Providers Lag as Healthcare Consumers Set Agenda

New players in healthcare are gaining a toehold with frustrated consumers who are "ready to abandon traditional care models for ones that echo experiences in banking, retail and entertainment," research from PwC's Health Research Institute indicates.

Healthcare consumers appear willing to dump the doctor's office for cheaper and more convenient retail and remote alternatives that could amount to tens of billions of dollars in lost revenues for traditional providers if they fail to adapt, according to a report from PwC's Health Research Institute.

Despite controlling nearly 20% of the economy, traditional healthcare is years if not decades behind other industries when it comes to adopting a business model and technologies that assess and meet consumer needs.

With traditional players dragging their feet, consumers are taking the lead with increasing demands for pricing transparency, extended office hours, telemedicine and other and other innovative and consumer-friendly uses of technology that other sectors of the economy have used for years.

New players in healthcare are gaining a toehold with frustrated consumers who are "ready to abandon traditional care models for ones that echo experiences in banking, retail and entertainment," PwC says.

Retail Medicine Syncs with High-Deductible Health Plans

Chris Wasden, a managing director and global healthcare innovation leader at PwC, spoke with HealthLeaders Media about his company's report and what its findings mean for traditional providers. The following is an edited transcript.

HLM: How is the role of the consumer changing the way care is delivered?

CW: Increasingly, consumers are really forcing providers to try new things because providers are not going try new things on their own. [This is] because providers think the old way is just fine and they don't know how to do it a new way and they don't want to figure out how to do it a new way.

So it's the consumers who are saying 'I am going to be an early adopter and try something new.' That is putting pressure on the physicians to try something new. So this is going to be consumer-driven and led, not physician-driven and led.

HLM: How does traditional healthcare stack up to other sectors in the use of technology?

CW: Other industries became digital decades before healthcare became digital. Banking, for example, became digital in the 1970s with digital data sharing around money transfers. You've got the digitization of media and retail that occurred around the turn of the century.

Healthcare didn't become digital until just a couple of years ago. We are four decades behind finance and one to two decades behind most other industries that have been transformed through digital technology. You can't create these new business models that we see in banking and retail as well as media if you don't have digital information.

HLM: Why is traditional healthcare a laggard on technology?

CW: It's been a mom-and-pop industry that has been very local in nature and hasn't ever been scaled on a mass basis where leveraging technology for economies of scale made a difference. When you look at traditional healthcare providers, physicians for example, their view was that adding this digital overlay was unnecessary.

It was an overlay in addition to what they would do on a paper basis. They said, 'Look, if you ask me to put digital information into an electronic health record, I will see fewer patients, it will be more cumbersome, and it provides no value to me or the patients. It just provides value to some other higher healthcare systems of organization and so unless you are willing to pay me to digitize this information, I am not going to do it.'

So, what happened with Obamacare is that they created carrots and sticks to create additional information.

Healthcare providers are also very traditional in the way they provide care. They follow what they learned in medical school and medical schools and haven't even been teaching about digital healthcare until the last couple of years.

You have an entire industry that is trained on analog protocols that have never required digital information so nobody knows how to do it.

Unlike a big industrial company that has policies and procedures that they apply en masse across the entire organization, every doctor has the freedom to practice medicine any way he or she wants to. So there has not been the imposition of 'cookbook medicine' on doctors.

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HLM: Customer satisfaction has been a mantra in retail forever. Why is it such a challenge in healthcare?

CW: Whether it's the pharmaceutical companies, device makers, payers, or providers, nobody considers the patient as their customer so they've never tried to come up with solutions that were consumer-friendly or consumer-centric.

The only time that was considered valuable was the physicians' time. So the economics is around how much you pay the physicians and the clinicians and how much of their time is used. Whereas, if you look at other industries, they view consumers' time as valuable.

They are trying to come up with solutions to save the consumers' time. How many new healthcare solutions do you see that say 'we can decrease the time it takes to get an appointment or the amount of time it takes to visit the doctor or the time in the waiting room?'

Nobody cares about that in healthcare, whereas in every other industry they do.

HLM: Your survey showed that people ages 35–54 were most receptive to new care delivery models. Why?

CW: Younger people don't go to doctors and aren't ever sick. It's difficult to get them engaged in healthcare service models when they don't use them. In the 35–54 age group you have people who are young parents going to the doctors all the time with ear infections and bumps and bruises.

If you have new care delivery that cuts the time in half, they are interested.

They are also getting into their 50s where they start to have some of their own problems and in many cases they are managing the cases of other people such as their parents. They're very interested in technologies that help them better manage someone else's healthcare more efficiently because they have a full-time job. They're busy. If they can do things over the phone, using apps and other remote services they're all in for that.

Most healthcare providers and systems are not providing these types of options. They will say the reason they don't provide them is because patients don't want them. It's a chicken-and-egg thing. How do you know if a patient doesn't want them if they have never tried them before and they don't know what they are?

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HLM: We've been hearing about the transformation of healthcare for years. What is different this time?

CW: The risk is being shifted to the consumer. I am on a high-deductible health plan at work, which means I bear the first $5,600 of risk. So, when my wife called and said 'the doctor says I need an MRI,' I said 'I don't think so. Let's ask the doctor four questions and see what happens.' She asks the doctor:

1. 'Do you know how much the MRI costs?'
   He says 'no I don't but I will find out.' It was $2,400 dollars.
2. 'Doctor, if you get the MRI image will you change your care for me?'
   He said 'No it's not going to change anything at all.'
3. 'Doctor, do you know I'm on a high-deductible health plan?'
   'I had no idea at all.'
4. 'Doctor, do I still need the MRI?'
   'No you don't.'

I wouldn't ask those four questions if I didn't have a high-deductible health plan. That is an important change. You change the risk and you start changing the way the risk is managed.

The other thing is that we do now have technologies that we can use for these things. The virtual care where you can take a picture with your smartphone, send it to the doctor, he can look at it and give you an opinion. In a couple of minutes you can resolve a problem that would have with the old model taken a couple of weeks.

Telemedicine is Retail Health Clinics' Newest Tool

And you have people that want to experience things in healthcare like they experience everywhere else. When I buy something from an online retailer they know me and they provide recommendations to me and I never have to input the same information twice.

Whereas in healthcare I have to give you the same information every time I see you. Have you no memory? Have you no records? Consumers are demanding this digital experience that they have everywhere else in their lives. The organizations that can deliver that now are going to be the ones that are going to succeed in a new world.

HLM: What happens to those providers who don't adapt?

CW: Something like half of all doctors are over the age of 50. They're saying 'just give me 10 more years to do it the way I've always done it and then I'm done.' So you have a significant portion of the healthcare industry that is saying 'get me to the finish line so I don't have to learn anything new.' That is a big issue.

These younger docs want to do this stuff, but you have a changing of the guard from the old way with the old docs. And the final issue is money. We continue to pay for the old way. Until we change the flow of money we are not going to change the flow of the practice of medicine.