Back

Shopping for healthcare: opportunity or obstacle?

By:

Jan 25, 2017

Giving patients the ability to shop for the best prices among healthcare services has become one of the pillars of the Trump administration’s plan to overhaul the United States healthcare system. As stated in step 5 of his 7 points for health reform:

Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.

The plan rests on the belief that healthcare expenditures can be lowered, in part, by the efforts and savvy of price-conscious patients. Calls for being able to shop for the best healthcare prices are commonly accompanied by goals for price transparency. The Trump agenda is no exception, but how this will be done is still a matter of debate. Though this may seem reasonable at first glance, we must consider whether shopping for the best price is an experience patients want in their healthcare. Or, does it become just another imposing obstacle in the way of the patient receiving the care they need and achieving the health progress they seek?

When viewing this question from the frame of Jobs Theory, products and services succeed not only because of the functionality they offer, but because of the experiences they enable (or in some cases exclude) for consumers. Products and services that are effective in solving customer jobs help them overcome the obstacles that get in the way of achieving the progress they seek. A good example of a company taking into account the experience of the consumer is IKEA.

Typically, furnishing a room is dependent upon factors such as owning or arranging a large vehicle to haul furniture to your home, selecting the appropriate tools for installation, hiring movers, or convincing your friends to help you squeeze furniture through your entryway. IKEA helps the customer with these struggles as all necessary tools are included in the packaging, and furniture are sold in boxes that are less awkward to move while compact enough to transport in a small vehicle. The showrooms built into the store can even give inspiration to those customers still struggling with the future design and layout of their space. In these ways, IKEA makes the experience an easy and obvious one-stop purchase. By clearly understanding the particular struggles and circumstances of the customer and the progress he or she is trying to make, IKEA is able to add experiences that aid the shopper with the ultimate job of furnishing their room, and help customers overcome experiences that typically impede progress.

When healthcare companies consider the continuum of care for patients, they too must take inventory of the experiences that currently impede patient success and consider how their product or services can integrate features that help patients navigate around these roadblocks.

Does attempting to research the costs and marginal benefits of one imaging provider over another leave the patient in a better position to fully comply with their course of treatment and ultimately improve their health status? Or do these efforts pose an additional obstacle standing between the patient, their full course of treatment, and a good healthcare outcome? Analogously, do IKEA’s customers want to stress about which set of tools are best to buy before purchasing and assembling their furniture? They, surely, would answer in the negative, and results of a recent study suggest the same is true within healthcare. While investigating whether offering a price transparency tool to patients would impact healthcare expenditures, researchers found that of the individuals offered a price comparison tool, only 10% made any use of it in the first year. This low adoption rate may indicate that shopping for the best price of healthcare services along the care continuum would become an additional obstacle in the way of patients achieving the health progress they seek.

So how can the new administration change its stance and account for these obstacles? Instead of focusing on price transparency for individual services, President Trump and lawmakers should encourage initiatives that aggregate as many services and patient experiences related to treatment into one payment. By purchasing the whole continuum of care for a procedure on behalf of the patient, providers, instead of patients, are compelled to coordinate care effectively, remove obstacles and potential complexities, and ensure the patient receives the full bundle of treatment purchased.  An instructive example of this is the Bundled Payment for Care Improvement initiative run by the Centers for Medicare & Medicaid Services.

Additional progress could be made by taking efforts a step further and pioneering analogous initiatives with the opportunity for payment via full-risk capitation. In this model, the patient’s premium payment covers all healthcare services over the span of the year, virtually removing the obstacle of price shopping outside of the premium itself. In this model, the provider accepting the payment is ultimately accountable for effectively coordinating all care for the patient, and is at risk to lose money when care is poorly coordinated. The patient experience can then be focused on complying with a chosen care regimen and tasks directly related to the central goal of improving health.

I encourage lawmakers to turn their focus away from their goals of price transparency on the level of each service, and instead continue their investments in initiatives that purchase healthcare in a more holistic manner, so that providers are compelled to consider the patient experience over a wider continuum of care and coordinate the delivery of services bundled within. In this way, unnecessary burden is lifted off the backs of patients, and providers can focus on helping patients in new and innovative ways to overcome common obstacles that stand in the way of the health progress they seek.

Ryan Marling

As a Research Associate at the Christensen Institute, Ryan works on Jobs-to-Be-Done case research as it pertains to healthcare. He’s also currently co-chair of the HealthIMPACT committee within Boston Young Healthcare Professionals.