The consumerization of healthcare — a fundamental shift in the preferences, behaviors, and demands of patients — is threatening provider organizations’ revenue and disrupting traditional care pathways. Patients are transforming from passive recipients of healthcare services to active participants in their own health with heightened expectations of a strong digital experience, convenience, and quality offered by their providers:

  • US consumers demand a healthcare experience that mirrors the personalized customer service that's offered in retail. Fifty-nine percent of US consumers expect their healthcare customer experience to be similar to retail, per NTT DATA.
  • Patients are skipping traditional hospital departments in favor of services that offer speed and convenience. Between 2008 and 2015, visits to the emergency department for low-acuity conditions decreased by 36% — while retail clinic utilization jumped 214%, per a study published in JAMA.
  • The “Yelpification” of healthcare means patients are flocking to online review sites to express their opinions and inform decisions on where to seek care. Seventy percent of US consumers say online ratings sites have influenced their decision to select a physician.

Declining loyalty and the emergence of value-based care (VBC) jeopardizes revenue for provider organizations that fail to adapt to these newfound patient expectations. Eighty percent of patients report that they’d switch providers for “convenience factors” alone, per a 2018 NRC Health survey. Moreover, Medicare reimbursement is contingent on patient satisfaction — the Centers for Medicare and Medicaid Services (CMS) ties payments to patient satisfaction metrics and withholds reimbursement from health systems with low scores.

Dwindling profits and the emergence of alternative providers place even greater pressure on providers to react to the consumerization of healthcare. Nearly 20% of US hospitals are at risk of closure or are in weak financial shape, and hospital profitability bottomed out in 2017 at levels not seen since the financial crisis, according to Moody’s via CNBC. Compressing margins are partly due to the popularization of retail clinics like those in CVS, Target, and Walmart, which are poaching patients with their appeal to consumers' preferences for speed, convenience, and transparent pricing.

Healthcare providers that tailor their services to the new healthcare consumer in ways that emphasize convenience, choice, and transparency will be well positioned to see growth. Alternatively, businesses that don’t implement these [...]