Consumerization of Healthcare: We See You, Amazon

What exactly is “consumerization of healthcare?” Put simply, it’s a broad shift in focus from the healthcare market as a whole to individual healthcare consumers. Traditionally, health plan sponsors have had the biggest influence on where their members go for care and what medical services will be paid for. But that could be changing as individual consumers seek healthcare in new forms -- and pay for it themselves.

According to health economist Jane Sarasohn-Kahn (author of HealthConsuming: From Health Consumer to Health Citizen), high deductibles and co-insurance have forced patients to become consumers. She says, “They are looking for two things as they make their spending choices: value (getting the most for their money) and values (what’s meaningful and important to them).”

And the market is responding. Health-related products and services are emerging within retail, technology and consumer packaged goods spaces to address individual consumer health needs. Here are three types of health products that people are increasingly choosing to purchase outside of their health plans, seeking value and values.

  • Health apps. There are 48,608 iOS health apps available today and they just keep coming. The most popular health apps focus on fitness, such as FitBit, with 27.4 million unique users monthly, and My Fitness Pal, with 19.1 million. But others offer actual healthcare. Apps like 98point6 provide on-demand text-based primary care, and Just Answer allows a consumer to chat with on-call doctors 24/7 on topics like drug interactions, blood pressure, tooth pain, and skin problems for a fixed monthly fee.
  • At-home test kits. Home testing may not be a new concept, but companies like Everlywell are making it easy for a consumer to provide a sample, mail it in and get the results on line. Everlywell currently offers approximately 30 different testing kits ranging from food sensitivity to cholesterol to COVID-19. They are available for purchase online, in retail stores, and may be sponsored by health plans or employers.
  •  Whatever Amazon is selling. The company bought PillPack, an online pharmacy, two years ago with the vision that shoppers would be able to fill a prescription at the same time they were shopping for everything else they buy on Amazon. Amazon Prime members can get medications delivered for free within two days and with discounts of up to 80 percent for generics and up to 40 percent for brand-name drugs – so they conceivably could spend less than they would using their insurance benefits. And now there is Amazon Care, which the company is testing on their own employees. Currently, members can connect with a clinician via video calls or in-app text messaging at their convenience, but the service offering seems likely to expand and may soon position Amazon as a serious player in healthcare solutions. 

So what does the consumerization of health mean for employer-sponsored plans? Possible paths forward include:

  • Do nothing – if the new options help, great.
  • Pressure current vendor partners to incorporate similar conveniences to drive engagement and more efficient care.
  • Embrace the new options, leverage to drive more efficient care, integrate into your benefit strategy and communications.

At the very least, the market is challenging us all to think differently about how we offer, communicate and manage health benefits. A good place to start is a review of your current benefits using the lens of the consumer – “value” and “values” – as noted above. How do your plans score? 

Tracy Watts
by Tracy Watts

Senior Partner, National Leader for U.S. Health Policy

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