In the more than 20 years that I have spent in the health care industry, first with leading managed care organizations and now in the disease management sector, I have witnessed two profound marketplace transformations.
In the mid-1980s, the group health insurance industry transformed into a provider-focused managed care industry. The shift was based on the premise that clinical oversight of providers was the solution to prevent overuse or unnecessary utilization and to foster the delivery of evidence-based medicine.
The advent of managed care produced noticeable improvements in terms of cost-trend migration and establishing quality measures. Nonetheless, costs associated with health care continue to increase and have become a key issue for U.S. businesses.
The inability of managed care to produce sustainable health care cost-containment has in turn brought about another sea change. The transformation that we're witnessing today unlike the earlier shift is based on the belief that costs are not solely provider-driven, but rather consumer-driven.
We are at the beginning of this transition. Early adopters are leading the way, but the jury is still out on the long-term viability of consumer-directed health care. This makes it all the more important that employers and health care industry leaders carefully consider the implications of consumerism across the health care continuum and barriers to success.
The promise of consumerism
I recall from my college days the classic definition of a perfectly competitive market: no market participant able to influence prices, many suppliers and buyers, no barriers to market-entry by new suppliers, and the lynchpin - perfect information. Unspoken in this definition was the assumption that the availability of perfect information translated into perfect knowledge in the mind of the consumer and, in turn, the motivation to act on this knowledge in 'perfect,' logical ways.
In the new health care consumerism, employers, health plans and other benefit plan sponsors have overwhelmingly supported the provision of information and choice for employees as consumers. Health Web sites, employer-sponsored health intranets, self-care books and the like abound, as do a complex assortment of benefit plan options designed to share increasingly more financial responsibility with employees through higher deductibles, co-payments, coinsurance and the like.
In this dizzying array of choices and overwhelming information, there lies a deeper, more fundamental question: Can the newly emerging employee-consumer translate this perfect information into perfect knowledge - and will they act on it in perfect, logical ways to make 'proper' health care decisions?
Said differently, is consumerism in health care a 'Field of Dreams' where, if you build it, they will come?
Fundamental truths
In 2004, I read a report that had a profound impact on the way I view my industry and my career. It was the Institute of Medicine's report on 'health literacy.'
Simply put, health literacy is the ability to comprehend and act on health information, both written and verbal. It's about how well an individual is able to understand their options, navigate the complex health care system, and make good decisions about their health.
I - and others in the health care industry - believe unquestioningly that low health literacy is the single largest, albeit least understood, barrier to improving health care in the United States today. Its implications for employers, employee productivity, and the financial future of business are extraordinary.
Consumerism in health care relies upon individual employees and their covered dependents making a variety of decisions leading up to, and oftentimes during, health care service delivery. From the initial task of selecting which benefit plan is best suited for them, to choosing a provider for any number of medical needs, to participating in wellness and incentive programs, to properly managing diagnosed conditions and responding appropriately to catastrophic events, the complexity of the current health care system is such that even the most well educated individuals with perfect information and perfect knowledge struggle to know what to do in every situation.
Which leads me to the understanding that in the health care services industry, there appear to be two universal truths:
* Health care is infinitely complex. The sheer number of providers, plan sponsors, program vendors, intermediaries and others that a consumer must navigate is daunting.
* Health care is intensely personal and emotional. Just imagine being told you have a life-threatening or activity-limiting health condition.
As executives in the health care industry, we must never lose sight of these fundamental truths, which are all the more significant in the context of the new health care consumerism where individuals will be expected to act in perfect, logical ways.
The confounding issue for employers is that they experience the unfavorable consequences of poor employee-consumer decisions. Avoidable heart attacks, asthma emergency room visits, diabetes complications, and the like, take a human toll on the employee-consumer. They also have an extra-
economic impact for employers through high medical claims costs, lost-productivity or, worse yet, premature death of experienced workers.
I fundamentally believe in the power of market competition, and remain optimistic that it is the long-term answer to cost control and quality improvement. But I also believe that health literacy stands clearly in the way of the ability of employee-consumers to make good choices about benefit plans, providers, and programs.
The mere provision of information will not solve the health literacy problem. The solution must also address the need for education and motivation. Information must be provided in compelling and creative ways that respect the health literacy skills of individuals as well as the personal nature of health care decisions.
The health care industry has only just begun to explore the issue of health literacy. The first step to delve deeper will be to develop quantitative assessment tools to measure the health literacy of individuals and populations. Such understanding will enable the creation of more effective and adaptive educational and motivational tools.
As we - plan sponsors and providers - seek to promote consumer-directed initiatives that require employee-consumers to take ownership of their health, we will run straight into a fundamental barrier to success. Namely, health literacy - or the lack thereof.
We must expand our knowledge of this important topic, develop assessment tools and program offerings that not only provide information, but enable the transformation of the information into knowledge and, in turn, the motivation from knowledge into action.
As we continue with this endeavor, we must recognize that health care is no longer a 'financial intermediary' industry, nor a 'clinical oversight' industry. Ours is an industry that must educate employee-consumers to be informed self-advocates and motivate them to work through emotional and personal barriers to achieve true empowerment for living healthy lives.
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