Healthcare consumerism is a movement to refine the efficiency and affordability of healthcare services by changing how people prioritize their healthcare. Imagine a system where patients are more knowledgeable and active in purchasing healthcare services. Healthcare consumerism works to make this a reality.
Healthcare Consumerism Basics
At its core, healthcare consumerism seeks to make patients fully involved in their healthcare. It does so by reshaping employer-sponsored benefits to put plan participants in charge of decision-making and economic purchasing ability.
Many common types of healthcare coverage plans don’t ask much of participants in terms of how they consume healthcare services. As a result of knowing their insurance will cover the bill, people pay less attention to cost. Unlike shopping for a home or car, they don’t equate shopping with healthcare and spend little time managing personal health information – preferring instead to “be cared for by an efficient and effective healthcare system that respects their preferences.”
Patients can become more careful and thoughtful consumers when equipped with better information, financial incentives, and decision-making tools. These can empower consumers to make better, more educated healthcare purchasing decisions. Ultimately, the main objective is to provide better healthcare and improve patient outcomes while lowering costs and increasing efficiency throughout the healthcare industry.
Impact of Consumer-Directed Healthcare
When managing their health, today’s consumers want to be more responsible. However, most people don’t feel well-equipped. In other industries, such as car buying, customers can easily access features, benefits, and cost comparisons to inform their purchasing decisions. By contrast, the healthcare industry needs more upfront pricing information and presents puzzling choices, contact points, and service flows.
With a higher responsibility for costs, consumers demand better, more transparent information from healthcare providers to make better decisions. They also want more partnership than the traditional one-way doctor-patient dialogs.
Paying for Consumer-Directed Healthcare
At the center of healthcare consumerism are tax-advantaged healthcare accounts such as Flexible Spending Accounts (FSAs), Health Reimbursement Arrangements (HRAs), and Health Savings Accounts (HSAs).
These employer-sponsored benefit accounts let employees set aside pre-tax funds to pay out-of-pocket healthcare expenses. While each of these accounts is unique in design, funding, ownership, and tax advantages, they provide spending power directly to participants. They all share a requirement to abide by IRS regulations on contributions, eligible expenses, and documentation to maintain non-taxable status.
Continuing Evolution
Healthcare consumerism will require professionals to alter how they market, deliver, and charge for their services. In particular, healthcare providers must focus on building their brands as they strive to operate in a highly competitive market.
As healthcare consumerism evolves, expect to see the following:
- Consumers will continue to see increased personal responsibility for premiums and out-of-pocket expenses
- Employers will help mitigate some of the costs through HSAs and other tax-advantaged plans
- Consumers will see more verified patient ratings and provider reviews from healthcare organizations and use them as a factor in their decisions
- Healthcare service delivery will become more marketing-driven.
As healthcare emphasizes value over volume, patient care and provider compensation will profoundly transform. In addition, as healthcare continues to refine itself, and with healthcare consumerism rising, there may be a more efficient, cost-effective system for all.
Beneliance has provided Arkansas employers with comprehensive third-party employee benefits administration and compliance services since 1996. Please enter your email (above right) to receive notifications about new blog articles as they are published.
