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Will Consumers Ever Let Tech Companies Control Their Health Care?

Partner, Health & Life Sciences practice for Oliver Wyman

Health consumers see the health care world around them changing, but they aren’t always sure if it’s good for them or not.

They love Amazon, but haven’t yet grown completely comfortable seeking health services from organizations outside the traditional health care space. They typically trust their physicians to help manage their medical records, but don’t quite trust them to provide apps or tools for independent health management.

Sobering Message for Health Care Companies

Compared to their technology and retail competitors, health care insurers and providers don’t fare well on critical consumer loyalty measures.

When Oliver Wyman asked consumers in the U.S. whether they were likely to recommend organizations they had experience with to their friends or family, consumers were far less likely to say they would recommend health care organizations (health insurance companies, hospitals, and retail pharmacies) than general retailers (like Walmart and Target) or technology companies (like Apple and Google). 

  • Health insurance companies were rated 30 points lower than retailers and 20 points lower than tech companies.
  • Hospitals scored more than 40 points below retailers and 30 points below technology companies.
  • Retail pharmacies fared better than other health care insurers and providers, scoring 15 points below retailers and 5 points below technology companies. This more positive performance likely reflects that retail pharmacies are hybrids between health care and retailers and have already been working to find ways to serve health needs in consumer-friendly ways.

Headwinds for Disruptors As Well

Despite consumers’ generally rosy view of retail and technology organizations, they remain skeptical about the idea of retail and tech companies entering the health care field.

When we asked consumers who they’d prefer to buy health care services from, or who they were comfortable giving their personal health information to, health care providers and insurance companies still topped the list.

Eighty-two percent of survey respondents would share personal health information with their primary care physicians, 46 percent would share it with their hospitals or health systems, and 30 percent with their health insurers. Far fewer respondents would share this information with nontraditional players: Only 5 percent with a mobile app and 3 percent with an online retailer. 

Data and Relationships Matter

Data will be a key point of strategic control in the health care landscape, and consumers still express more confidence in sharing data with health care providers and insurers than with emerging tech and retail competitors. 

Consumer relationships are another critical point of strategic control. Retail and technology organizations have those relationships to an extent, but they don’t yet have full consumer trust when it comes to health care applications of those relationships.

The recent vertical consolidation across the industry, such as CVS-Aetna and Walmart-Humana, reflects the value of these strategic control points and of associating more traditional health care brands with retailers as a way to secure those points.

Consumers don’t like their health care services options, but they don’t seem to trust anyone but health care insurers and providers to do the job.

Will health care insurers and providers build more magnetic, consumer-friendly offers and service models? Or will new entrants build necessary trust and credibility with consumers?

Traditional health care insurers and providers don’t have to become Amazon. But they must make consumer interaction easier.

Preferences Vary with Age

Millennials are now well into their adulthoods. Some are approaching 40, saving for college tuition for their children, caring for elderly parents, and managing their own growing aches and pains.

Millennial attitudes are the future of health care, and they tend to perceive technology companies more favorably than baby boomers do.

Regarding net sentiment, millennials rated health insurance companies 20 points lower, hospitals 22 points lower, and pharmacies 17 points lower than did boomers. While both generations tend to view retail companies similarly, millennials rated technology companies 15 points higher.

The more millennials take the reins on health care decision-making, the more traditional health care insurers and providers will be disadvantaged by the innovation of the disruptors.

It’s also a mistake for health care insurers and providers to think they can necessarily rely on baby boomers, as boomers often follow trends started by younger generations, for example, your parents probably have smartphones.

Consumer Loyalty Is Not Created Equal

Another worrying sign for traditional health care insurers and providers: Consumer loyalty toward incumbent health care organizations often depends on out-of-pocket medical costs.

Those with high deductible plans perceived health insurers and hospitals in significantly lower regard compared to industries like retail, technology, and retail pharmacy—two times more negatively than general retail, for example.

But all categories of consumers trust their personal doctor more than any other entity to provide a variety of health care services—from monitoring health through a wearable device to providing access to a health guide who would help them make health care decisions.

What’s the Care Delivery of the Future?

Traditional health care insurers and providers don’t have to become Amazon. But they must make consumer interaction easier. The trick is in how they do it. It has to feel genuine and authentic.

This means redesigning service models and products and expanding their reach so consumers achieve greater well-being daily. This includes creating new channels—digital and otherwise—for consumers to access health care, including those that come right to the home.

Indeed, consumers are growing more comfortable with home-based care. For instance, 33 percent of respondents said they’d consider having a doctor or nurse visit their home to perform an annual physical, and 30 percent would be open to minor medical events being addressed in the home. 

For innovators, moving into core health care services may be tough, but many services are adjacent to core health care/health insurance. Those include physical fitness and mental well-being, which emerging players may have permission to enter. These adjacent services are often on consumers’ minds daily, in contrast to core health care services.

As consumers seek solutions to their acute problems as well as broader issues (How do I get enough sleep?), the organizations that can provide solutions will win consumer loyalty.

Helen Leis

Partner, Health & Life Sciences practice for Oliver Wyman

Helen Leis is a partner in Oliver Wyman’s Health & Life Sciences practice and co-head of the New York Office. She provides strategic planning, large-scale transformation, and organization alignment advice to clients in healthcare (payers, providers, enablers), public health, consumer companies, and private equity. In healthcare, Helen focuses on the shift to consumer-centric business models.

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