The Era Of Passive Healthcare Needs To End - Now

To say the U.S. healthcare system is broken is both the most overused and understated declaration of the decade. And yet, amidst all this sound and fury, some serious issues have fallen through the cracks. The most overlooked issue: the healthcare system’s dysfunction has encouraged consumers to avoid it altogether. To better understand why, let’s look at some of the factors driving this behavior:

• Healthcare costs continue to rise – the Centers for Medicare & Medicaid Services projects a 5.8% annual growth rate between now and 2025.
• As a result, we’re seeing high deductible health plans become more common in the workplace. Over ⅓ of Americans are insured through their employer’s high deductible health plan have to shoulder the additional costs of care.
• All these changes, coupled with the lack of transparency around price and quality, have led some people to actively forgo care or submit to paying for medical bills without questioning or understanding what they’re being charged for.

I find this startling given that in every other major category of consumer spending, there are endless tools to either guide or incentivize people to make smart, cost-saving decisions. Google Flights recommends you take a flight three days earlier to save $100. Yelp gives an overview of the cost and quality of the restaurant you’re about to visit. Zillow lets you comparison shop for real estate from anywhere. Yet, in an area as crucial as healthcare, we stand idly by and watch people struggle to navigate the system. That’s why I firmly believe that we, as providers, policy makers, employers and entrepreneurs, need to put an end to this era of passive healthcare together. Over the next few months, I’ll address various aspects of this proclamation. Today’s post will set out to answer the question of “why now?”

Reason #1: More than ever, consumers are signaling a desire for more

There’s an ongoing debate as to whether or not consumers want hands-on guidance in healthcare. To me, it’s not even a question. If these blind healthcare decisions are impacting people’s wallets and well being, it’s illogical to think they wouldn’t want more clarity. If you need convincing, a report from Public Agenda from earlier this year found that 50% of Americans have tried to find price information before getting care, with that number rising to 69% for Americans who had deductibles above $3,000. Or, for more anecdotal evidence, listen to the first episode of Sarah Kliff’s podcast, The Impact, where she talks to someone who got charged a $629 bill for a 5-minute visit to the doctor and a band-aid. Insane. These are all signals that consumers are acutely aware of costs and want the information to smartly navigate them.

There’s also a dangerous argument from the naysayers that the industry is too complicated to crack. If we take a passive role out of fear that healthcare is too big or hard of a problem to solve, it will only continue to grow until it reaches a point where the effects are irreversible. There are studies that have shown low engagement with comparison shopping products and transparency tools in the past. And the majority of respondents in a Health Affairs study said they didn’t know of a resource that would allow them to compare costs among providers. However, this isn’t the fault of the consumer nor does it indicate an apathetic attitude toward shopping for healthcare. Rather, it’s because we’re still figuring out the best way to present solutions to consumers. As the CEO of a healthcare transparency company, I can attest to the fact that we’re constantly experimenting and learning to see how we can best meet consumers where they are, with the right product. This type of change doesn’t happen overnight. Just because we don’t have the perfect solution in front of us today, it doesn’t mean one is out of reach – or that people don’t deserve one.

Reason #2: Healthcare is already 15 years behind

Last year, Tina Rosenberg wrote a terrific opinion piece for The New York Times about shopping for healthcare, in which she said:

“There is practically nothing that we shop for the same way we did 15 years ago. We compare prices online, look at quality ratings and reviews, and read about the experiences of others. We have endless information. Except in health care. Most of us still buy it blind. We do as our doctor directs – and pray that our portion of the bill will be reasonable.”

This paragraph perfectly embodies the problem at hand. Some say that healthcare can’t be compared to other consumer industries. While it’s certainly a unique, complex beast of an industry, we must also consider the fact that healthcare has been – and continues to be – one of the top consumer spending categories in the U.S. The average household spent over $4,600 on healthcare in 2016, as reported by the Bureau of Labor Statistics, and the industry is the source of $3.2 trillion in spending in the U.S. each year. So my question is: at what point will this spending threshold be enough to warrant the level of guidance and resources that other consumer industries receive?  We’re already far behind where we should be, and it doesn’t make sense to wait any longer to instill change.  

Reason #3: Millennials and employers are ripe for the picking

There are crucial changes happening in the healthcare landscape: first, millennials – now the largest generation in the U.S. workforce – are graduating from their parents’ insurance plans and interacting with the healthcare system on their own. Second, there are people already in the workforce encountering benefits like high deductible health plans and health savings accounts for the first time. This is a pivotal opportunity to intervene early and steer these groups away from developing bad habits, such as skipping care or neglecting to research cost and quality before choosing a provider. While we alarmingly already see millennials making poor decisions, I’m still confident we can still change people’s attitudes if we can engage soon.

What gives me this confidence is observing case studies from other industries like home ownership. Millennials used to have a notorious reputation for only renting. However, recent studies show that they’re actually starting to warm up to the idea of buying a house and are taking actions, such as saving for down payments, to match their new priorities. Healthcare may be slower to change minds, but it’s absolutely possible with the right influence.

Our healthcare situation is no longer an abstract problem, but one that affects real lives on a daily basis and warrants a strong sense of urgency. It’s going to take a tremendous amount of effort by the right entities to end this era of passive healthcare, but I firmly believe it’s our duty to arm everyone with the knowledge, tools and resources they need to navigate the healthcare system – not avoid it. In my next post, I’ll dive deep into the players responsible for taking the initiative to do so. Stay tuned.