Shopping Trends and Physicians

flying cadeuciiIt 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.

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18 replies »

  1. Agree with a lot here, but the answer to the cost problem is totally missed. At the very very core of it (and this is a little hard to swallow for some), the root problem is the average person can’t process cost information even when you give it. Here me out…

    Patients are handcuffed if we show them a “price”. Is that list price? Negotiated price? Wait, what’s a deductible again? Is this place in my network? You mean the doctor was in my network, but the hospital wasn’t? But didn’t I already pay? What do you mean that was a copay? And on and on and on. The data shows that the average person can’t calculate this. I hardly can and it’s all I’ve done for 3 years.

    The answer is for software to do all the math, instantly, to help your doctor better guide you. I’m a biased founder of a company who has built this, and if anyone wants to dialog around further, please reach out.

    • If the price is an estimate of the insured’s expected out-of-pocket cost based on the provisions and terms of his or her insurance policy, it should be a BINDING estimate, not a guess that could turn out to be thousands of dollars too low. I’m referring mainly to hospital based care here.

  2. Jim — As a former CEO of Rhode Island Blue Cross, when are insurers finally going to agree to disclose actual contract reimbursement rates so both patients and providers can identify the most cost-effective high quality providers in real time? Markets can’t work if we can’t ascertain accurate prices for services, tests and procedures before services are rendered.

    For the doctors out there, why do I keep reading stories about doctors threatening to sue patients who post a negative online review even if the review relates to issues like waiting time in the office, lead time to get an appointment or personal chemistry? If it has to do with the quality of actual care and the doctor thinks the information is inaccurate or wrong, he should be able to refute it in a similar way that we reply to each other’s comments here on THCB. For other commercial encounters, customers rely heavily on reviews posted online by others who have already purchased the product or service in question. Why should healthcare be any different?

    • Barry, good question re insurers. They are caught in a bad model. IF they disclose the rates, the differences become apparent to the other “similarly situated” providers. Example, in RI, if community hospital X knew that it was being reimbursed at 15% lower than some other community hospitals, next negotiating season it would negotiate up to the highest community hospital rate. It would have an inflationary effect. And yes, it typifies a very bizarre system.

      That being said, I think the time has come to disclose reimbursement rates. I do not think all reimbursement rates should be the same for, say, acute care community hospitals. I think payors need move onto a different system for settling on rates based on objective measures of quality and outcomes. NONETHELESS, the ability to hold the line on such would be difficult. And in a small state like RI, it is politically impossible to departicipate a community hospital. Or at least it was.

      Still, it’s time to move away for the monmaniacal focus on fees and move over onto use, quality and outcomes.

      • Jim – Thanks for your response. I agree about the idea of moving toward rate setting based on some objective measures of quality and risk-adjusted outcomes though such measurement is probably easier said than done. If a particular hospital has an excellent reputation for, say, cancer care, heart surgery or hip and knee replacement surgery, there is no reason why insurers can’t pay that hospital more for those care categories than it pays other hospitals in the region. Alternatively, lower payment rates than other hospitals get could be justified if the insurer must meet a minimum volume / revenue target with that hospital to merit the lower reimbursement rate as a percentage above Medicare than other hospitals get without the volume guarantee. I hope most reimbursement negotiations these days use Medicare rates as the starting point rather than chargemaster rates. I’ve read that at some hospitals, certain care categories like radiology and anesthesiology may have a chargemaster rate of as much as 20 times costs while other areas like OBGYN or behavioral health may be as low as two times costs. A uniform discount from chargemaster rates doesn’t seem to make much sense in this context. Does it?

    • “Why should healthcare be any different?”

      Barry, it isn’t different. Anyone can sue anyone even the proverbial ham sandwich.

  3. Maybe I am wrong, but as I read this as implying that the doctors were/are resistant to this (reference the title of the piece)…that they wanted to be “protected from commerce”…..whereas from my experience the problems have come from insurance administrators, health system administrators and CMS bureaucrats who have imposed layer and layer of rules and regulations. The only bright spot has been the emergence of Direct Primary Care….which really just gets back to the best traditions of medicine free from all the mischigas (pardon my Yiddish) imposed by the above mentioned non-physicians.

    But I do agree with the main thrust of the piece.

    • Paul, I believe insurers should get out of the business of “managing” care altogether, other than clearly medically unnecessary services. Insurers never did it well to begin with and it’s boloxed up the system with too many rules and too much red tape. So I agree with your observation.

      Published scores of individual providers based upon the measures of cost, quality, and outcomes would completely replace management of care and perhaps might free up the system somewhat. And it would fully engage all the lawyers representing providers who disagreed with the quality and outcome measure scores. But that’s one for another day.

  4. “ must be improving value for patients,” says Michael Porter ”

    He then goes on to define value based upon outcomes. Though I generally define value that way I don’t know that all people agree. I have treated people where the patient valued something else other than what I would normally call an outcome, and he was right for himself, not necessarily others. That tells us that what the experts think have most value might not really be true and we should leave the assessment of value to the patient. But, then, those that like to tell others what to do would feel offended and need a safe space.

    Jim you are right in your assessment that patient’s don’t want more of the same garbage they have been seeing in the Internists office. The Internists don’t want that either, but the government is pushing all these things and not letting physicians function in a real world. You are calling for physicians to adapt, but the only way for them to truly adapt to the changes around them is to overturn the system of today’s managed care and government interference. Without that they will continue to receive their checks from entities other than the patient and continue to serve those entities rather than the patient.

    • Allan, we are in violent agreement. Today’s sytem must be overturned. We need disruptive change. The concept of managed care has failed. We need to permit competitive forces to take over and the first step is published price, quality and outcomes measures.

      • Jim, I agree with those things you mention, but before they can be adequately accomplished we have to overturn the system of government control and micromanagement. Insurers need to insure the way they see fit and patients need to buy insurance policies they find most attractive or not buy them at all.

        I would love to publish quality, but that is tough, however, doable to a certain extent. For example, The Surgeons Scorecard https://projects.propublica.org/surgeons/ Consumers guide did it in the free marketplace for a lot of things so I guess the free market can provide that for healthcare. I would not be happy if government was more than periferally involved.

        Outcomes is a more difficult story in some fields because we frequently use death as a metric. I remember in training umpteen years ago. My hospital was excellent at CABG procedures with good outcomes. There was another hospital that had a better outcome rate and that rate led a lot of people to go there. That hospital selected patients refused by mine because the disease wasn’t great enough or in the right location to warrant the procedure. That hospital refused the difficult cases which were done at my hospital. Outcomes if not carefully explained could lead to patients being denied certain procedures because of the physician’s risk to his outcome score card.

        Price is a simple one as soon as the price is significant to the patient.

        • Said Michael Porter of HBS makes the point that outcome measures are actually simpler than it might be thought. Say for back surgery–days in hospital; complications; pain upon discharge and 30 days thereafter; range of motion (a little tricky); when back to work; if you had to do it over again, would you? Cardiac care apparently has some good ones.

          But measure something. Anything. Because nothing matters to consumers except for outcomes. They don’t much give a bleep about meeting quality measures in and of themselves. I think.

  5. Everytime you go anywhere as a patient–the doc, the lab, the x-ray, the hospital outpatient, the ER, the PT, the dentist, the new pharmacist, the orthopedist, the oral surgeon, blah blah–it is always a new literary experience where you must write down everything you can remember plus you have to search through your wallet for cards and more cards. This always takes 25 minutes for someone with no dementia. Thus interoperability is the opposite of what we have, although we have been working on interoperability since 2010. No matter how old the patient or how often he has seen his provider for the last 60 years, it is always a brand new fresh experience.

  6. As one of the noteworthy exceptions, this is exactly the kind of system I believe will work. Let market forces decide who is “excellent” or “not-so-good” for patients. Give patients a choice. Our office turnaround time is less than an hour (on the really bad days its no more than 2) and when you do get in the room, the patient MUST feel valued and cared for, otherwise a physician in private practice will be sunk. This is actually how our office has survived for so long.

    “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.”

    The only place I respectfully disagree is that digital medicine is NOT applicable across the board. If you are refilling a chronic medication and the condition is stable that might be alright, however a child with a high fever or an adolescent with depression are situations where face-to-face will always be necessary. We are not McDonald’s. We are not selling hamburgers. Meeting the needs of patients should be our main focus; but that cannot happen while trying to satisfy heavy government regulation.

    Jim, here is a little tip. If you see your physician once per year or maybe even twice, you would not have to fill out a huge amount of paperwork. If you know your physician well, then care IS convenient and cost-effective. I am with Margalit on the fact that all this pre-screening makes medicine seem like the TSA when traveling. It makes no sense.

    Finally, digital convenience comes in many forms. My patients take pictures of their child’s immunization record and growth charts at the visit. For our office, paper works for us. For many patients and parents pictures on their phone work for them. I fail to see the problem with each individual physician and patient choosing for themselves.

  7. So basically, healthy people won’t need to physically go and see a doctor, right? How is that different from how things used to be before we medicalized everything, before we decided that “pre-diabetes” is a thing, before we decided that screening for stuff, prevents stuff?
    I can see the 5% half of us spend on health care go digital (and cost a lot more in the end) while having no effect on overall expenditures, other than moving revenue from doctors to tech corporations.
    I cannot see the 95% the other half spends on sick care go virtual, mostly because sick care is not amenable to productization just yet (a tricorder and hypospray in every home will do the trick). I can however see how parts of sick care get dumped back on patients and families to extract free labor without lowering prices of services. Not sure I want to celebrate that…..

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