Claims Management News

Consumer Healthcare Spending Trends Show Uptick in Engagement

Consumer engagement is slowly rising with regard to healthcare spending trends.

By Vera Gruessner

Consumers today are becoming more and more responsible for covering the costs of healthcare services especially due to the greater proliferation of high-deductible health plans and out-of-pocket spending. What are the biggest healthcare spending trends among consumers? Are they able to save funds in order to pay for future medical bills?

Consumer Engagement

These are some of the questions that a survey from Alegeus called the  2016 Healthcare Consumerism Index attempted to uncover, according to a company press release. The report outlined consumer behaviors with regard to healthcare spending trends as well as consumers’ ability to save money for medical care.

The healthcare spending index found in the report has risen from last year’s 48.3 to a rate of 54.4, which shows that consumer engagement is slowly rising with regard to healthcare spending trends. However, there is still much more to be done in order to better engage consumers in their healthcare purchases since the results show there is more engagement among consumers when it comes to buying a television set or arranging travel plans.

The results also showed that consumers were more likely to save for retirement or their children’s college fund than for future medical expenses. This means that more may need to be accomplished in order to better engage consumers with their medical care and future spending responsibilities.

To learn more about the 2016 Healthcare Consumerism Index and how health payers can improve consumer engagement, HealthPayerIntelligence.com spoke with Steve Auerbach, Chief Executive Officer of Alegeus.

HealthPayerIntelligence.com: What are some of the most interesting findings released in the 2016 Consumer Healthcare Spending Index?

Steve Auerbach: “It really reconfirms for us the opportunity to better educate consumers on some of the tools that are available to help them deal with the reality of funding. First, healthcare is probably one of the least understood items. If you think about our spending index, consumers are more comfortable buying a television, buying a cell phone, or buying a car than they are at figuring out how to purchase healthcare.”

“While the numbers continue to increase year-over-year and the consumers are getting smarter and more savvy, there are still a ton of opportunity for us as an industry to better help consumers become savvy purchasers of healthcare.”

“When we think about the year-over-year trends when we started this in 2014, the index came in at about a 40 percent success ratio. Now, in 2015, it went to 48 percent and in 2016, it went up to 54 percent. We’re seeing good progress as consumers get more skilled at understanding how to procure and purchase healthcare.”

“One of the other findings that we got is that most employers actually view healthcare education as a one-time event during open enrollment but the consumer population is looking for support year-round. So healthcare is actually funded and procured throughout the year and we see the new industry leaders are actually creating the tools and the support ecosystem to help consumers at every step of the journey.”

“The other thing that popped out in the index is how little people understand how to save for healthcare. When you think about fluency for a consumer to prepare for things like retirement, retirement ranks at about a 41 percent on the index. College savings ranked at a 30 percent while healthcare savings ranked at only 21.9 percent. There are huge opportunities to continue to better educate and support consumers.”

HealthPayerIntelligence.com: Are consumers beginning to comparison shop for health plans and healthcare services? Why or why not?

Steve Auerbach: “We actually are starting to see an uptick in shopping for healthcare. There is a number of innovative tools that we’re seeing in the marketplace. The most exciting, from our perspective, is that consumers are starting to pay attention to their money.”

“Once the consumer transitions to ‘This is my responsibility and this is my money,’ we actually see them become much more engaged in both the saving and the shopping component. One of the things that the index pointed out is that consumers who are in a high-deductible health plan with an HFA are significantly more savvy at shopping for care. They pay more attention to where they’re going, what they’re purchasing, and, therefore, they end up with better value for their dollar.”

HealthPayerIntelligence.com: What steps can health payers take to further boost consumer engagement?

Steve Auerbach: “What we see more of the innovative healthcare companies doing is simplifying the experience. This means making it easy for the consumers to understand how to save better and how to spend more efficiently.”

“Most of the industry that we see is actually starting to integrate and simplify. One of our customers is doing a shared savings program. This means that if a consumer buys healthy food, they get rewards. If they exercise, they get rewards. If they utilize preferred, higher quality, and better value providers, they can actually get rewarded from that perspective as well.”

“The number one thing most plans are doing is trying to simplify the experience and give the right, integrated tools that guide the consumer on recommendations to save more money and spend more effectively.”

HealthPayerIntelligence.com: What findings in your report paint problems for consumer healthcare spending trends? Are there any solutions?

Steve Auerbach: “The biggest problem that the index found is that consumer liability continues to increase at a very fast pace. The percent of the population that is in a high-deductible health plan is increasing rapidly year-over-year. With that, once the consumers are in a $3,000 deductible, they really are paying for the bulk of their healthcare. The risk the index shows is that most consumers are underprepared to take on that role of purchasing.”

“It’s a rapidly increasing responsibility for consumers and they are struggling to figure out how to manage that responsibility. It’s very similar to the analogy of when people shifted from pensions to 401Ks. This is a similar transition for the consumer. Now they need to take ownership and accountability to prepare for their own healthcare costs.”

“We’re seeing medical insurance becoming very similar to auto insurance where it’s more of a catastrophic or unique situation. The consumer really needs to take a much more active role in figuring out how to save for both future retirement healthcare needs as well as current healthcare needs. There’s a number of great tools out there that can help them. This is our opportunity to educate better.”

 

Dig Deeper:

Why Payers Should Adhere to Patient Engagement, Consumer Choice

Why Payers Should Improve Cost Transparency for Consumers