It has happened. For the first time, consumers are purchasing more on line than in stores. Even Black Friday 2016 with its emphasis on traditional shopping saw more people buying on line than in stores (44% compared to 40%). Mobile phone sales on Cyber Monday, at $1.07 Billion, were up 34% over last year, and Cyber Monday sales exceeded Black Friday’s sales according to Adobe Digital. Personally, I would rather chew off my right pinkie than venture to a mall on Black Friday, but I did shop online taking me two minutes, without moving from my desk.
The traditional consumer shopping world is changing at light speed, and this dramatic sea change is turning shopping malls inside out, literally and figuratively. In the process, Amazon has eaten the collective lunches of Macy’s, Penny’s, Kohl’s, and even Wal-Mart.
By way of example, Amazon offers a purchasing experience that makes use by smart phone an obvious choice for Millennials who must be served if businesses are to survive the next two decades. On line price shopping is quick and incredibly convenient; price comparisons are easy; customer service is superb; and such things as Amazon Prime are eliminating shipping costs and speeding delivery. Returns are easy, requiring only some scotch tape and a stop at a UPS drop box. What’s not to like in this age of little spare time?
Consequently, brick and mortar stores are in serious jeopardy and are like deer in headlights, reminiscent of companies such as Blockbuster, Kodak, and Xerox, which fell prey to disruptive technologies, products, and trends. Only time will tell if traditional stores will survive, but the smart money is not investing in malls these days.
As an article in the Digital Insurer noted: “Companies today have two choices: evolve with technology or go extinct.”
THCB readers of this blog, steeped as they are in today’s reality of healthcare, are at this point likely wondering, “So what?” This blog is about healthcare—not Black Friday or Cyber Monday. For years we have tried to keep commerce away from medicine with the misguided thought that we were protecting the autonomy of physicians. What we really did, unintentionally of course, was to create a system that today rewards waste and failure, and makes it incredibly difficult for diligent physicians to deliver top flight care. Normal healthy competition is absent in healthcare.
As a result, the healthcare industry has withstood consumerism with remarkable resilience over the years. Despite demands for transparency, the industry still holds secret such consumer-needed information as price and quality making it nearly impossible to shop intelligently for healthcare. But consumer demand will recast the basis for success in healthcare from reputation and referrals to price, quality, and outcomes (value).
How will “value” be defined in the future? “The overarching goal for providers, as well as for every other stakeholder, must be improving value for patients,” says Michael Porter of the Harvard Business School. “Value is defined as the health outcomes achieved that matter to patients relative to the cost of achieving those outcomes.” The Strategy That Will Fix Health Care, Porter & Lee, Harvard Business Review October 2013.
And what about convenience, which certainly is a value that increasingly matters to consumers of healthcare? Yes, I refer to them as “consumers.” My article entitled “Stop Calling Them Patients” evoked some indignation as did a subsequent article which was critical of the CEO of the American Medical Association for using the term “digital snake oil” when referring to consumer-friendly healthcare apps and technology. While some apps indeed are not helpful, what was more troubling was paternalistic attitude regarding the need for physician control over all things healthcare. Today, consumers demand control over their own lives via technology. That is the way of it, and it will only intensify.
While there are noteworthy exceptions, most office visits are the epitome of patient inconvenience and anything but patient-centered. Office visits often take 4 hours out of a busy working mother’s day. What do they experience in exchange (after a lengthy search for parking)? Too often, a long wait beyond the scheduled appointment times in reception rooms with outdated WebMD magazines and all the charm of an Army office. And this after filling out, yes by longhand on a clipboard one more time, personal history information. Then what? Weight, blood pressure, and some questions by a nurse assistant, another wait, and then 5-10 minutes with an MD who is rushed beyond belief, spending the first half of the visit just being filled in by the nurse assistant. Suddenly, you’re out the door having wondered what just happened and having forgotten to ask questions you needed to ask.
Is it realistic to think that in ten years, office visits will remain the consumer unfriendly in-person experiences that they are today? Just as retail shopping has gone digital, office visits will and must change dramatically to satisfy consumer demand for speed, convenience, cost, and quality demands
On the physician side, response to consumer need actually has deteriorated. Demand has already outpaced the capacity of most primary care physicians. The response has been to add more and more physician “extenders” the most obvious of which are licensed nurse practitioners. We often don’t even see physicians at our more routine office visits.
And in the behavioral health field, we have seen how psychiatrists have completely evolved from traditional therapists to drug prescribers at a 15 minutes per patient clip. We visit psychiatrists primarily to make sure our combinations of drugs are not harmful, something that in most cases can be done by an app.
The future will not permit healthcare to avoid retail competition. Healthcare will follow the many other industries that have gone digital and more consumer-friendly. It’s just a matter of time. But like malls, healthcare systems seem bound up in bricks and mortar and remarkable campuses that seem to be like small cities. Some measure their identity in the magnificence of their physical plants rather than the convenience of the service they provide. The expectation is that if they build it, patients will come physically. The future will be very different, and provider systems must start anticipating this.
To win in this future, healthcare providers will have to offer more of what consumers demand such as demonstrably (provable) higher quality; reasonable (and published) prices reflecting the quality; personalized and convenient services; and more digital rather than face-to-face transactions. We don’t want to keep filling out personal health histories longhand. We don’t want to invest 4 hours for a 15 minute visit. There are apps and digital equipment that can collect the vitals such as weight, blood pressure, glucose testing results. There is Skype or its successor that will enable face to face highly convenient sessions. IF there is a need for further evaluation, in-person visits can follow; but in this way, we reduce the office traffic to those who really need to be there, and we maximize physician focus on patients who truly need their skills. If I’m relatively healthy and monitoring myself, I won’t want to see a physician more than once a year.
I am an enormous (in degree, not size) admirer of physicians and their evaluative skills, particularly evident when they have the time and resources to fully use them. For our chronically ill and those at risk of becoming so, there will always be a great need for face-to-face interaction, evaluation, and follow up. Yes, reimbursement modalities inhibit this to a major degree, but that must change.
In summary, I am concerned that many of today’s healthcare providers will be left behind if they do not start to adapt to what will be, all too suddenly for them, an enormous wave of digital and convenience demand.
Yet, this is not all bad by any means. As Tom Main and Adrian Slywotzky put it so well in The Patient-To-Consumer Revolution:
“The new healthcare world we are entering is not about limiting access or offering price-discounted care. It is about putting together the pieces in a way that lets healthcare professionals actually accomplish their most important goal: keeping people well and giving them more years of productive, good life.”
Yes, and with a focus on “value,” that which matters to the consumers of their care.