- The majority of healthcare providers are failing to keep pace with consumer trends and remain uncompetitive with industry disruptors, according to Kaufman Hall's 2019 Consumerism in Healthcarereport.
- Executives are acutely aware of the problem: 88% of those surveyed report feeling vulnerable to non-hospital disruptors. Four in particular — Amazon, CVS and UnitedHealth Group and its innovation arm Optum — are considered to pose a "strong or extreme threat" to hospitals and health systems.
- Despite this, few legacy providers have made a concentrated effort to meet consumer demands. According to Kaufman Hall's consumerism ratings, only 8% are considered "best in class" and 24% are taking a "thoughtful approach" to consumerism. Most providers are either planning a consumerism strategy (39%) or lack one entirely (29%).
Healthcare executives and market analysts have been increasingly vocal in recent years about the need for institutional players to ramp up digital strategies, embrace consumerism and protect long-held revenue streams from market disruptors.
Despite the outspokeness of industry leaders on the issue, few have been able to push their organizations into concrete action. While more than half have developed consumer-centric missions and strategies, Kaufman Hall's survey found a majority have not yet built the infrastructure to support their objectives.
Meanwhile, hospitals margins are tightening in tandem with admissions trends, prestige tech giants are becoming formal competitors and vertically-integrated companies have homed in on segments of the market many health systems depend on to make up for revenue losses.
Survey respondents said UnitedHealth Group, Optum, CVS Health/Aetna and Amazon are "strong or extreme threats." All are looking to divert patients from hospital doors and into easily accessible and affordable retail clinics, and they're using digital care and engagement initiatives as touchpoints.
Despite expectations among consumers for similar digital points of access, Kaufman Hall's survey of hospital and health system executives found most providers remain entirely focused on brick-and-mortar. Legacy healthcare providers have not adjusted their delivery models to accommodate the demands of an "increasingly digital environment."
"These new entrants have superior data and analytics, along with expertise to develop digital care and engagement," the report said. "Hospitals and health systems must adapt to get a firm handhold on the rising bar of consumer expectations."
Kaufman Hall encouraged providers to expand virtual access initiatives and use digital tools to streamline care and improve patient engagement and satisfaction. The firm also suggested wide-scale adoption of real-time consumer experience products, which would allow providers to immediately address patient needs as they occur.
That's a big ask for most providers. Only 2% of survey respondents said their organization's digital experiences are comparable to Amazon's, and none claimed superiority.
Rather than compete with tech behemoths directly, many health systems have opted to partner with them instead. Some patients may prefer digital healthcare products that feel familiar. One-third of Kaufman Hall's consumer respondents said they would trust companies like Google, Apple and Amazon over healthcare providers and insurers when it comes to building online tools.
Health systems should refrain from trying to compete with new entrants and instead focus on adopting new delivery models based on partnerships. Keith Figlioli, general partner at healthcare venture firm LRVHealth, told Healthcare Dive he's anticipating a "massive proliferation of partnership announcements" over the next five to 10 years as providers jockey for position along large distribution chains.
Health systems should think about long-term viability beyond digital access points and telehealth. Figlioli said that will mean developing partnership models with new entrants on a local level in order to keep up with traditional competitors.