The healthcare market is changing. Decisions about care and spending are becoming increasingly consumer-driven, and new competitors are entering the marketplace to meet growing demand for cost-effective, convenient care. Hospitals need to adapt to this shift to retain patients and revenue streams.
Retailers Are Targeting Healthcare’s Achilles’ Heel: Customer Service
Some of the most powerful new players in healthcare are also some of the most surprising. Who could have foreseen that companies like CVS, Walmart, and Amazon would eventually become major players in healthcare? The CVS-Aetna merger is one of the clearest examples of the trend toward retail-style, consumer-focused healthcare. For hospitals and other incumbent providers, this merger is also one of the most threatening developments.
When you take a major retailers’ deep understanding of consumer buying habits and combine it with an insurers’ extensive patient data and healthcare pricing expertise, you have the makings of a monstrous new competitor. New players in this mold are also highly motivated and ready to execute: you have the insurer’s desire to move patients into lower-cost settings and an existing national network of retail facilities—some of which already contain functioning healthcare clinics.
Incumbent providers are facing an uphill battle to prevent patients from moving to retail-style facilities. In the consumer’s mind, there is already a stark difference between their experience with hospitals and their experience with CVS or Walgreens. On the one hand, imagine walking into a CVS/Pharmacy and strolling out a few minutes later with your prescription or a flu shot. On the other hand, think about looking for parking in a big hospital garage, walking across a large campus to find the right office or department, spending time in multiple waiting rooms, and leaving with a big stack of paperwork that you don’t quite understand.
The comparison isn’t flattering to the incumbent providers, and the fact that retailers are starting with a relatively “clean slate” gives them yet another advantage as they push deeper into healthcare.
It Gets Worse: New Players Are Targeting Your Revenue Streams
In recent years, we’ve seen hospitals adapt to a more competitive marketplace by focusing on expanding their most profitable lines of business, such as urgent care, ambulatory surgical centers, radiology, lab work, and other outpatient services. Not surprisingly, the new players are targeting exactly the same services, setting up a fierce competition for these critical revenue streams.
These conditions could very well create a perfect storm that disrupts the marketplace and accelerates permanent changes in consumer expectations regarding the delivery of care. Many patients have already been picking up their prescriptions at CVS for years. Visits to retail-style urgent care and lab facilities have also become increasingly common. With a little push, many patients could easily start making these types of providers their go-to choice for the majority of their day-to-day care.
How Can Incumbent Healthcare Providers Adapt?
One of retailers’ greatest advantages is that their businesses are dedicated to delivering a positive consumer experience. Historically, this truly has been the “Achilles’ Heel” of the healthcare industry. To remain competitive in the new marketplace, hospitals and other incumbents will need to deepen their understanding of consumer behavior and reorient the patient experience to be simpler and more convenient—especially in pricing and payment.
A lack of transparency and the uncertainty around individual financial responsibility put stress on patients at times when they are already facing very difficult situations. To have a positive experience with their provider, patients need to know upfront how much their care is going to cost and how much they’ll personally be responsible for, and they need payment options that are easy to understand and use.
Loyale encourages and enables healthcare providers to deliver personalized financial engagement to each patient. Our platform ensures a seamless experience for the patient, with consolidated statements, personalized financial planning and communications, and multiple easy ways to make payment, including financing options.
With Loyale, patients get transparency and the ability to manage their healthcare costs more like the way they manage other household bills. Providers get the tools they need to increase collections from patients and, equally importantly, improve patients’ financial experience to foster strong relationships and long-term loyalty.
Consumers will continue to drive a greater share of decisions about care and payment. Providers who meet patients’ expectations will be able to position themselves for success in the new marketplace. Hospitals and health networks that don’t make these consumer-friendly adaptations will lose patients and revenue, and ultimately find it hard to survive.