Just this week came news that Amazon made another move into the healthcare space with the acquisition of PillPack, a Boston-based online pharmacy startup. This follows Amazon’s move earlier this year to partner with Berkshire Hathaway and JPMorgan Chase & Co. on a healthcare initiative to improve satisfaction and reduce costs for their companies’ employees. Just recently, the organizations tapped Atul Gawande, M.D., as CEO of the initiative.
For healthcare executive leaders, the stakes are getting higher in an era of growing consumer expectations and new competitors focused on access, convenience and low price. According to a new report by Kaufman Hall, a Skokie, Illinois-based provider of enterprise performance management software and consulting services, senior executive leaders at healthcare provider organizations are aware of the need to adopt consumer-centric approaches, but are struggling to implement these approaches. What’s more, the progress that is being made is not occurring fast enough to keep pace with more advanced industries.
Kaufman Hall’s 2018 State of Consumerism in Healthcare: Activity in Search of Strategy report is based on a survey of425 executives at 200 hospitals and health systems nationwide The survey examined four areas—access to care, consumer experience, pricing and developing consumer insights. Healthcare leaders across the country are placing greater emphasis on consumer-focused strategies, particularly around access to care and consumer experience. Yet, despite these efforts, initiatives generally lack foundational consumer-focused insights, the necessary analytics for success, and have not overcome longstanding problems with the consumer healthcare experience, the survey found.
In the report, one survey respondent said, “The traditional healthcare industry is so far behind in terms of meeting, much less anticipating, consumers’ expectations, that I fear for our ability to adapt quickly enough to remain relevant.”
According to Kaufman Hall’s Healthcare Consumerism Index, which categorizes organizations into four tiers, there are few top performers when it comes to consumerism, despite broad awareness of evolving consumer expectations. Only 8 percent of organizations are rated Tier 1 performers for aggressively pursuing consumer-centric strategies. These organizations outlined a consumer focus roadmap early on that has evolved over the years. Of the survey respondents, only 23 percent are rated Tier 2 performers for piloting consumerism initiatives and identifying needs relative to the organization’s overall strategy.
The majority of organizations, about 70 percent, are in Tiers 3 (52 percent) and Tier 4 (17 percent), indicating that they either have not yet begun, or are in the very early stages of their consumerism efforts. Compared with last year, a significant number of organizations have moved from Tier 4 up to Tier 3, but the percentages in Tiers 1 and 2 are relatively flat, according to the report.
In an interview with Healthcare Informatics’ Associate Editor Heather Landi, one of the report’s authors, Dan Clarin, senior vice president in Kaufman Hall’s strategic and financial plannig practice, discusses the healthcare industry’s progress to become more consumer-centric, the biggest challenges facing healthcare executives in this effort to meet consumer expectations, and the growing urgency for change as huge new competitors jump into the provider space. Below are excerpts of that interview.
What are the biggest takeawaysfrom this survey?
One of the things I would point out is that the level of interest in the topic of consumerism, particularly how healthcare providers can become more consumer-centric, is continuing to increase. Compared to last year, we saw a 60-percent increase in the number of organizations that completed the survey. The level of activity that we are seeing among healthcare providers is growing as healthcare providers have more initiatives underway, especially in the areas of trying to improve the customer experience and increase the accessibility of care; a lot more activity underway than even a year ago. The third point is that this continues to be a difficult area for healthcare providers. In some of the results of the survey, indications are that they’ve not been able to make as much progress as they’ve hoped, and they are behind in certain areas, such as pricing and building capabilities around generating a better understanding of the consumer.
Are healthcare organizations under pressure from the entrance of new competitors into the provider space, using the CVS Health and Aetna merger as an example?
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