Boost benefits value with these four direct-to-consumer brand tactics 

Direct-to-consumer (D2C) healthcare solutions are spreading like wildfire. This category encompasses a range of products and services that traditionally were only available through a health system or benefits program but can now be purchased directly by consumers – largely without any interaction with their employer, insurance carrier, or primary care physician. D2C healthcare was the market response to increases in consumer out-of-pocket spending that accompanied the growth of high-deductible health plans over the past 10 years or so. These solutions gained traction during the pandemic as more people tried, and found that they liked, digital healthcare technology, and investors have taken note: in 2021, a record-breaking 24% of all digital health funding went to D2C-only healthcare brands.

The appeal of D2C health solutions

According to Mercer’s most recent National Survey of Employer-Sponsored Health Plans, 40% of all covered employees are enrolled in a high-deductible health plan associated with a Health Savings Account (HSA) or Health Reimbursement Account (HRA). By some estimates, nationwide annual out-of-pocket spending on healthcare is nearing $500B. As employees continue to take on more financial risk through rising premiums and deductibles, they are exercising greater control and agency over their healthcare decisions. Consumers are becoming increasingly more comfortable with digital health tools. A recent survey on digital health adoption by Rock Health found that 73% of telemedicine users intend to continue using it at the same rate or higher in the future. Simply put, digital D2C offers healthcare consumers the same “at your fingertips” convenience that consumer-focused models in other industries perfected long ago.

D2C brands also project a refreshingly untraditional approach to healthcare – and people are buying it. How many? Preliminary results from Mercer’s latest Inside Employees’ Minds survey found that 63% of employees say they purchase health-related products or services outside of their employer’s benefit plan. The most common purchases were related to prescription drugs (e.g. GoodRx or PillPack), vision care (e.g., Warby Parker) and dental products (SmileDirectClub). Mental health apps like BetterHelp or Calm are also popular. These are all relatively big-name brands, but employees are also purchasing less well-known products and services, in care categories that employer health plans may not prioritize. These include products specific to men’s and women’s health, skincare, and home diagnostics.

What employers can learn from the success of D2C brands

With the balance of power tipping towards employees amidst the Great Resignation, there’s a case to be made for approaching benefits in a completely new way – by addressing the needs and preferences of healthcare consumers in the same manner that D2C brands do. By learning from D2C successes and leveraging their strategies, employers may find that they can add considerable value to their benefit programs in today’s tumultuous environment. Here are some suggestions for how you might incorporate what D2C does well in your own program:

• Communications and marketing: Consider alternative approaches to distributing benefits information to employees. While employers don’t have the luxury of the enormous marketing budgets that D2C brands enjoy, accessible and consumer-friendly approaches, such as through social media (e.g. mainstream platforms like Instagram and TikTok or enterprise social networks) and messaging from internal “influencers,” may foster increased engagement
• Convenience: Employees are looking for products and services that are simple and easy to use. The pinnacle, of course, is the shopping experience on Amazon. Employers need to continually explore opportunities to simplify members’ healthcare and benefits experience.
• Removing traditional barriers: Strategies that try to drive positive healthcare choices and behaviors can sometimes result in avoidance of care. Identify opportunities to add flexibility and additional supports for your employees – financial or otherwise – to help eliminate barriers to necessary care.
  
• Price transparency: The simplified and transparent pricing model of many D2C brands is critical for employees managing their finances, allowing them to ascertain if they can spend less on a product or service by buying it directly rather than through their employer-sponsored benefits. Work with your vendor partners to implement more consumer-friendly pricing models.

We can expect new D2C healthcare companies in many categories of care to enter the fray in the coming years, influencing the healthcare choices of employees. Employers should take note of the successes of D2C brands and monitor the role these products and services may play among their employee population. In a challenging time for workforce attraction and retention, leveraging D2C strategies may be the answer employers are looking to create an innovative and flexible benefits program that focuses on employees’ needs as healthcare consumers.