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Retail Medicine a Big Shift for 2014

John Commins, for HealthLeaders Media, January 6, 2014

With the growth in high-deductible health plans accelerating, "the healthcare business model is starting to turn from wholesale to retail," says the managing director of PwC's Health Research Institute. That means insurers must be ready to offer new products in a different way.

For all the talk about the Affordable Care Act, population health, value-based reimbursements and Accountable Care Organizations, arguably the biggest "curve bender" for healthcare costs will be growth of the high-deductible health plans that force patients to become smarter consumers.

Savvy healthcare consumers bearing higher deductibles and co-pays will bring with them a list of expectations that come from the retail sector, including price transparency, access, convenience, and value.

"The big shift for 2014 is that the healthcare business model is starting to turn from wholesale to retail," says Ceci Connolly, managing director of PwC's Health Research Institute. "Instead of insurance companies selling to one large employer for thousands of employees, you now have individuals going online one-by-one and shopping. That means creating different products and creating different product plans. It means education and outreach and advertising that is very different."

The growth in high-deductible health plans is accelerating. Connolly points to annual PwC surveys of about 1,000 employers and coverage options for employees. In 2012 13% of the companies said they were offering only high-deductible plans for employees. That figure grew to 17% in 2013 and 44% in 2014 and 2015.

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3 comments on "Retail Medicine a Big Shift for 2014"


Davis Liu, MD (1/10/2014 at 10:15 AM)
No question that health care is shifting this way. Highly likely that patients will also suffer in the process despite the theory of consumerism is good. As Ceci Connolly noted correctly - "The mile marker I sometimes look to when is we moved from pensions to 401(k)s and that was about a decade until we had the vast majority of Americans in 401(k)s." The challenge is that it benefited employers and left employees with little. As noted in a Wall Street Journal article - The median household headed by a person aged 60 to 62 with a 401(k) account has less than one-quarter of what is needed in that account to maintain its standard of living in retirement, according to data compiled by the Federal Reserve and analyzed by the Center for Retirement Research at Boston College for The Wall Street Journal. Even counting Social Security and any pensions or other savings, most 401(k) participants appear to have insufficient savings. Data from other sources also show big gaps between savings and what people need, and the financial crisis has made things worse. The retail shift will occur in health care. There will be many who suffer. Unlike delaying retirement, one can't delay a medical problem. http://thehealthcareblog.com/blog/2011/03/07/why-consumer-driven-health-care-will-fail/ http://www.davisliumd.com/the-problem-with-health-insurance-exchanges-the-risk-for-patients-pension-plan-to-401k-analogy/

Mike Sinsheimer (1/9/2014 at 3:41 PM)
The continued move to consumerism will be interesting to gauge. As more and more consumers evaluate cost, the question is will they put off treatment or visits and if they do, how will that impact community health? Time will tell.

Patients Will Pay (1/9/2014 at 2:14 AM)
Sadly the assumption that shifting costs to patients will result in better outcomes has been shown to be flawed. What happens is simply that people put off care based on cost not outcomes and people with the highest deductible plans are also those least likely to be able to pay for their care. For a great example of how this plays out look at dental health - most people without adequate coverage simply put off preventive care and end up with even higher costs for crowns and root canals