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Healthcare Consumers Are Ready for Bundling (But Are You?)

April 11, 2013
by Mark Hagland
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A recent survey of healthcare consumers by Booz & Company finds that consumers are eager to receive their healthcare through bundled arrangements

On Jan. 30, the New York City-based Booz & Company announced the results of a survey of 1,000 U.S. consumers regarding their interest in receiving their healthcare via bundled care delivery offerings. That survey found that fully 78 percent of respondents told surveyors that the concept was appealing to them.

In releasing the results of the survey, Gary Ahlquist, senior partner in Booz & Company’s North American health practice, said in a statement, “Healthcare leaders know the time has come to figure out how to make high-quality, affordable care accessible to more people. This survey,” Ahlquist said, “shows there is an active appetite for change from traditional approaches to healthcare delivery, and suggests what a viable new model could look like.” The Booz survey was conducted online during the summer and fall of 2012.

Among the key results of the survey:

> Respondents indicated that they are increasingly willing to switch hospitals (50 percent) and medical specialists (45 percent) for bundles that are significantly lower-priced (meaning at least 10 percent less than existing coverage).

> Consumers showed a clear preference for bundled offerings from physicians, hospitals, and employers; 30 percent more consumers ranked those bundles as attractive choices compared to those offered by retail stores, online insurance aggregators, or brokers.

> Among the benefits available through bundles, patients saw the ability to provide input in their care processes, coordinated care, and warranties, as the most appealing. More than 50 percent of survey respondents ranked those as the top three benefits.

> A large majority of consumers (80 percent) expressed a preference for bundled coverage across all settings in the care continuum, from initial physician consultation to post-acute care and rehab.

Shortly after the release of the survey, HCI Editor-in-Chief Mark Hagland spoke with Minoo Javanmardian, a partner at Booz & Company who leads Booz’s payer-provider business in North America, and who was one of the four authors of the survey, regarding her perspectives on the survey’s results. Below are excerpts from that interview.

The results of this survey seem to indicate a growing awareness of pricing in healthcare. Would you agree?

Yes, I would, that is correct.

Minoo Javanmardian

And perhaps a growing sophistication about it, as well?

Yes. If you explain to consumers what a care bundle is—that if you have a condition and want to use the healthcare system and the bundle essentially delivers care end to end and ends fragmentation, and by the way, you know what it will cost—for consumers, it’s pretty appealing to them.

Were you at all surprised by the survey’s main findings?

I was not actually surprised by the fact that consumers are interested in the concept of bundles, particularly as you think about what the patients have to go through today as they access the system. Right now, they’re still having to put things together themselves for the most part. So in that sense, I was not surprised. What was interesting, though, was the issue of choice. And if the choice of physician and institution becomes limited in terms of the number who will or can do bundles, will the consumers have issues with limits on choice? What we found out was that that was not true; the only issue was around primary care, that they tend to be very sticky with their primary care physicians.

When it comes to bundles, if you say, here is the better value for you in a particular bundle, and here’s how you get it, and they are very interested—they’re more interested than we thought they would be. And the choice question becomes more important when it comes to their PCP, but much less so when it comes to the hospital.

Some of the specific survey results found that, on the one hand, healthcare consumers don’t want to travel far for care, but on the other hand, they see potentially having input into care processes, coordinated care, and warranties, as appealing, correct?

Yes, if they live in an urban area, they don’t want to travel beyond their urban area for care; but if they’re rural, they’re more willing to travel. Now, we didn’t ask one particular question—but if you’re a patient with cancer, we know a lot of patients go to places like MD Anderson, and such, and probably that would depend on the acuity of the condition. We didn’t test that, because we would have required a much larger sample. So yes, they prefer to get the care in a bundled fashion locally, but if rural, they would be willing to travel farther.

With regard to the questions on patient input into the care delivery process, what kinds of choices did you give them?

We gave them 10 choices. Here is the order in which those choices were appealing to them, with the most appealing choice first: the ability to provide input on care; a single, coordinated team providing care; the offer of a care warranty; one bill listing all costs; a fixed upfront, all-inclusive price; a team roster of the care team; a roadmap of the care course; third-party rating of providers; travel and lodging expenses covered; and concierge services.

So input into care processes, coordinated care, and warranties, were the three elements that were most appealing to those consumers surveyed. Was that at all surprising to you?