Health systems show greater emphasis on consumer-focused strategies, but progress is slow

Hospitals and health systems are doing more to try to meet the rapidly changing expectations of today's healthcare consumers, but there's still a lot of room for improvement, according to a new report by Kaufman Hall.

The strategic and financial consulting firm's latest report, State of Consumerism in Healthcare: Activity in Search of Strategy, is based on results of the firm's annual survey of more than 200 hospitals and health systems nationwide. The survey shows that healthcare leaders across the country are placing greater emphasis on consumer-focused strategies, such as increasing access to care and enhancing the consumer experience. 

Despite those increased efforts, though, the findings indicate that initiatives generally lack a foundation of consumer insights and analytics, favor traditional over innovative approaches, and have not overcome longstanding problems with the consumer healthcare experience. That's poised to become an issue as healthcare is increasingly nudged into the realm of consumerism.

"It's easier to focus on fixing what's broken than it is to come up with new ways of doing things," said Dan Clarin, senior vice president of Kaufman Hall. "It's more comfortable, more familiar. It's also, from a consumer perspective, a bit simpler to ask people what's going wrong with their experience currently, and fix the things that are going wrong. While there's a lot of hard work that goes into doing those improvements, it's harder to wrap your head around a totally new way of doing things -- for example, instead of reducing wait times, eliminate a waiting room altogether."

The report's Healthcare Consumerism Index, which analyzes the survey results, provides a lens through which to view overall industry performance related to consumerism; the index divides organizations into tiers, with Tier 1 representing those who are leading the pack in terms of consumer-focused initiatives, and with Tiers 3 and 4 indicating there's still significant work to be done.

Only 8 percent of organizations responding to the survey are rated Tier 1 performers for aggressively pursuing consumer-centric strategies. Just 23 percent are rated Tier 2 performers for piloting consumerism initiatives and identifying needs relative to the organization's overall strategy, while nearly 70 percent of organizations are in Tiers 3 and Tier 4, indicating that they either have not yet begun, or are in the very early stages of their consumerism efforts.

"This is a new discipline for healthcare providers," said Clarin. "This is now new for Amazon or Walgreens or any number of retail and consumer goods companies. Their entire business is oriented around, 'What does the consumer want, and how do we best service that?' That kind of thinking is still new in healthcare. It's going to take time. It isn't easy to build that muscle memory, so to speak.

"Frankly, it's going to take more disruption to their traditional and existing business to drive more of the focus to consumers," he said. "It's not going to happen on its own. There need to be pressures."

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.

Looking at consumer access initiatives specifically, the survey results show that more innovative approaches to access are limited. Much of the focus continues to be on relatively traditional approaches, such as multi-service outpatient centers and ambulatory surgery centers. 

The rise of retail clinics in particular is forcing some healthcare organizations to rethink their business models. Such clinics offer convenient service and transparent pricing, along with immediacy -- while a patient may need to book an appointment with a primary care provider days or perhaps weeks in advance, they can pop by a local Walgreens and be treated that very day, knowing exactly how much it's going to cost.

"They're certainly more common than they once were," said Clarin. "CVS Health is the leader in that space right now. And a number of healthcare provider systems have begun to adopt that approach, whether building them on their own or partnering with Walgreens or Rite Aid or others. They really are different from urgent care in the level of service they can provide. Often they're more convenient, and quicker in and out, but that can't offer the range of services you see, especially in the ER."

Among the survey's other findings are that more than half of respondents said urgent care centers are widely available at their organizations; freestanding imaging sites were reported as widely available by 40 percent of organizations; 27 percent of organizations reported retail clinics as widely available; 14 percent reported video visits as widely available; and 17 percent reported e-visits as widely available.

Of all the key areas related to consumerism in healthcare, pricing strategy provides the most room for improvement for the nation's hospitals and health systems. Only 5 percent of organizations rated in the top tier in this category for aggressively pursuing pricing strategies and price transparency, while an overwhelming 74 percent are Tier 3 and 4 performers.

"Only one out of 10 say they've done this kind of work, and we think it's going to be critically important to understand what role price plays in the lives of consumers, and as price changes, what kind of impact it has," said Clarin. 

Clarin said there's still some work to do around prioritization.

"We would argue one of the main things that needs to be driving that better prioritization is a better understanding of consumers -- both what they tell you and what they don't tell you, and what you infer from observing them and really listening to them," he said. "That's one area where healthcare providers have a lot of room for improvement. The voice of the customer needs to play a more important role in how you prioritize your resources and your investment."

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com