The consumer is wielding greater power, but hospitals aren't ready, CEOs say

Hospitals and health plans are increasingly investing in consumer-oriented services to remain competitive as patients and members shop more for their care.

Most healthcare executives currently focus at least part of their strategic plan on consumerism, and they expect that will only continue to grow in the years ahead, according to respondents to Modern Healthcare's most recent CEO Power Panel survey.

"Consumerism is evolving pretty substantially in the healthcare industry," said Warner Thomas, CEO of Jefferson, La.-based Ochsner Health System. "This is a change that is going to continue to accelerate, and organizations need to embrace it because it's going to happen whether you like it or not."

About 83% of survey respondents said at least 25% or more of their strategic plan currently includes a consumerism component. About 75% of CEOs in the survey say they expect more than 50% of their strategic plan to focus on consumerism within the next three to five years.

Hospitals and health plans have only recently begun to think of their patients and members as consumers. The healthcare industry is notoriously known for being behind other industries in its efforts to create an experience for customers that is convenient and easy to use, said Jean-Pierre Stephan, managing director at consulting firm Accenture who studies consumerism in healthcare.

For example, just 31% of CEOs said they had at least one person whose sole responsibility is to focus on consumerism efforts.

But the consumerism movement is continuing with or without hospitals, with the CVS Health-Aetna deal a prime example of how that can occur.

Providers and payers are now driven to create a positive experience for customers that will establish loyalty to their organization, as shopping for care becomes more important with the growth of high-deductible health plans, online reviews and greater general transparency in healthcare. Patients also increasingly expect consumer-driven services like online scheduling and smartphone apps to be available because other industries already provide such services.

"This is happening all around us," said David Entwistle, CEO of Stanford Health Care, based in Palo Alto, Calif. "Consumers have choices and they have great access to data online, which they are using to decide … where they get their healthcare."

The movement to a consumer-oriented healthcare organization has its challenges. Leaders must work hard to create a culture among employees that effectively promotes consumerism.

About 87% of the CEOs surveyed said they formally train their employees to be more consumer-oriented. Yet only about 24% of CEOs said they had a chief consumer officer.

Stephan said until organizations make it a priority to hire a chief consumer officer—or a similar position—"we won't really see a lot of advancement" in healthcare consumerism.

Peter Fine, CEO of Phoenix-based Banner Health, said his system doesn't have a chief consumer officer, but he's "taken the lead" on the not-for-profit's consumerism efforts. Banner has also recently added positions with consumer-focused responsibilities, including a chief marketing officer.

"All of these (roles) are an attempt to look at the organization with a different lens and find those opportunities in which our interaction with the consumer" could be better, Fine said.

Indeed, other CEOs said efforts to promote a more consumer-oriented business model isn't the responsibility of just one person but the entire organization. "It's a team effort," said Matt Aug, president of Cox Health Plans, a payer based in southwest Missouri with about 50,000 members. He said all employees think about consumerism, so they brainstorm about new products and solutions as a group.

At Keck Medicine of USC, an academic health system based in Los Angeles, retreats are held every year for all employees to talk about expectations from management and ways to improve customer service.

"Everyone on the team has to believe (consumerism) is an organizational priority," said Thomas Jackiewicz, CEO of Keck Medicine.

But in an already rapidly changing, high-stress environment, adding consumer-focused principles and ideals isn't always met with open arms by employees. Ochsner's Thomas said he's made it a priority to always tell his staff why changes are made. "Starting with the 'why' has helped us do a much better job communicating with our employees."

Although most CEOs are training employees to think about consumerism, there's no universal definition. Indeed, Fine at Banner Health said that consumerism "means too many different things to too many different people."

About 40% of CEOs on the Power Panel said they define consumerism as more attention to customer satisfaction and feedback. Roughly 19% said greater convenience is how they define it, while 14% said it means greater quality transparency, another 14% said design of facilities or using technology, and 5% said it's about greater price transparency.

For Dr. Susan Turney, CEO of the Marshfield (Wis.) Clinic Health System, consumerism is simply "doing right by our patients." It sounds easy enough, but Turney argues that it's a relatively new concept for healthcare organizations. "We need to really listen to our patients, and we need to really focus on meeting their needs, and at one time, we weren't."

At Keck Medicine, a consumer-oriented culture focuses on improving the patient experience. For example, the system routinely elicits real-time feedback from its physicians and patients in ambulatory-care settings to ensure patient experience is up to par.

Jackiewicz said he was inspired to provide tablet computers in the clinic to conduct surveys with patients and doctors after he repeatedly heard about bad care experiences too late. "There are so many visits (in the ambulatory-care setting)—it's our lifeblood. If we get ambulatory care right, everything else will work out well. But I worried if we aren't doing a good job, we might just never know, and our volumes could be impacted," he said.

If a patient or provider reports in the survey that their experience has been negative, managers in the clinic are immediately alerted so they can correct the situation quickly. For example, wait times might be unusually long because someone is unexpectedly out of the office.

The feedback from physicians also helps USC managers gauge if the clinician staff is overwhelmed and then find ways to help, Jackiewicz said.

To tackle consumerism at Minneapolis-based Allina Health, work over the past year has concentrated on better understanding the needs and wishes of the system's diverse patient population. In addition to patient experience surveys, Allina held focus groups with patients and applied outside research on consumerism.

"We are looking beyond patient satisfaction surveys … to what patients really hold precious and dear," said Dr. Penny Wheeler, Allina's CEO.

The system has also implemented a program called LifeCourse in which healthcare professionals make home visits with patients in the last years of life to help them make decisions and meet their end-of-life goals and wishes.

The program has been hugely popular among patients and their families, contributing to an improvement in patient-satisfaction scores, Wheeler said. Yet the services aren't reimbursed by payers.

"It is a wonderfully meaningful program, but the challenge that exists today is that we don't have a business model that supports it," Wheeler said. "As we are getting more into the consumer-centric viewpoint, the payment isn't catching up."

Even with slow adoption by payers for some patient-oriented services, they have a keen interest in improving patient experience.

Members of America's Health Insurance Plans recognize the importance of consumerism, CEO Marilyn Tavenner said. Payers are increasingly looking for ways for members to have a more personalized and integrated care experience. Health plans now commonly use care managers to help members as well as offer online tools to find in-network providers.

New York-based Oscar Health created a mobile app that allows users to search for doctors or health concerns as well as a free telemedicine service that is accessible directly from the app 24/7. "Over the last five years, Oscar has made significant strides in pursuit of a more consumerized healthcare experience, working to make healthcare simpler, easier to navigate and more seamless for our members," said Mario Schlosser, CEO and co-founder of Oscar Health.

Insurers are arguably the most influential players in how consumerism evolves in healthcare because they ultimately decide where their members can receive care, said Dr. Joanne Smith, CEO of Shirley Ryan AbilityLab in Chicago.

The future of consumerism in healthcare is likely going to rely heavily on the increase of technology-driven services. Most Power Panel CEOs—about 60%—said they expect to expand online services such as scheduling, bill pay and email or text consultations in the next three to five years.

Aug at Cox Health Plans expects his organization will invest more in technology in the years ahead. "Millennials are more comfortable with technology and we are able to reach more people in a more structured and standardized way."

The challenge is that investments in technology are usually expensive. "We have to get the most value for our dollar. We definitely weigh the positive and negatives of new products and the expected return on investment," Aug said.

But Jackiewicz at USC said the investments are worth it. "The fact that we are going to be consumer-focused—that is path for our success in this market."