Healthcare is a Hassle

A recent survey of uninsured Americans by Oliver Wyman shows they are eager for new healthcare products and services, but don’t understand their options. It illustrates the importance of new products and consumer education efforts.

According to the survey of about 800 uninsured consumers likely to purchase coverage in the under-65 healthcare exchanges, 76% elected to purchase coverage rather than pay a penalty. Oliver Wyman estimates there are 51 million uninsured Americans, and about 18 million would not need to purchase insurance for themselves because they are below the Poverty Level cutoff. If the survey ratio holds true, that 76% would represent 25 million newly insured Americans.

“The opening of the exchanges is just the first step in changing U.S. healthcare from wholesale to retail,” says Helen Leis, Oliver Wyman partner in the Health & Life Sciences Practice. “By 2020, as employers opt out of health insurance or move to defined contribution programs, we expect that something like 100 million people will be making individual decisions about health insurance. To me, the survey shows that they are likely to display more variety and have more specific needs and wants than many health plans are anticipating.”

In the study, participants were offered a series of $50-a-month upgrades to coverage or service, as well as scenarios in which consumers would receive a $50-a-month discount for agreeing to change how they accessed the healthcare system or for embracing healthy lifestyle choices. According to the survey:

41% were willing to receive a majority of their medical care at a retail clinic located in a pharmacy or retail store

52% were willing to reach a healthy body weight

38% of those who smoked were willing to quit

48% were willing to interact with their doctor primarily online.

38% were willing to pay extra for 24-hour-a-day, seven-day-a-week access to doctors

26% would pay for coverage and access to alternative medicine.

While the study also found uninsured Americans are extremely cost-sensitive, Leis says there is reason for optimism that the exchanges could become laboratories for healthcare innovation.

“The real opportunity for health plans is to start creating value by solving the innumerable hassles consumers face in navigating the healthcare system,” she says. “If you think of what the Kindle did for books or the iPod for music, the grail for health plans is something that does the same thing for healthcare - making the system transparent, efficient, and integrated.”

The full report can be downloaded here: http://www.oliverwyman.com/insidetheuninsured.