Douglas FahlbuschDouglas Fahlbusch
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by Douglas Fahlbusch

Across the world today,  we are now seeing more than ever a greater accountability for consumers in regards to healthcare spending. As a result, and not very surprisingly,  more than a thousand companies have latched onto this growing phenomenon and are developing new digital/mobile technologies,  making it far easier for consumers to take greater control over their healthcare choices.

Compared to how it was a few years ago, consumers are now faced with paying a greater amount of their healthcare costs out of pocket. With  online banking, shopping, and travel reservations now the norm, consumers are also starting to alter their attitudes about healthcare costs, choices, and accessibility. In addition  there is more of an opinion on  who should control their clinical information and how much administrative complexity they should really have to put up with.

In recent research carried out, it is suggested that there is a growing separation in how providers and insurers are integrating and reconstituting their organizations, as well as how tech-enabled, financially accountable consumers want to interact with them. Consumers may put up more of a fight against the imposed restrictions currently in place which prevent them from deciding where, when, how, and from whom they should seek health care from.  

The following points are interesting to look at:

1.  Pricing transparency applications and online scheduling tools enable consumers to establish and use discrete, best-in-breed health services from a range of providers (some of whom are consulted remotely  via mobile e-visits). This is rather than accepting the limitations in benefits or access restrictions imposed by narrow networks, health maintenance organizations, or integrated provider systems.

2.  By enabling people to own, and control access to, their health data, digital/mobile health technologies eliminate the information asymmetry that has long benefited healthcare system incumbents and inhibited the creation of an informed healthcare consumer.

3.   Consumers can create their own personal health management “ecosystems,” quite literally in the palms of their hands, based on individual preferences for how they wish to monitor and manage their health and healthcare, as well as how they choose to manage their health benefits and payments. (Admittedly, this last scenario requires  development of an IT platform that would allow data from different technologies to connect, but such a platform is likely to be built within five to ten years.

No one knows the rate of which these developments will occur and  there is not enough evidence  at the moment to show the effectiveness of some of these technologies.  Adding to that, the healthcare sector has confounded many prior predictions of technological evolution. This has been partly due to the typical relationship between age and need, for example, younger people tend to adopt new technologies more rapidly, but older people usually have greater healthcare needs. However that aside when digital/mobile technologies are involved, eg, BlackBerry versus iPhone, or CD versus MP3) change has always been fast.

Research amongst technology innovators, investors and healthcare industry incumbents, as well as surveying thousands of U.S. consumers and analysing  the business models of  new entrants and other industry shapers,  led to the following 5 key findings:

  1. Consumers are starting to replace traditional healthcare services with digital ones  Although utilization trails awareness, inroads are being made, particularly among younger Americans. Millennials, for example, are twice as likely as Baby Boomers (and three times as likely as people born before 1945) to use email or text messages to communicate with physicians.
  2. Investment in these technologies is robust and growing

Although utilization trails awareness, inroads are being made, particularly among younger Americans. Millennials, for example, are twice as likely as Baby Boomers (and three times as likely as people born before 1945) to use email or text messages to communicate with physicians.

  1. New technologies address consumer dissatisfaction
  • self-service tools that make it easier to schedule appointments, renew prescriptions, and pay bills
  • “quantified self” and wellness tools that assess a patient’s health status, monitor adherence to treatment, or enable coaching, as well as devices that can be worn, ingested, or embedded in the human body
  • clinical-transparency tools that help patients use healthcare services more appropriately by enabling them to make more informed decisions
  • financial-transparency tools that help consumers to compare prices and benefits from different health plans and providers
  • virtual-access tools that enable consumers to consult with doctors online, to be monitored remotely, or to receive certain types of care at home
  • IT platforms that aggregate data from different tools and enable them to work together, as well as technologies that help consumers receive information through multiple channels.

 

  1. Who will pay remains unclear

Most of the stakeholders interviewed believed that employers, providers, and insurers will assume this responsibility.

 

  1. Implications for providers and insurers

The basis for competitive advantage changes. The geographic scope of competition, historically concentrated in metropolitan areas, could broaden, especially once digital access points, such as self-service tools, become more prevalent and price- and quality-transparency tools alert consumers to higher-value alternatives.

Consumers become clinical-data integrators. Increasingly, consumers could own and manage their clinical data, which would allow them to decide for themselves who should gain access to that information (and when) in clinical, transactional, and administrative settings.

The roles of providers and insurers evolve. Providers, especially physicians, could find themselves spending less time gathering information about their patients and more time helping them make sense of the information already gathered. Insurers may become trusted advisers, helping consumers to understand how best to manage their financial accountability and risk preferences. They’ll have competition for this role, though. Retirement and wealth advisers, for example, could include health-risk assessments and estimates of health costs in the advice they give clients.

 

To read more on the the findings and the report  itself, please refer to ‘How tech-enabled consumers are reordering  the healthcare landscape’ by Venkat Atluri, Jenny Cordina, Paul Mango, Satya Rao, and Sri Velamoor.

http://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/how-tech-enabled-consumers-are-reordering-the-healthcare-landscape

DFahlbusch
About DFahlbusch
Douglas has worked in healthcare for over 20 years, as a specialist anaesthetist and has a graduate diploma in management from the Australian Graduate School of Management. As a past Director of the Australian Society of Anaesthetists, being a patient and working with Adelaide hospitals, 1,000's of patients, nurses and doctors he has seen first-hand the need for a more efficient healthcare system. His passion is tackling waste and inefficiency by adapting innovations from other industries to healthcare and making healthcare a great place to be or work.

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How tech enabled consumers are changing the Health care landscape