The New Payer on the Block:
Understanding What Makes Today’s
Health Care Consumer Tick
Ryan Donohue
Thursday, Sept. 17
12:30 – 1:30 p.m.
Ryan Donohue
Ryan Donohue is a thought leader in the realm of health care consumerism. Ryan’s
mission is to inspire and persuade hospital and health system leaders to embrace
and engage the health care consumer. Over the past decade, Ryan has conducted
extensive research on the effects of consumerism on the U.S. health care industry.
Ryan is currently the corporate director of program development with National
Research Corporation, the largest surveyor of health care consumers in the US.
Through his research and subsequent findings, Ryan has authored several
publications on the topics of health care consumerism, brand strategy, and effective
marketing tactics including his most recent work: “Considering the Customer:
Understanding & Influencing Healthcare’s Newest Change Agent” published by The
Governance Institute.
Ryan also shares his message across the country via national, regional and local
health care and hospital associations. Ryan has worked directly with clients such as
Mayo Clinic, Baylor Scott & White, Tenet, Trinity Health, Middlesex Hospital and
other organizations big and small to understand and influence consumer decision
making in health care.
9/10/2015
The New Payer on the Block
Understanding What Makes Today’s Health Care Consumer Tick
Minnesota Hospital Association
September 17, 2015
The Governance Institute | June 6, 2011 | 1
Session Roadmap
• Blue Sky Exercise
• Six Degrees of Separation
• Building Value
• Discussion
The New Payer | September 17, 2015 | 2
1
9/10/2015
Blue Sky Exercise
The New Payer | September 17, 2015 | 3
Coast-to-Coast Research
• Since 2012, a “blue sky exercise” has been
conducted to qualitatively and quantitatively
research the consumer view of healthcare
• 176 consumers in 48 states participated in 2
hour focus group discussions
• 111,448 consumers polled
through national survey
• Research is ongoing
The New Payer | September 17, 2015 | 4
2
9/10/2015
The Bottom Line
Healthcare consumers
want hospitals to
stop acting like
hospitals.
The New Payer | September 17, 2015 | 5
What’s Wrong with Hospitals?
•
Hospitals play a key role in the “healthcare maze”
•
Hospitals often position themselves similarly – and focus
on the treatment of the “sick” and “dying”
•
Consumers believe they can stay
healthy enough to avoid the system
•
When consumers need treatment they
do whatever possible to keep costs down
•
What consumers really want from _________ is a 1:1
relationship with a trusted healthcare provider
SOURCE: NRC’s Blue Sky Exercise, 2012-2015
The New Payer | September 17, 2015 | 6
3
9/10/2015
Six Degrees of
Consumer-Provider
Separation
The New Payer | September 17, 2015 | 7
Perception: An Industry Ignored
• Healthcare consumers don’t think about
healthcare providers
• Healthcare isn’t an everyday product for most
• Healthcare providers are poor differentiators
• Hospitals in particular lack the focus to build a
strong relationship with consumers
SOURCE: NRC’s Blue Sky Exercise, 2012-2015
#1: AN INDUSTRY IGNORED
The New Payer | September 17, 2015 | 8
4
9/10/2015
Media: Healthcare is Broken
• The heat is on: healthcare costs are perceived as
careening out of control
• Though hospitals are only
part of the equation, blame is
often squarely on the provider
• “Hospitals and doctors are the
biggest contributors to high
medical costs.”
#2: THE BRIGHT LIGHT
SOURCE: Consumer Reports, 2008; TIME, 2013
The New Payer | September 17, 2015 | 9
Economics: Spending is Unsustainable
• Healthcare spending is 23 percent of today’s
federal budget, will be 30 percent in 10 years
• In the past 50 years, healthcare consumption
has more than tripled its share of the GDP
• Medical payments now account for 14 percent
of consumer spending
• Out of pocket costs doubled in last 10 years
SOURCE: CNN Money, Kaiser Family Foundation,
Credit Suisse, 2012-2015
#3: FOLLOW THE MONEY
The New Payer | September 17, 2015 | 10
5
9/10/2015
Technology: A Social Revolution
Instant access to information
Instant ability to share information
Constant connectivity everywhere
#4: INFINITE INFORMATION
The New Payer | September 17, 2015 | 11
Technology: A Social Revolution
• 1 in 3 use social media as source of healthcare info
• Consumers use and trust social media to find health info
(Avg age of user: 45 years old) (MN avg: 48 years old)
• Consumers trust social media info 5 times more than ads
• 52 percent of consumers will prefer a hospital in the
future based on engagement via social media
• 1 in 4 use mobile app as source of healthcare info
#4: INFINITE INFORMATION
SOURCE: NRC’s national consumer survey, 2014, National n size = 22,717, MN n size = 5,321
The New Payer | September 17, 2015 | 12
6
9/10/2015
Non-Healthcare: Outside Experiences
• Outside industries have faced consumer
revolutions and been forced to adapt
• Consumers experience other industries more
frequently and consistently than healthcare
• Consumers expect the same high level experience
• The pressure on healthcare providers to appease
the consumer will not go away
#5: THE GREENER GRASS
The New Payer | September 17, 2015 | 13
Lesson: Inversion of Product Delivery
Industry: Entertainment
• Be open to new delivery methods
• Know the power of convenience
• Expand the physical experience
into the online world
• Find new revenue opportunities
• Cautionary: Know when there’s
no substitute for in-person
#5: THE GREENER GRASS
The New Payer | September 17, 2015 | 14
7
9/10/2015
Non-Healthcare: Outside Experiences
• Healthcare has lost ground compared to other
industries:
The New Payer | September 17, 2015 | 15
Rise of Choice: Consumer-Driven Care
• Consumers don’t pay attention to healthcare but
when they do they see a broken industry
• Consumers are paying more than ever before on
healthcare but not necessarily seeing higher value
• Consumers can access more info than ever before
• Consumers expect more choices and influence from
healthcare due to outside industry experiences
#6: THE RISE OF CHOICE
The New Payer | September 17, 2015 | 16
8
9/10/2015
Don’t Believe in Choice?
The New Payer | September 17, 2015 | 17
Building Value
The New Payer | September 17, 2015 | 18
9
9/10/2015
Adopting a Consumer POV
• The consumer is making many decisions outside
of any pre-defined experience or episode of care
• There was a time when physician referrals and
insurance networks were the only playing fields
• Lifestyles have changed and what’s important to
the consumer has shifted along the way
• Hospitals must adapt to an emerging and
uncomfortable consumer climate
The New Payer | September 17, 2015 | 19
Understanding the “Care Journey”
Health providers will do well to treat the patient AND
the consumer as they make the “journey of care”
C
C
P
Passively
Discussing Engaging in
receiving healthcare
Wellness
health info with friends Activities
C
Searching
online for
info about
problem
P
C
Meeting
Discussing
with Doctor healthcare
to discuss
options
options
with family
P
C
P
Seeking
treatment
at local
hospital
Discussing
healthcare
experience
with others
Postdischarge
follow up
and rehab
C
Final
assessment
of entire
care journey
SOURCE: NRC’s Blue Sky Exercise, 2012-2014
The New Payer | September 17, 2015 | 20
10
9/10/2015
Providing Healthcare
• Consumers are receptive
to personalized messaging
• Wellness will be an early
access point to the consumer
• Telemedicine may foster
earlier relationships
• Hospitals must transcend
“healthcare-only” status
The New Payer | September 17, 2015 | 21
Providing Healthcare
If your local hospital decided to promote healthy living
and wellness, which of the following activities or ideas
would you find valuable?
44.3
40.5
Education sessions (CPR, good nutrition, etc.)
36.9
Newsletter or publication on healthy living
42
35.2
37.7
Activity-based clubs (walking club, yoga, etc.)
35.1
35.8
Community health/wellness fairs
32.8
Website/app for health/wellness tips
Other
29
4.4
5.8
National
Minnesota
SOURCE: NRC’s national consumer survey, 2014, National n size = 22,717, MN n size = 5,321
The New Payer | September 17, 2015 | 22
11
9/10/2015
Adopting a Consumer POV
• Becoming a provider of health & healthcare
means understanding the consumer & patient
• Providing health means engaging in activities
which provide low or no revenue now but
provide high potential revenue later
• Consumers want more than simply healthcare
services and they are searching for a provider
• Hospitals refusing to change will suffer
The New Payer | September 17, 2015 | 23
Living in a World of Brand Parity
The New Payer | September 17, 2015 | 24
12
9/10/2015
The Rise of Convenience
What was your primary reason for your last inpatient stay?
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Convenience
Insurance
2010
2011
Doctor
Recommendation
2012
2013
Quality
2014
SOURCE: NRC’s national consumer survey, 2010-2013, average n size = 272,336
The New Payer | September 17, 2015 | 25
Loss of Hospital Relevance
How relevant is your local hospital to you personally?
69.6
68.5
68.4
65.3
2010
2011
2012
65.1
2013
2014
SOURCE: NRC’s national consumer survey, 2010-2013, average n size = 272,336
The New Payer | September 17, 2015 | 26
13
9/10/2015
Lack of Organizational Consistency
The New Payer | September 17, 2015 | 27
Declining Differentiation Among Hospitals
70%
60%
50%
40%
30%
20%
10%
0%
2010 Total
2011 Total
2012 Total
2013 Total
SOURCE: NRC’s national consumer survey, 2010-2013, average n size = 272,336
The New Payer | September 17, 2015 | 28
14
9/10/2015
Effects of Infighting
• In an effort to differentiate – many hospitals will
attack each other publicly
• Consumers already think negatively of hospitals
and infighting spectacles only further this truth
• In a typical market – when two hospitals fight
each other they both see losses in differentiation
• There are ways to differentiate without dragging
the other guys (and yourself) through the mud
The New Payer | September 17, 2015 | 29
Ranking Performance
There are efforts underway to measure and rank the
performance of local hospitals. Which of the following
entities would you prefer to receive this information from?
29.2
Local hospital
32.7
26.7
28.6
Research firm
15.1
16.5
Insurance company
14.5
12.1
Government agency
9.7
Media outlet
Other
7.2
4.8
2.9
National
Minnesota
SOURCE: NRC’s national consumer survey, 2014, National n size = 22,717, MN n size = 5,321
The New Payer | September 17, 2015 | 30
15
9/10/2015
Popular View on Population Health
If you had to select one of the following to be primarily responsible for
the health of your community, who would you select?
50%
45%
43%
Hospitals & Health Systems
40%
Don't Know/Not Sure
35%
30%
Nutrition/Fitness/Health
Companies
25%
Health Insurance Companies
20%
15%
Local Government
10%
Local Employers
5%
0%
1
SOURCE: NRC’s national consumer survey, 2014,
National n size = 22,717, MN n size = 5,321
MN view on
hospitals = 49%
The New Payer | September 17, 2015 | 31
Living in a World of Brand Parity
• Consumers increasingly box hospitals together
• ‘Hospitals’ collectively must raise the bar on
what’s important to consumers
• ‘Hospitals’ collectively will face increased risk
from invasive, non-healthcare brands
• Moving to a more transparent model will require
cooperation and consistency among hospitals
• Transparency is vital to gain consumer trust
The New Payer | September 17, 2015 | 32
16
9/10/2015
National View of Price Transparency
Do you believe hospitals are transparent about the
prices of the services they provide to patients?
Yes
13.3
No
62.7
Don't Know
24
Don't Know
No
Yes
SOURCE: NRC’s national consumer survey, 2014, National n size = 22,717
The New Payer | September 17, 2015 | 33
National View of Price Transparency
Do you believe hospitals are transparent about the
prices of the services they provide to patients?
Yes
13.3
12.6
62.7
No
Don't Know
61.9
24
17.1
National
Minnesota
SOURCE: NRC’s national consumer survey, 2014, National n size = 22,717, MN n size = 5,321
The New Payer | September 17, 2015 | 34
17
9/10/2015
National View of Price Transparency
• Minnesota ranked 8th out of 48 states
• Northern states (MD, MN, VT) ranked in top 10
• Southern states (TN, MS, AR) ranked in bottom 10
• More northern states were seen near the top –
in those states price or cost of services was found
to be a less potent driver of customer frustration
The New Payer | September 17, 2015 | 35
The Future of Price Transparency
• Certain healthcare stakeholders are aggressively
adopting a price transparent strategy
• Resources which allow patients to pre-determine
price ranges are cropping up
• Market forces are overlapping with legislative
forces to create pressure on providers
• Price transparency won’t simply go away
The New Payer | September 17, 2015 | 36
18
9/10/2015
Consumers on Healthcare’s Triple Aim
When considering changes in healthcare, will the following
increase, decrease, or stay the same in the coming year?
6.1
14.9
Access
National View
59.1
13.9
6
Increase greatly
Increase somewhat
Stay the same
Decrease somewhat
Decrease greatly
5.9
14.5
Quality
60.4
13.3
5.9
18.8
34.4
40.6
Cost
3.6
2.7
0
20
40
60
80
100
SOURCE: NRC’s national consumer survey, 2014, National n size = 22,717
The New Payer | September 17, 2015 | 37
Consumers on Healthcare’s Triple Aim
When considering changes in healthcare, will the following
increase, decrease, or stay the same in the coming year?
3.8
15.3
Access
Minnesota View
64.9
12.5
3.5
Increase greatly
Increase somewhat
Stay the same
Decrease somewhat
Decrease greatly
2.4
15.8
Quality
64.7
13.5
3.5
18.8
34.4
40.6
Cost
3.6
0.7
0
20
40
60
80
100
SOURCE: NRC’s national consumer survey, 2014, National n size = 22,717, MN n size = 5,321
The New Payer | September 17, 2015 | 38
19
9/10/2015
Considering the Consumer
• Consumers expect more from healthcare
• Consumers view local hospitals as a collective
• Consumers are looking for new ways and new
partners to manage their health
• Consumers remain dissatisfied with hospitals
yet provide feedback necessary to rebuild trust
• Hospitals must decide to embrace the consumer
The New Payer | September 17, 2015 | 39
Closing the Gaps
INDUSTRY IGNORED
Ensure your customers are
aware of your services
HARD ECONOMICS
Be price transparent if
possible; inform on cost
MEDIA COVERAGE
Tell your story through targeted
marketing and PR
INFINITE INFORMATION
Develop digital strategy; use
web/social/mobile to engage
OUTSIDE EXPERIENCE
Tout customer experience and
show parallels to others
RISE OF CHOICE
Embrace choice and welcome
the discerning customer
The New Payer | September 17, 2015 | 40
20
9/10/2015
What Happens Next?
• Consumer expectations won’t change overnight
• Hospitals are in a long war to win over the masses
• The ‘collective hospital’ mindset lends itself to
cooperation now in order to reap benefits later
• State hospital associations are in a position to
boost cooperation and present believable value
through consumer-centric ideas and actions
The New Payer | September 17, 2015 | 41
The Empty Chair
The New Payer | September 17, 2015 | 42
21