health care market.
However, unlike the ever-changing list of "hottest trends" on your Facebook feed, consumerism isn't likely to fizzle as fast as the avocado toast craze.
So what does that mean for the payers and providers that are actively positioning to succeed in this new marketplace?
Population health connection
The foundations for consumerism and population health are built on the same cornerstones. For the past few years, population health has been on everyone's mind. For organizations that have moved from thought to action, the pivot to a consumer-centered strategy will come easier.
The organizations most successful at population health have generally prioritized three key areas: accessibility, reliability and affordability. By doing so, they are taking first steps to put the wants and needs of patients — their customers — at the core.
Financial factors are driving a truly consumer-driven marketplace. Today, price, once an afterthought, has become a key differentiator. Multiple factors have converged to precipitate this shift, all of which result in consumers bearing a greater share of overall health care costs.
The new awareness of price occurs both when people buy a health insurance plan and when they get medical services. Higher deductibles, copays, coinsurance — they have made active consumers out of previously passive patients.
In addition, more than 40 states have enacted legislation requiring hospitals to post charges or rates.
In response, 85% of health plans and 60% of employers now offer price estimation tools; this easily accessible data is empowering consumers to make decisions about their own care by putting the information they need right at their fingertips.
Big losses are possible
Emerging competitors in the marketplace mean consumers have more choice than ever and can more easily shop, particularly for "commoditized" services.
This trend has the potential to affect providers in particular; notably, nearly half of a typical community hospital's commercial book of business is made up of shoppable procedures and services, such as high-volume orthopedic surgeries and various radiologic scans.
Despite increased competition, this propensity toward shopping creates a huge opportunity to influence consumer behavior.
A hypothetical four-hospital health system with $1.6 billion in net revenue from patient services may have as much as $40 million at stake if people can shop around for medical services.
If failing to prepare for the consumer-driven market is a recipe for disaster, moving forward with a consumer strategy before fully understanding your consumers' preferences and propensities for care can be equally dangerous.
Knowing the ins and outs of your market is vital. That starts with a deep understanding of your customers — who they are, how they make decisions, and how you can influence them. Studying them helps prioritize growth investments.
Monitoring the extent of consumer activation locally provides clarity on where to focus and how quickly to move. Diagnosis of preferences allows for better competitive differentiation and consumer-oriented product development.
This all adds up to no small shift in strategy. But the awakening of the health care consumer is powerfully good news for the mission of providers and payers. In other industries, the same forces have led to innovation, cost reduction and heightened value.
We should expect health care to be no different — for those organizations that proactively and deeply embrace consumerism today, the rewards could be truly transformational.
This article first appeared in Managed Care Magazine as "Why a strong consumer-centered strategy will never go out of style.