Healthcare Consumerism: Moving toward cost transparency and patient engagement

Healthcare in Utah
The innovations, trends and challenges shaping Utah’s healthcare industry

Last fall, Utah Business hosted the first annual Utah Employers Healthcare Summit. The event brought together healthcare providers, carriers, employers and institutions to discuss the seismic changes that are reshaping healthcare as we know it. The summit featured multiple sessions and compelling keynote addresses. Here, we bring you some of the highlights from the day-long event.

In the world of business and retail, consumers search, select and purchase products and services that meet their needs. Could it be that simple with healthcare? There’s a movement afoot that advocates transparency in healthcare costs and greater involvement by patients in their own healthcare decisions. It’s called “healthcare consumerism” and it is slowly changing the old paradigm of “doctor said/patient does” to a new culture of consumer choice.

Healthcare consumerism describes healthcare empowerment and the transfer of knowledge so that patients are more educated in the use of their healthcare dollars, more active in the decision-making process and more focused on the outcomes received for their expenditures.

“This is about patient engagement at multiple levels,” says Donna L. Milavetz, M.D., founder and CEO of OnSite Care. “It’s about healthcare consumers becoming empowered.”

As healthcare costs soar and the financial burden is increasingly shifted to individuals and families, consumerism will encourage competition in the marketplace and encourage more informed choices regarding the selection of health plans and health services, Milavetz says, adding, “the healthcare we get for the high price point is not all that good.”

Knowing what you’re paying for

For true consumerism, healthcare costs need to be transparent. Matthew K. Eastman, D.O., a family physician at the Merit Care Clinic, notes that every day patients and providers struggle to figure out the costs of services. “The core of the healthcare delivery system is the interaction between patients and providers, but the consumer of the service is not the payer of the services,” he says.

Healthcare consumerism is intended to drive the healthcare industry toward novel cost sharing approaches with the goal to make healthcare less complicated while improving outcomes. Nonetheless, the process of change can be slow. For example, the industry-wide transition to high-deductible health plans has had mixed results. Such plans are intended to give consumers “skin in the game” with a financial incentive to make wise healthcare choices. But Susan Johnson, CEO of Futura Industries, says that approach caused employees to be reluctant about seeking care they needed.

Stan Rogers, vice president of marketing for Aetna, says there are myriad ways employees can get involved in consumerism. But the issue is complex because it involves the way benefit plans are set up, the networks involved and the options available. “To get all of the way to consumerism is a work in progress,” he says.

Rogers says the insurance industry recognizes the drive toward transparency. However, the challenge in the marketplace is being able to make comparisons when you don’t know the actual costs, for example, of physician services or of a procedure. “How often do you go buy something when you don’t know how much it will cost?” he asks. “We do that in healthcare all of the time.”

Eastman compares the current healthcare environment to going to a restaurant and buying meal, or to a car dealer and buying a car, without having any idea of the cost. “That is the situation patients and providers encounter every single day,” he says. When asked by patients about the costs of services, he could offer ballpark estimates, but they were not based on any real or accurate information. So at that core interaction between the patient and the provider, Eastman says, when cost information isn’t available the system is fundamentally broken.

The problem is exacerbated by the fact that the consumer of healthcare services is not typically the payer for the healthcare services. So in some situations, patients consume services without caring for the cost. And because patients and providers generally have no concept of the costs involved, they tend to think other aspects of medical care are more reflective of value. For example, the use of newer technology, Eastman says.

He believes cost should be part of every medical decision because there are frequently different options available and typically more than just one right thing that can be done. Further, he says there must be more engagement between all of the players: patients, employers, providers and payers.