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To address their expectations, legacy healthcare providers must rethink their business model and look at new ways of providing care.
For years, healthcare leaders have hypothesized about the changes the tech-savvy, instant messaging millennial generation would bring to the industry, but the time for speculation has past. The oldest millennials are well into their 30s, and already are driving significant change in healthcare.
Hospitals and health systems must act now to reshape their business models to address rising demands from this generation, particularly as they pertains to routine care, say Paul Crnkovich, Managing Director, and Dan Clarin, Senior Vice President, Kaufman, Hall & Associates, Chicago, authors of the paper, “How Millennials Are Reshaping Healthcare’s Future.”
Their Influence Is Growing
Millennials recently surpassed baby boomers as the largest population segment at 73 million. Millennials’ healthcare spending is significant and growing, according to the authors. Combined with other young adults, they make up about 34% of the population and contribute about 21% of total healthcare spending. While older generations continue to be the biggest users of healthcare services, millennials are changing expectations across the industry with greater demands for improved healthcare access, value, and consumer experience.
Millennials grew up in a digital age. Technology has been integral to their lives since childhood, and they are accustomed to the conveniences it offers. These include easy access to information about a variety of goods and services, on-demand delivery, reviews and ratings for quick comparisons, and instant communication through social media and other forums.
For healthcare, technology is enabling greater access and focus on health and wellness information. Social media also enables consumers to easily seek provider recommendations from trusted friends and family, rather than relying on physician referrals or well-known health system brands. Overall, millennials are much less brand loyal than older generations. Anyone seeking their attention-including healthcare providers-must work to win their business again and again. Even if they had one good experience with an organization, it cannot be assumed they will return-as millennials will continuously shop for the best and most convenient care at the lowest cost.
Millennials have high expectations for consumer quality, convenience, and cost. Traditional and non-traditional providers are responding with services such as same-day appointments at One Medical or a CVS HealthHUB, or virtual visits via Teladoc, SOC Telemed, or Zipnosis. To best serve millennials’ needs, healthcare providers must learn to walk in their shoes. Providers must build better understanding of millennials’ expectations, and the factors that drive their decisions throughout the consumer healthcare journey.
Kaufman Hall recently conducted national consumer research involving more than 6,000 individuals. Results show that-particularly for millennials and other young adults-the healthcare journey increasingly begins online. Among adults ages 18-44, 43% identified where to receive care by searching online, compared to just 18% for those ages 65 and older, and 31% for those ages 45-64.
Nearly 50% of those ages 18-44 said they prefer to schedule a medical appointment online, compared to just 20% of those ages 65 and older. In looking at healthcare access, the survey results indicate that millennials and other young adults are frustrated by a lack of convenient care options. Nearly 50% of those surveyed said they do not have easy access to a video visit for basic healthcare needs.
They Trust Big Tech
Millennials are more inclined than older generations to trust big tech to steer their healthcare journey. Three quarters of adults ages 18-44 said they would use a mobile app developed by Amazon, Apple, or Google to help find and select healthcare services, compared to less than half of those ages 45 and older.
When asked who they would trust to develop the best online tool to help find and select the right healthcare services, 42% of those ages 18-44 indicated Amazon, Apple, or Google, compared to just 20% ages 45 and older. Older adults were more inclined to trust their health insurance company, or a local hospital or health system. Local hospital or health system was the option selected by the smallest proportion of young adults.
Millennials and other young adults said they are most inclined to comparison shop for outpatient services such as urgent care, outpatient surgery, or advanced imaging services. Today’s healthcare consumers tend to be pragmatic in their healthcare choices. Brand and clinical reputation are less important for everyday healthcare needs, but become increasingly important for more serious needs. Consumers indicate that convenient location is the most important consideration in seeking routine care, whereas the provider’s experience with the specific illness or procedure is the most important consideration in seeking care for a very serious healthcare need.
Don’t Make Them Wait
When asked how long they are willing to wait to see a primary care physician for a minor injury or illness before seeking another option, most millennials say they will wait no more than a day. About a quarter said they would not wait more than four hours. They are more open than older adults to using alternative care models-such as telehealth, virtual, and walk-in clinics-and are accelerating development of these models as a result.
Millennials also are demanding basic improvements to online search and accessibility capabilities. When asked what healthcare providers should focus on in making improvements, they indicated their top priorities as:
• Finding cost estimates for their healthcare needs;
• Conducting a video visit with a physician or nurse;
• Finding which providers accept their insurance; and
• Having the ability to call outside of normal business hours to schedule an appointment.
What Providers Can Do To Succeed
To meet the new demands of millennials and other young adults, healthcare providers should start with basic questions: Why will consumers choose you, and why will they come back to you? Addressing those questions requires a fundamental shift in mindset and business model.
Legacy providers must transition from an internal, hospital-centric emphasis on efficiency, to an external focus on capturing consumer demand. It’s not about “satisfying” consumers-rather it’s about “delighting” them by exceeding their expectations for convenience, service, and value. Doing so will drive new patient growth and increase patient loyalty, and result in improved financial performance.
Attracting and Retaining Consumers
The first step is to conduct a readiness assessment that clearly defines an organization’s current capabilities and resources relative to what is needed to transform its services, culture, and care delivery model to best serve millennials and other younger generations.
Effective solutions should be grounded in what Kaufman Hall refers to as the “Big 3 + 1,” which are access, experience, and pricing, all supported by and grounded in a solid infrastructure of leadership, branding, insights, analytics, and digital strategy. Serving millennials requires intense focus on the following elements:
Access-It’s all about the digital front door, and providing the kind of 24/7 on-demand access millennials are accustomed to in other areas of their lives.
Experience-Providers need to offer a contemporary experience, including high levels of service and real-time feedback opportunities for consumers.
Pricing-Organizations must recognize that millennials are highly price sensitive, which requires providing new, lower cost routine care delivery models and easy-to-find, accurate online pricing information.
Infrastructure-Organizations should build a solid foundation of insights and analytics to fuel decisions about access, experience, and pricing.
In determining where to begin once the comprehensive readiness assessment is complete, healthcare leaders should consider the key areas of access and pricing. Simply stated, healthcare providers need to understand the relative importance that consumers place on convenient access, service, and clinical reputation across a variety of services, and then price those services accordingly. This is pricing based on what the consumer is willing to pay-not on what has been negotiated with insurance companies. To achieve this, healthcare providers will need to aggressively explore alternative delivery models for routine care, and partnerships with retail-oriented providers, with the goal of delivering quality care at a lower cost.