Millennial Expectations Are Fundamentally Changing the Healthcare Landscape

By Kevin Fleming and Michael Evans

When it comes to healthcare, members of the millennial generation are turning the traditional delivery model on its head. Born between 1981 and 1996, this tech-savvy generation of 75 million is about to overtake baby boomers as America’s largest age demographic. Millennials have grown up in a technology-powered consumer environment where transparency, rapid delivery, and convenience are the norm. They’re now transferring these expectations to the healthcare industry, which has profound implications for healthcare providers and care outcomes. But, while millennials’ expectations of efficiency and service may be a positive catalyst for a slow-to-change industry, their cost-consciousness in regards to healthcare may have significant negative personal health consequences.

Millennial behavior also reflects general consumers’ growing tendency to avoid or delay care because of concerns about the growing cost of healthcare insurance and high patient deductibles. According to the results of a West Health survey published earlier this year, 44% of patients skipped necessary medical care because of costs. Other studies such as CarePayment 20-20 study reported by Becker’s Healthcare show care avoidance to be much higher—a staggering 64%. Potential outcomes of these converging trends are higher healthcare costs for all and poorer healthcare outcomes for millennials.

Millennials are abandoning the old office-based primary care model. Becker’s Healthcare highlighted a recent patient survey by the Kaiser Family Foundation that found “there was a pronounced difference among age groups: 45% of 18- to 29-year olds had no primary-care provider, compared with 28% of those 30 to 49, 18% of those 50-64, and 12% for people aged 65 and older.”

This shift is creating a dilemma for traditional health systems and hospitals: how to retain valuable patient relationships (and revenue) while maintaining the quality and continuity of care that differentiates their model from other, more consumer-friendly models such as urgent care and retail providers.

Today, some traditional healthcare providers are hiring additional physicians to speed care delivery in an attempt to bridge the gap between the traditionally opaque price and delivery model in practice at most health systems and hospitals and the patient. They’re also employing technology, with patient portals and other digital tools that enable people to communicate with their doctors and make appointments via their smartphones and other devices. Some are exploring doctor visits via videoconference. These efforts, while laudable, may not be comprehensive enough to meet the new reality.

This is a phenomenon that can’t be ignored because the competition for patients has never been more intense. According to a Washington Post story on the Kaiser survey results, “Many young adults are turning to a fast-growing constellation of alternatives: retail clinics carved out of drugstores or big box retail outlets; free-standing urgent care centers that tout evening and weekend hours; and online telemedicine sites that offer virtual visits without having to leave home. Unlike doctors’ offices, where charges are often opaque and disclosed only after services are rendered, many clinics and telemedicine sites post their prices.”

A recent example of coming potential alternatives to the traditional care model is the merger of health insurer Aetna with drugstore network CVS. One can imagine low-cost, drop-in healthcare clinics located in CVS drug stores, delivering affordable medical services versus the traditional doctor’s office or hospital.

In addition to CVS, the gap between patient expectations and the traditional primary care delivery model is attracting a wide variety of new participants. Earlier this year, Walgreen’s introduced a new digital marketplace featuring 17 leading healthcare providers. This is just one example of many where the formerly siloed world of healthcare is breaking down, allowing innovators to seize the enormous economic opportunity that exists for healthcare providers who meet consumer demand for great care, convenience, and a fair price that patients can live with.

Other, more noteworthy ventures like the nascent collaboration between Amazon, JP Morgan, and Berkshire Hathaway are adding fuel—and considerable anxiety—to the fire.

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How will traditional providers be impacted?

The traditional primary-care delivery model, however, offers patients something that can’t be achieved using this new fragmented approach to seeking care. This shift in consumer behavior has a downside, as the Washington Post notes: “A recent report in JAMA Internal Medicine found that nearly half of patients who sought treatment at an urgent care clinic for a cold, the flu, or a similar viral respiratory ailment left with an unnecessary and potentially harmful prescription for antibiotics, compared with 17% of those seen in a doctor’s office. Antibiotics are useless against viruses and may expose patients to severe side effects with just a single dose.”

In other words, care that’s delivered on a per-event basis by an array of unrelated providers can’t match the continuity of care that is achievable when a patient receives holistic care within the context of a longer-term physician relationship. This represents a clear and compelling differentiator for traditional providers seeking to attract and retain patients. The question is, will these providers make the necessary modifications to their business models to meet consumer demand for convenience and transparency while at the same time delivering superior care, characterized by a big-picture approach to wellness?

By embracing these principles and practices, traditional providers will not only attract and retain patients who are seeking care; they’ll have the opportunity to seize a sizeable share of the population that is avoiding care today. If they invest in the technology and processes to deliver financial engagement that includes pricing transparency, payment plans, easy-to-use self-service functionality, and personalized experiences, providers can and will capture many of the patients who see cost as an obstacle to care.

Adapting to the new reality requires a strategic approach centered around patients, whose loyalty now constitutes a provider’s most valuable asset. By tackling the challenge methodically, health systems and hospitals can leverage their competitive advantage and meet patients where they want to be. This method includes healthcare delivery models that are:

Patient-centered. Younger patients’ expectations of their care providers were formed in a consumer environment exemplified by companies like Amazon, Apple, and Nordstrom. That’s where millennials’ demand for transparency, service, and convenience were nurtured. Providers must look outside the industry to see who’s winning consumer trust (and dollars) and how.
Financially efficient. It pays as much attention to the financial experience as it does the clinical experience. Depending on the research you trust, somewhere between 44% and 64% of Americans are avoiding care because of concerns about their ability to afford out-of-pocket cost.
Personal. It may seem ironic, but mass retailers use customer demographic, behavior, and sentiment data to deliver personal, almost intimate experiences that mimic the best kinds of human interactions. Hospitals can do the same thing, leveraging data to inform everything from treatment to payment plans to communication strategies that honor each patient’s unique circumstances.
Smart. It’s essential that hospital caregivers and leaders learn how to leverage technology solutions to gain visibility into the patient experience.

These are uncertain times for healthcare providers. Growing numbers of patients are seeking care in nontraditional settings, abandoning the primary physician model. New competitors with innovative, low-cost delivery models are proliferating. And patients’ financial burden for care is, as long promised, driving whether and where people get their care.

But, by leveraging technology to put patients back at the center of their care delivery model and improve operating efficiencies, providers can thrive. By leveraging superior, holistic care and innovating to embrace emerging technologies to deliver greater convenience and transparency, health systems and hospitals will earn the patient loyalty to ensure their long- term growth.

About the authors

Kevin Fleming is the CEO of Loyale Healthcare. Michael Evans is the Managing Director of the Newport Board Group.

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