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1
Consumerism: Strategies to Meet New Market Demands and
Rising Expectations
2
Speaker Introduction
Douglas Ivan Thompson, MBA, FHIMSS
Senior Research Director
The Advisory Board
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3
Conflict of Interest
Douglas Ivan Thompson, MBA, FHIMSS
I receive a salary from The Advisory Board
Other divisions of The Advisory Board sell software products that address consumer needs.
4
Agenda
• The Times They Are A-Changing – What’s New
• The Business Case for Consumerism in Healthcare
• Four Imperatives for Consumer Success – Lessons from Amazon
• Meeting the New Performance Standard – How IT Can Help
5
Learning Objectives
• Describe the behavioral and health care patterns of passive and active
healthcare consumers
• Address how expectations differ by patient archetypes
• Discuss a business case for competing on the basis of consumer experience
• Share strategic imperatives to establish a consumer-focused value
proposition, set a high standard of transparency and increase consumer
loyalty, including the consumers point of view
• Highlight new and established technologies required to support these
strategic imperatives
6
Benefits of Using IT to Meet Consumer Needs
Increase
Consumer
Loyalty
By delivering excellent
service that exceeds
patient expectations
Improve
Patient
Engagement
Through better
information, service,
and responsiveness
The Times They Are A-Changing
The doctor-patient relationship has evolved since Marcus Welby, M.D.
The Old Reality
IMA
GE
CR
ED
IT: P
ER
WIK
IPE
DIA
TH
IS IM
AG
E I
S IN
T
HE
PU
BLIC
DO
MA
IN
Now you
listen to me!
New Consumer Expectations
Three forces are driving increased healthcare consumerism
More Skin
in the Game
High-deductible health
plans, increasing co-
payments, employers
dropping coverage
More Choices
for Care Delivery
Standalone ambulatory
care centers, retail clinics,
concierge medicine, etc.
Increased
Transparency
Improved information
about cost, quality,
convenience of
individual providers
Source: Advisory Board research and analysis.
Loyalty vs. Satisfaction
Patient satisfaction is a low bar to clear, and doesn’t guarantee loyalty
Why Doesn’t Patient
Satisfaction = Loyalty?
• Patient satisfaction is gained
when expectations are met for a
given transaction or encounter
• Patients generally have low
expectations of provider service
levels—satisfaction is far from
“delight”
• Many patients don’t perceive a
real difference between their
health care providers
• So it doesn’t take much to
convince a patient to switch
providers?
Source: Advisory Board research and analysis.
A Tale of Two Consumers
A new type of healthcare consumer is emerging
Traditional Consumer
65+ the Most Promising to Be Loyal
of 65+ respondents
definitely staying with
their current PCP
70% 21%Avoiding travel was 21%
more important to
consumers ages 65+1
• I’m loyal to my long-time PCP
• I pick specialists and hospitals
based on my PCP’s referral
and my payer’s coverage
• I trust the doctor to decide the
best care for me
• Medical professionals are
responsible for my health
• Medicine is a mystery to me
• I change doctors based on
convenience and price
• I do my own research on-line
• I pick providers based on
convenience, price and service
• I make my own care decisions
• I am responsible for my health
• I am educated about my
conditions and treatments
1. Compared to millennials when deciding where to get surgery.
2. Hospital Outpatient Department and inpatient payments. Source: Advisory Board research and analysis.
New Consumer
Consumer Archetypes
Different types of consumers want different things from their providers
PwC’s “Experience Segments”
Full-Service Frank
Gen X and Y (18-49),
income $50 - $75K,
both genders, lives in
suburb of major city.
Top wants: hassle-
free issue resolution,
good website
content.
On-the-Go
Gina Gen X (33-
49), income
>$100K, mostly
female, lives in
medium/
metropolitan
city. Top wants:
accurate claims
payment.
Traditional Tom
Retirees (66+),
income $25 - $50K
and >$150K, mostly
male, lives in small
city or town. Top
wants: extensive
provider network,
accurate billing.
Brand-Aware
Brenda Boomer
(>50), income
>$100K, mostly
female, lives in
suburb of medium-
sized city. Top
wants: accurate
claims payment,
extensive provider
network.
Budget Brad
Boomer (>50),
income <$50K,
both genders,
lives in suburb of
major city. Top
wants: accurate
claims payment,
extensive
provider network.
Sources: Experience Radar 2012, PwC; art credit: Doug Thompson.
Market Postures
Different types of consumers require different value propositions
Community Pillar
Purchasing Ease
Simplify health care
purchase and use of care
Bargain-Basement Pricing
Win ultra price-sensitive consumer
through rock-bottom pricing
Solutions-Focused
Defend premium price through
product and service
enhancements
Blue Chip Quality
Showcase reputation, clinical
outcomes to win most complex
business
Status Quo New Consumer-Oriented Value Propositions
• Most systems act as the
community pillar today
• Strategy capitalizes on
existing familial connections
and a long-standing history in
market
• Consumers typically see the
community pillar as the default
option, selecting a provider on
preexisting use and trust
Source: Advisory Board research and analysis.
What Would You Build?
Disconnect Between Historical Investments and Patient Problems
Source: Advisory Board research and analysis.
A New Delivery System
Starting from scratch provides opportunity to re-imagine system
Beginning with Patient-Centric
Primary Care Offerings
Clinics without
waiting rooms
Same-day, walk-
in appointments
E-visit
availability
Key Features of Kansas City Locations
Portal access to visit
notes, lab results
On-site healthy
cooking demos
Access to life
coaches
Adding Key Specialties to the
Service Mix Over Time
GI1
Cardiology
Women’s
Services
• Clinicians are mix of former St. Joseph
practitioners and new hires
• Salaried model for two years, then transitioned
to RVU2-based model with quality incentives
Establishing a Consistent Physician Culture
1) GI = Gastroenterology; 2) RVU = Relative value unit.
Orthopedics
Dermatology
Pain
Management
Source: Advisory Board research and analysis.
Traditional Providers Also Responding
Geisinger CEO: We want to be Uber, not Blockbuster
"If we can get that Amazon connect-
ion to people we have the chance to
be the next Uber. If we don’t, I think
we become Blockbuster."
David Feinberg, Geisinger CEO, MD
Case in Brief
• Physician-led integrated health system based out
of Pennsylvania
• Geisinger gives money-back guarantees to
dissatisfied patients
• The patients decide how much they get back—no
questions asked
• In six months just 74 patients asked for their
money back, totaling about $80,000
• 50% of nearby Shamokin city residents are
diabetic and 30% don’t know where their next
meal is coming from
• When diabetic patients order insulin from a
Geisinger pharmacy, they also get a week’s worth
of tasty, diabetic-safe food delivered
Source: Advisory Board research and analysis.
Loyalty - The Ultimate Consumer Goal
Experience key to driving repeat business
Source: Advisory Board research and analysis.
The Business Case for Loyalty
Opportunity for repeat business overshadows value-based purchasing
Source: Advisory Board research and analysis.
Earth’s Most Customer-Centric Company
Amazon’s focus remains unchanged
Source: Advisory Board research and analysis.
How They Do It
Four imperatives drive Amazon’s success
Source: Advisory Board research and analysis.
Playbook for a Consumer-Focused Health System
How IT can help meet the new performance standard
Source: Advisory Board research and analysis.
1. Embed and Customize Provider Search
All roads lead back to your health system
Source: Advisory Board research and analysis.
Embedded Where?
Start with Google and WebMD and go from there
Source: Advisory Board research and analysis.
How WebMD Wins Big in the
Consumer Space
High-Ranking SEO3 Results
Trusted Information Source
Streamlined Online Experience
9/10
Health Searches
Lead to WebMD
The WebMD Audience is Highly Engaged…
9.8Average number
of minutes spent
on WebMD2
10Average number of
pages viewed per
visitor to WebMD
2015 Search Share by Provider
2015 Ad Revenue by Search Engine
Provider Search in WebMD
Providers shown based on search terms
Source: Advisory Board research and analysis.
The Rich Getting Richer
Spotlight initiative expands WedMD value to providers
Source: Advisory Board research and analysis.
Customize Local Provider Search
Differentiate based on coordination, integration, depth of knowledge
Source: Advisory Board research and analysis.
Pardee Select Customizes Provider Search
Online dating comes to healthcare!
Source: Advisory Board research and analysis.
2. Automate Price Estimates
Lack of information loses patients even if your price is cheaper
Source: Advisory Board research and analysis.
Pricing Information Consumers Want
Estimates growing more common, guarantees desired but unusual
Source: Advisory Board research and analysis.
It’s Harder Than It Looks
Requirements complex for out-of-pocket payment estimation
Source: Advisory Board research and analysis.
Sample VendorsOffer a Wide Range of Functionality,
Including Turn-Key Solutions
Clear IQ™
Payment Navigation Compass™
EMR vendors
SurePayHealth™
3. Expose Digital Self-Scheduling Platform
Let patients buy healthcare when they are ready
Source: Advisory Board research and analysis.
Realistic Future Vision
Integrated search, price estimation and scheduling
Source: Advisory Board research and analysis.
4. Continue to Advance Virtual Care
Technology improving patient access, convenience
Source: Advisory Board research and analysis.
5. Enable Hospital Way-Finding
Beacons keep patients from getting lost in the hospital
Source: Advisory Board research and analysis.
Key Takeaways
Improve patient access for greater convenience
Source: Advisory Board research and analysis.
6. Standardize Processes
Geisinger standardizing care delivery…and now the patient experience
Source: Advisory Board research and analysis.
IT Infrastructure for a Reliable Experience
EMR, BI, BPM/workflow, CRM, point applications
Source: Advisory Board research and analysis.
7. Report Quality from a Consumer Perspective
Assess whether the consumer’s problem was solved
Source: Advisory Board research and analysis.
Key Takeaways
Commit to process reliability through automation and measurement
Source: Advisory Board research and analysis.
8. Upgrade Cost Accounting System
Needs for cost data growing with consumerism
Source: Advisory Board research and analysis.
What Should You Charge?
New market postures require new information
Source: Advisory Board research and analysis.
One of These Things Is Not Like the Others
Activity-based costing the gold standard – for now
Source: Advisory Board research and analysis.
Key Takeaways
Cost accounting a key to affordability
Source: Advisory Board research and analysis.
Building a Longitudinal Relationship
Develop services, capabilities that drive loyalty to the health system
Source: Advisory Board research and analysis.
9. Gather and Use Real-Time Patient Feedback
Serve patients better, fix problems before they leave the hospital
Source: Advisory Board research and analysis.
A Call Button In Every Patient’s Hand
App Offers Instant Opportunity for Feedback and Recovery
Source: Advisory Board research and analysis.
Acute Care Patient Portals
Real-time patient feedback just one capability
Source: Advisory Board research and analysis.
Staff Operated Feedback Systems
Support service recovery and systematic process improvement
Source: Advisory Board research and analysis. *Pseudonym
Participating In The Conversation
Social media monitoring brings new opportunities…and risks
Source: Advisory Board research and analysis.
10. Integrate Portal Capabilities With Apps
Loyalty drives portal use, not the other way ‘round
Source: Advisory Board research and analysis.
Kaiser Integrates Portals and Apps
Multiple data inputs, multiple user options
Source: Advisory Board research and analysis.
11. Boost Retention With Loyalty Programs
Healthcare payers and providers learning from other industries
Source: Advisory Board research and analysis.
12. Improve the Billing and Payment Experience
The last impression is the lasting impression
Source: Advisory Board research and analysis.
Moving to Patient-Centered Billing
St. Luke’s overhauls billing and payment process
Source: Advisory Board research and analysis.
Key Takeaways
Focus on making it easier to stay, and harder to leave
Source: Advisory Board research and analysis.
Source: Advisory Board research and analysis.
Playbook for a Consumer-Focused Health System
How IT can help meet the new performance standard
Source: Advisory Board research and analysis.
Playbook for a Consumer-Focused Health System
How IT can help meet the new performance standard
57
Benefits of Using IT to Meet Consumer Needs
Increase
Consumer
Loyalty
By delivering excellent
service that exceeds
patient expectations
Improve
Patient
Engagement
Through better
information, service,
and responsiveness
58
Questions
• Contact: Douglas Ivan Thompson – [email protected]
• Please complete the online session evaluation