Comparison shopping is as American as baseball and apple pie. Our economy is dependent on consumer spending: 70 percent of our gross domestic product (GDP) is driven by consumer purchases, thus merchandisers of goods and services sold in the U.S. use a variety of tools to compare and contrast their wares to competing offerings to make the sale.
The maturation of online shopping tools and social media has made comparison buying easier and mass customization of the shopping experience accessible. The travel, automotive, fashion, publishing, personal computer, appliance, and life insurance industries are among many at the epicenter of direct-to-consumer web-enabled comparison buying that is transforming their industries at warp speed.
By contrast, comparison buying by consumers in health care is modest at best. To many, especially physicians, the notion of "consumerism" and "comparison shopping" evokes a visceral reaction: they're "patients" not "consumers" many would say. And throughout the system, comparison shopping is still an evolving strategy.
Hospitals compare their satisfaction and quality ratings cautiously. More often than not, a hospital's marketing director promotes a hospital ranking rather than compare performance with a local competitor side-by-side using verifiable measures (i.e., observed to expected mortality, hospital acquired infections, prices for uncomplicated services and so on). And after all, because there are 700 "top 100" hospitals, choosing which list to use in branding is a less risky than head-to-head positioning, especially since physicians, not consumers, drive revenues.
Health insurance plans, likewise, are cautious about head-to-head comparisons among peers. The commercial health insurance industry has been at the forefront of providing quality and safety measures for providing comparisons between physicians and hospitals to its enrollees for more than a decade. But comparisons of health insurance plans are not readily available or easily understood--perhaps the reason the Affordable Care Act (ACA) requires online tools and standard language to assist consumers in comparison shopping for insurance. And like hospitals, local plans often use the same physicians as "network" making clinical differentiation more difficult.
Drug manufacturers, likewise, guardedly engage comparison shopping, spending almost $5 billion annually in direct-to-consumer (DTC) advertising, but investing the lion's share of its marketing in Business to Prescriber (BTP) efforts--sales reps that call on physicians and trade advertising in medical journals densely compacted with scientific results and on-label guidance. Its focus on comparison shopping by prescribers between competing brands is delicate--most studies historically vary in inclusion criteria useful for head-to-head comparison, and most randomized trials are a comparison to a placebo rather than a competing brand. And its efforts to stimulate comparison shopping by consumers is evolving: at the end of TV ads, "consult your doctor" remains the norm, though some consumers pursue alternative channels.
And the medical device industry might be the least prone to BTC comparison shopping: purchasers of medical devices from the industry's 6,000 manufacturers are physicians, hospitals, and other providers who generally "shop" among options directly or through group purchasing organizations (GPOs) to which they belong, passing through device costs in premiums or reimbursement virtually invisible to patients (consumers). And because contractual terms are guarded secrets in most instances, prices paid for devices are rarely accessible to patients or known by actual users.
As I read the ACA and follow guidance, rules, and draft legislation related to its implementation, I am struck by its alignment with transparency and comparison shopping for consumers. Seems to me, in at least four major elements of the law, comparison shopping is explicitly envisioned or, at a minimum, the groundwork laid:
Access to information about which drugs and treatment options work best: the Patient-Centered Outcome Research Institute (PCORI) per Section 6301 of ACA is tasked with implementing the U.S. comparative effectiveness research program--a set of tools to equip prescribers, providers, and consumers to know which treatments and compounds work best, comparing the strength of evidence for each regardless of cost. Notably, PCORI has two standing committees: a methodology committee to assure its methods are precise and rigorous, and a communications committee to assure its work is useful to comparison shopping by consumers. In September 2011, the Center for Health Solutions released an Issue Brief: Comparative Effectiveness Research in the United States: Update and Implications, contrasting comparative effectiveness research (CER) efforts in the UK, Canada, Germany, and Australia. Though the approaches in each varied differently, a common thread in all is transparency--making sure that citizens have access to information on which decisions may be made easily and objectively.
Access to information about which insurance plans meet individual and employer needs best: provisions in ACA around the implementation of health insurance exchanges (HIX) by 2014 require states to invest in web-based tools for individuals and small employers to conduct comparison shopping easily. And to the industry's credit, it already provides report cards about its performance that feature side-by-side comparisons. But ACA goes further by standardizing coverage and language to make comparison easier for individuals.
Access to information about which hospitals and physicians work together to get the best results in managing health: ACA promotes clinical integration and care coordination between physicians, hospitals, allied health professionals, and long-term care providers. It encourages participation in medical homes, accountable care organizations (ACOs), and bundled payments, and it penalizes providers who have higher than expected hospital readmissions, higher utilization, and higher costs than otherwise expected.
Access to information about physician performance: ACA tightens conflicts of interest disclosures around physician ownership of technologies or facilities they use. It changes the rule in the Physician Quality Reporting System (PQRS) from awarding physicians for reporting to rewarding physician performance. And it suggests that core competencies necessary to optimal performance may have more to do with use of information technologies and lifelong learning than traditional medical education and continuing medical education (CME) credits. Thus the emphasis on meaningful use and penalties starting 2015 for failure to adopt.
Since 2008, we have surveyed more than 20,000 health consumers in the U.S. (Deloitte Center for Health Solutions consumer survey research is available online at www.deloitte.com/us/2011consumerism.) Relative to consumer shopping in health care based on these surveys and our forecasts of insurance coverage and household discretionary spending, three conclusions are supported by strong and compelling data:
- Consumers believe the health care industry should be more transparent and enable comparison shopping.
- Consumers believe health care is complicated and complex, but not incomprehensible. They want tools.
- Consumers are actively shopping in health care.
Regrettably, many in the industry shy away from engaging individuals as consumers. It is more comfortable perhaps "treating patients" than offering solutions to consumers.
They are neither patient nor patients, they are consumers, and they will shop. No corner of this industry gets a pass. How we address consumer demand for comparison shopping will in large measure determine the system's winners and losers.
Paul Keckley's "My Take" column appears weekly in the Deloitte Center for Health Solutions' "Monday Memo."