Value is king with consumers

April 13, 2009

As patient dissatisfaction grows with the U.S. healthcare system, consumers are shopping for value in all healthcare service areas.

Consumers are “shopping” for value across the entire spectrum of healthcare-in how they choose doctors, hospitals, health insurance programs and medications, according to experts.

As healthcare reform heats up in the White House, nearly 40% of consumers have expressed discontent with the status quo, rating the U.S. healthcare system a D or an F, according to the results of the 2009 Deloitte Survey of Health Care Consumers. A quarter of consumers have skipped care when they were sick or injured; two in five of those consumers have done so because they couldn’t afford it, were not covered by insurance or thought the costs were too high.

“They are actively comparing costs, quality and service, and then calculating whether options they consider satisfy their concept of value,” says John T. Bigalke, vice chairman and U.S. industry leader of Deloitte LLP’s Health Sciences and Government industry group.

“For plans, it’s not one-size-fits-all,” he says. “Some are willing to pay more; others are price driven. Some prefer plans that are built around a physician-centric Western medicine approach to health services; others want alternative care in their plan. The challenge to plans is understanding how each distinct segment of the enrolled population define value, then building insurance programs that optimize the value proposition.”

According to Bigalke, today’s environment for healthcare is vastly different than prior generations as a result of two major factors: vast amounts of information about doctors, hospitals, medications, devices and insurance programs is available online and in media, so healthcare is no longer a “quiet” industry.

And healthcare is expensive, the fastest growing expense in the household budget and a growing frustration to the majority of Americans who believe 50% or more of these costs are wasted, according to Bigalke. “Given alternatives for better service, better quality at lower cost, consumers will quickly adopt,” he says.

Managed health executives must retool strategies to enhance their value proposition to each consumer segment they seek to serve, says Bigalke.

Four focus areas should direct those efforts:
• In-depth understanding of the needs, wants and opportunities of consumers-rich analytics that go beyond claims data and call center volume analysis
• Creative benefit designs that accommodate customization of insurance programs without compromising necessary attention to lower premiums and out of pocket costs for enrollees
• Attention to self-care: building tools and resources that equip enrollees to care for themselves and avoid unnecessary tests, procedures and therapies that do not work
• Efficiency and scalability of core operations-in an environment where health costs are soaring, plans must aggressively drive costs out of their supply chain and operating models.