The Myth Of Consumer-Directed Healthcare
At the heart of every healthcare expenditure is a consumer. This consumer determines whether and where to seek diagnosis, undergo tests, and follow up on the advice and treatment suggestions of medical professionals. Thus consumers have an enormous influence over medical costs. This fact is not lost on health plans, technology vendors, or even policy makers, all of whom have been seeking to enable "consumerism" by giving consumers tools to take more control over their healthcare decisions. But somehow these tools — which include tax-advantaged health savings accounts (HSAs), personal health records (PHRs), and even health coaching and behavior change support programs — never seem to unleash the consumer-driven revolution that proponents promise. For example, Forrester's research shows a decline in consumer engagement in the "consumer-directed health plan" market, even as adoption of health savings accounts increases. And despite pushes by both Google and Microsoft, only about 3% of US online consumers report having an Internet-based PHR.
Why is this? Are consumers incapable of taking charge of their healthcare decisions? Are they still shackled to the legacy of the Marcus Welby-era passive patient paradigm? Not likely. Successful campaigns by patient groups to accelerate market availability of treatments in the AIDS market suggest that motivated and empowered healthcare consumers can and do exist. And they can move mountains.
The real damper on consumerism in healthcare is lack of information. This is the paradox of the healthcare information age — consumers have more access to more medical information than they have ever had before. More than many other industries, the Internet has democratized access to information about health trends, medical data, and information about traditional and alternative health resources. But consumers still lack the basic information they need to make informed health decisions.
Consumer-directed health depends on consumers making cost-benefit decisions and trade-offs regarding their healthcare consumption. That's a difficult proposition. First, determining the benefits of tests and treatments depends on many factors, including evidence of efficacy, consumer preference, and the level of invasiveness or side effects of the treatment. As much as we know about medicine today, what we don't know is at least as vast. Emerging science in genomics, proteomics, and even our basic understanding of disease mechanisms and their comorbid interactions means that clinical knowledge doubles roughly every 18 months.
Surely the benefit side of cost-benefit trade-off decisions are complex enough. The cost side should be easy. But costs are obfuscated by insurers who want to protect their proprietary negotiating tactics and providers who want to be able to make up insurance shortfalls with their cash-paying patients. Try calling up a radiology center to find out what an MRI will cost you versus an x-ray. Most can't tell you until after they've prepared your bill. Similarly with health insurers, ask for your portion of the cost of a course of treatment or piece of durable medical equipment and you'll likely get a series of ranges and contingencies in response.
If the US wants to get serious about consumer-directed healthcare, we have some changes to make:
- We have to mandate that insurers and medical providers make their costs available to consumers. This isn't impossible. Pioneering efforts by Maine and New Hampshire have made comparative payment data available to consumers online.
- We have to teach consumers about the consequences of their choices—and make those consequences immediate and personal. Choosing more expensive care has to cost consumers more—especially if its cost can't be justified by a measurable difference in quality.
- We have to boost consumers' health and health-finance literacy—and hold stakeholders accountable for clear, plain language communication. Credit cards now have to clearly inform consumers of costs and charges, both short and long term. Health insurers should have to do the same.
Ultimately, solving the US healthcare crisis is a complex and multifaceted problem. Consumerism can and should be part of it.
This post originally appeared on the Harvard Business Review blog on April 27, 2010: http://blogs.hbr.org/cs/2010/04/the_myth_of_consumer-directed.html