By Rick Kes, Partner, Health Care Senior Analyst with RSM US LLP
Consumer behavior is driving change in almost every industry. But are health care leaders paying attention? In many ways the answer is yes, but are the changes swift enough for growing needs? Let’s explore.
Technology has transformed our global economy over the past few years. For instance, a decade ago, if you had a check that you needed to deposit into your bank account, you had to physically bring it somewhere, whether it be a main bank, branch or a drive up; today you simply take a picture of it and the check deposits into your account from anywhere.
Health care has experienced technological transformation as well, and the COVID-19 pandemic has certainly accelerated it, particularly as seen with the rise of digital resources like telehealth. According to data compiled by RSM from Fair Health, telehealth claims spiked in April of 2020 to 13% of all claims, this compared to less than 1% during the pre-pandemic periods. Volumes have since leveled off at around 5%.
Source: Fair Health
The benefits of telehealth are significant, and consumers are recognizing this. From a patient perspective, telehealth can be much more convenient and economical. Consider a family who has two working parents and a 10-year-old with what they think is pink eye, or conjunctivitis. Instead of finding time in between work and other life demands to drive to the urgent care, one of the parents can see a provider from wherever they are and see if the suspected pink eye is really pink eye, and if it is, the provider can prescribe the appropriate medicine for drive-thru pickup at a nearby pharmacy.
In addition to the sheer convenience of telehealth, often the care and service is delivered at a lower cost to the patient. Cost has become critical for patients as many have insurance coverage with a high deductible health plan, thus making patients personally responsible for a large portion of their health care. According to Value Penguin by Lending Tree, 51% of employees who have coverage through their employer are covered by a high deductible health plan.
While telehealth benefits the patient, it also benefits employers who have self-insured health plans, as well as health insurers. Employers and health insurers alike appreciate the lower costs of telehealth as compared to in-person visits. Employers also appreciate the ability for their employees to see health care providers on an on-demand basis which allows the employee the opportunity to see a health care provider during a time that does not conflict with their work schedule. This all at a time when health care premiums continue to rise at alarming rates, as noted in RSM’s recent The Real Economy: Industry Outlook. The total premium increase from 2015 to 2020 was approximately 22%: much of that increase was absorbed by employers.
Telehealth also benefits health care providers. The service allows providers more flexibility in terms of location and scheduling. Providers can see patients from home and accommodate appointment scheduling, even potentially allowing providers to work on a gig basis. This is at a time when health care providers have experienced extreme levels of stress leading to burnout.
One of the reasons for a large spike in telehealth last year was because of Medicare’s change in accepting telehealth visits. Many health insurers made this change as well. It is unknown if these changes will remain in perpetuity, but many believe the genie is out of the bottle and it would be nearly impossible for Medicare or health insurers to roll back their expansion of coverage. For now, it’s quite clear to the consumer: telehealth is here to stay.
Expanded digital experience
In addition to telehealth, consumers have also pushed for other changes in health care that they’ve experienced in other services they interact with. For example, consumers are pushing health care providers to bring the digital transformation they have seen in entertainment and other sectors of the economy. In 2019, Mayo Clinic launched a platform for their patients including artificial intelligence, connected health care devices, data integration and more to better meet patient needs. One would expect that in the future there will be an Amazon or Netflix-like platform where a patient can log in, see a provider, see their current statistics on important drivers to their health, track physical activity and other wellness data, access their medical record, and pay their bill, all using online payment.
The need for transparency
Another significant area of health care that is being transformed by the consumer is price transparency. Health care has a notoriously complex and complicated economic model where prices for services are often difficult to provide. For example, there are very few, if any, other services where you have no idea how much a service will cost before you receive the service. Health care is different. For instance, the existence of a third-party payor is not one that exists in most other industries. It is in health care, and as a result, the patient often has little ability to know how much they will be required to pay for a service they receive. To address this challenge, in 2021, health care providers were required to provide transparency into their pricing and negotiated rates. The benefits of this dedicated price transparency will be that patients have the ability to price shop for services. However, it is unclear if patients will actually use this information to make health care decisions.
An ongoing journey
Consumer preferences continue to become more and more prevalent in health care. High deductible health plans are a big driver of that shift, as is the expectation that health care will transform just like other sectors of the economy. The industry has a long way to go, but it certainly appears that health care providers and technology companies are underway on the journey to get there.
The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.