Consumerism: “Activity in Search of Strategy”

Consumerism is a hot topic in health care. Whether you define it as (a) improved personalization (as Robert Sahadevan, Senior Vice President of Consumer Marketing & Analytics at Humana and formerly the VP of United Airlines’ Mileage Plus frequent-flier program does), or (b) understanding and meeting/exceeding customer expectations, or (c) encouraging patients to act like consumers by actively choosing where to spend their health care dollars, consumerism is a focus in practically every health care business across the country.

The trouble is, while consumerism is a focus, it seems much of this work in health systems and hospitals at least, is “activity in search of strategy,” according to KaufmanHall, a strategic, financial, and operational performance advisory firm.

The KaufmanHall 2018 Healthcare Consumerism Survey included more than 425 respondents across 200 health systems, stand-alone hospitals, children’s hospitals, and specialty hospitals. “Improving customer experience” was a top strategic priority for 90% of the respondents. Still, the survey found “these efforts need to be more strategic, more effective, and more rapidly implemented if legacy healthcare organizations are to grow and compete in an increasingly consumer-focused world.”

Where is the disconnect? Why is there so much activity that isn’t strategic or likely to be effective? Seemingly, it’s because these health care organizations are focused on the ways they would like to improve customer service, not necessarily on the ways consumers would like to see access and care changed.

Example 1: Consumer Access

The KaufmanHall 2018 survey respondents ranked high on access to bricks and mortar health care facilities. More than half said their organization had an urgent care center, 40% said they offered access to freestanding imaging sites, and outpatient centers were widely available.

More innovative care options, that some studies show are preferred by consumers, were not as common. Video visits were only available at 14% of the respondent facilities, and retail clinics were only available at 27% of health systems or hospitals surveyed.

Example 2: Consumer Convenience

Consumers who are accustomed to clicking a button and receiving a shipment later that day, or horrors, the following day, don’t want to wait a week or a month for an appointment to see a health care provider. Conveniences such as same-day scheduling of appointments, online scheduling, and extended hours are expected by consumers, but few organizations are delivering. The chart below shows only about a third of the KaufmanHall respondents offer same-day appointments or extended hours for primary care. Only 20% have fully implemented online self-scheduling.

Example 3: Consumer Frustration

Notably, interactions with the health care system that patients and consumers find frustrating are not typically much of a focus for health care organizations. One example is reducing office wait times. Just 17% of the KaufmanHall respondents have a full implemented initiative to address wait times. Another example is billing. It isn’t for lack of understanding billing as a customer pain point that organizations aren’t prioritizing it: “Billing is confusing and frustrating and stressful, and it is their last interaction with us,” one executive explained in the survey, yet only 28% of respondents had fully implemented customer-friendly billing statements. Organizations instead seem focused on changes easy for them to make, such as ensuring phone numbers are easy to find and providing customer service training for staff (see chart below).

Example 4: Pricing

“Of all the key areas related to consumerism in healthcare, pricing strategy provides the most room for improvement for the nation’s hospitals and health systems,” according to KaufmanHall. Asking any person who has interacted with the system, and indeed, most policymakers, you will get the same answer. Consumers need more information about the prices of the services or products they have been told to buy by their health care provider – whether a surgical intervention or prescription medication. Only 5% of the KaufmanHall respondents are “aggressively pursuing” consumer initiatives related to pricing strategy and/or price transparency. Only 10% list prices online and less than half can provide a consumer-requested price quote in a defined period of time.

Design Thinking Opportunity in Consumerism

We have written a book chapter titled, Using Small Step Service Design Thinking to Create and Implement Services that Improve Patient Care, for the upcoming book, “Service Design and Service Thinking in Healthcare and Hospital Management” from Springer Publishing (due out this fall). The chapter is about using design thinking in health care services and provides two case studies about organizations that have done it well. As the KaufmanHall 2018 State of Consumerism in Healthcare showed, many organizations are involved in activities that address the consumer experience, but most of these activities are not strategic aligned with what consumers actually want. Better understanding the customer – for example, by using the five-step design process – would likely improve these organizations’ efforts to exceed customer expectations. Until health care organizations can look outside their own experience, improving consumerism is likely to be very slow going.