Consumer-driven health care is the future

Stakeholders will have to reinvent themselves to ensure that the best quality medical care is provided to patients

Vijay Ramnath Jayaraman
Published: 05, Nov 2014

Vijay Ramnath Jayaraman is a healthcare management consultant. He helps hospital leaders across U.S. and India in dealing with financial challenges. He is a Global Shaper, a group of leaders under the age of 30 charged with catalyzing positive social change in their respective communities by World Economic Forum (WEF). He was recently chosen as a 2014 Carnegie New Leader by the Carnegie Council, New York. He is also a founding member of an Institute of Healthcare Improvement (IHI) chapter. He has degrees from Georgia Institute of Technology and Anna University. At Forbes, Vijay focuses in the areas of politics, economics, and the business of healthcare in India and U.S. The views expressed on this site are his own and do not reflect those of his employer or clients. Please feel free to contact him directly @vijayramnath

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“Health care Consumerism” otherwise known as “Consumer-Driven Health care” is aimed at restructuring care around consumers and patients. Typically, in India’s current system, the government and employers take a “paternalistic” role via their health coverage and government-based hospitals shoulder the responsibility of providing health care, negotiating rates with pharmaceuticals, and arriving at a market rate for doctors and services. However, in a consumer-driven economy, consumers take centre-stage, dictating the modes and methods of care delivery, giving rise to a consumer-focussed marketplace.

There are a number of trends stemming from this important shift towards a focus on consumers. All health care stakeholders, including hospitals, insurance companies, pharmaceuticals, and clinics that ride these changes, may be in a better position to stay financially sustainable where patient satisfaction can make or break chances of success.

Here are some things that will help you understand health consumerism better.

1. Consumers are biggest winners of the trend: Consumers will benefit with lower costs and better quality of service in hospitals and clinics. With the advent of technologies that can track health statuses real-time, patients can proactively manage their health and become more involved in their treatment processes. In India, such a system will be a huge shift from our current doctor-driven care and result in patients making health care decisions along with their care providers. Digital health trackers and health apps are great examples of what a consumer-driven health economy will look like.

2. Hospitals, doctors and clinics need to up their game: Hospitals, clinics, and doctors will need to prepare and face a market which is driven by customer satisfaction. In our current incentive structure, these providers get paid for the number of services they provide such as number of patient visits, number of surgeries, etc. However, in a consumer-driven marketplace, they will be paid for reducing hospital stays, improving safety and quality, and providing tools for consumers to manage their own health.

3. Health insurers need to reinvent themselves: While health insurance marketplace is naive in India, it is still one of the fastest growing segments of business. Health insurers will have to carefully reinvent themselves by appealing to consumers who are increasingly involved in the health care landscape. In the US, insurance companies provide tools and technologies that help with real-time diagnosis via Google and Apple Apps, provide cost transparency so that consumers are not shocked to see their final bills, and pay for wellness programmes which have shown to reduce cost over the long run. These are some of the trends expected in the near future.

It is important to point out that while India still needs to tackle its basic access to care issues, consumerism is inevitable. Several white papers have already pointed to a future state of health care where patients and consumers will engage with health providers and insurance companies in the same way as they are engaged in buying a product from Flipkart or Amazon. I firmly believe that such an economy will improve health care access by reducing the cost of care while improving our quality.

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