Why You Should Consider Your Patients 'Consumers’

It’s only natural for hospital decision-makers and staff to think of patients only as “patients,” or simply as someone who comes into the health system to get well. Yet the U.S. health care industry is starting to move in another direction: consumer-driven health care. Considering patients both patients and “consumers” is going to be a drastic change for hospitals. It has not been easy for health systems to begin adjusting to a new era of health care, especially as so many hospitals continue to experience revenue cycle management issues due to low patient collections. There is debate among physicians over how using the term “consumers” to refer to patients is a fundamental change to basic thinking about health care. However, hospitals must realize patients are no different from any other consumer paying for a service. As patients have more choice in selecting a health service provider, the quality of service will influence decisions. As patients choose where to have elective procedures, it will impact a hospital’s financial stability.

The efficacy of consumer-driven health care
It’s dangerous for health care executives to believe hospitals don’t have to change their way of engaging patients. Hospitals can’t sit by as their competitors transition their business goals and terminology toward consumer-based health care, Kelly Barnes, U.S. health industry leader for PricewaterhouseCoopers, said in the release of the company’s latest health industry issues report.

“While health insurance exchange implementation is driving headlines today – in reality the next 12 months will be marked by how well the industry addresses a range of core business challenges,” Barnes said. “Businesses must address rapid innovation and competition from nontraditional players, but above all they must respond to empowered consumers as customer-centric transformation sweeps health care.”

Consider a case study on consumer-driven health care in Switzerland by a Harvard Business School professor. Switzerland is currently the only developed country that has an established health care system that is based on the consumer, not the patient, according to Forbes. Many health plans in Switzerland have high out-of-pocket costs that account for 67 percent of total health care costs. In fact, parts of the Affordable Care Act are modeled off of Switzerland, Forbes reported. According to the news source, the 2007 Harvard case study noted care quality remains relatively equal in Switzerland, with plan amenities only altering care in little areas, such as whether the person receives a single room.

Switzerland’s consumer health system works in part because there is a high level of transparency within the industry, according to Forbes. Swiss consumers are required to have health care coverage but there is also risk adjustment for insurers, which means insurers are compensated based on the health of their enrollees.

The issues behind patients as ‘consumers’
Health care administrators and physicians are not familiar – or, really, on board – with using the term “consumer” to refer to patients. Dr. Leana Wen, an emergency physician who was the keynote speaker at the Empowering Healthcare Consumers: A Community Conversation conference held in Boston during May 2013, wrote in her blog thinking that people will pay for care just as they buy a car seems wrong to many medical professionals. The physician-patient relationship can suffer without the preparation, collaboration and implementation necessary to transition to consumer driven care. Wen wrote people might even be able to dictate the type of care they should receive, leading to unnecessary tests or procedures.

Thinking about people as consumers rather than patients is not that big of a change, however. The majority of patients already act like consumers and are part of the decision-making process. In fact, consumer-driven health care might end up being a great boon for the U.S. health industry. According to an article in Medicine Think, consumers often want to be aware of cost, meaning price transparency and cost estimations are going to be common in the future. Providing estimates and using patient friendly billing makes the transition to consumer-based health care easier for the hospital and the patient. By providing cost transparency up front and making the billing process more “consumer friendly” hospitals can mitigate confusion over billing and reduce the negative impact on hospital financials in the long-term.