By Nancy Fabozzi
Principal Analyst, Digital Health
Frost & Sullivan


Healthcare organizations are devoting significant time and energy to developing new strategies and processes for patient-centric care. A heightened awareness of the importance of the total patient experience aligns closely with four key market forces:

1. The Rise of Empowered and Informed Healthcare Consumers
A confluence of cultural and societal changes is motivating individuals to become more empowered as consumers. The rise of consumerism in healthcare converges within the broader societal context of consumer empowerment. For individuals, becoming empowered pertains to gaining understanding, confidence, and strength.

The progression to empowerment is greatly facilitated when the right information, knowledge, and awareness come together to guide life choices and decision-making. The ease and speed of information acquisition are critical to consumers’ growing feelings of empowerment. In addition to ease of acquisition and continuous availability, the information sought must be reliable, trustworthy, accurate, relevant, and targeted to the seeker’s intended purpose.

Today, people have almost constant access to data and information through digital technology and, increasingly, a plethora of high-quality consumer-centric healthcare information is available from a variety of sources. People are actively seeking and using these information sources and becoming more empowered in the process. Increased consumer healthcare literacy is mostly seen as a positive development. In fact, healthcare consumerism, or patient engagement, is positioned as the solution to many of the problems that plague the US healthcare system. That’s because of the concept of “accountability.” Being more accountable is a notion that extends across the healthcare ecosystem, encompassing not just payers and providers but also patients who increasingly need to do more and pay more. Empowered and informed consumers and patients want to be—and need to be—a full member of the healthcare team.

2. The Shift to Value-based Care
The US healthcare system is shifting away from traditional fee-for-service (FFS) toward fee-for-value reimbursement that rewards providers based on the quality of care rather than the quantity of care. In 2017, 34% of total U.S. healthcare payments were tied to value-based alternative payment models (APMs) such as shared savings, shared risk, bundled payments, or population-based payments, compared to 23% of all healthcare payments two years ago.[1] With its emphasis on enabling a more holistic care continuum, value-based care is seen as the best approach to reining in unsustainable healthcare costs while also improving care quality, and, ideally, patient engagement and satisfaction.

Value-based care comes with increased financial risk and care delivery must be re-engineered to ensure economic viability under this new business model. Consequently, providers are developing new strategies for better alignment of care processes to ensure collaboration with key stakeholders—including patients and their families—to ensure optimal health outcomes and maximum reimbursement.

Empowered consumers and engaged patients are important components of value-based care. Studies have shown that patients who are involved in their health decisions are more likely to cooperate and understand their disease process. In addition, educated, engaged consumers tend to have better outcomes at lower resource utilization. [2]

3. Changing Competitive Dynamics
The rapid pace of change across the US healthcare ecosystem is placing increasing competitive pressures on payer and provider organizations. Payer organizations seek lower cost care providers for their members and rising premiums and larger out-of-pocket liabilities also drive patients to explore a range of new options. Hospitals, in particular, face new challenges and threats in the form of alternative care settings, including independently owned urgent care and outpatient surgery centers, primary care chains, retail pharmacy clinics, and direct-to-consumer telehealth services.

Accelerating hospital M&A, the growing incidence of vertical M&A with payers purchasing providers, and health plan narrow networks all call for hospitals to look for new approaches to attract and retain customers in the face of declining admissions and shrinking margins.

4. Patient Satisfaction Surveys (HCAPHS)
The Centers for Medicare & Medicaid Services (CMS) launched the HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) survey in 2006 to systematically collect data about patients’ perspectives of hospital care. Since that time, HCAHPS has become one of the most important tools for assessing providers’ progress in delivering on the goals of patient-centric care. HCAHPS is part of CMS’ broader goals in the shift to value. Hospitals are strongly incented to pay attention to the ramifications of HCAHPS due to its impact on their bottom line as HCAHPS scores are used to calculate 30% of value-based incentive payments for participating hospitals.

One way to improve HCAHPS is through developing comprehensive patient education programs designed to improve the total patient experience. As patients are more educated and feel a stronger sense of connection to their own healthcare, their overall patient experience and satisfaction is likely to go up.

As the culture of health consumerism rises, patients will become more attuned to choices they are empowered to make. Publicly accessible health system ratings will increasingly factor into patients’ information-seeking behavior, helping them differentiate between healthcare service providers and systems.

In summary, the demands of consumerism and the shift to value-based reimbursement require all healthcare enterprises to embrace a more patient-centric mindset as a competitive necessity. To that end, healthcare organizations must work proactively to build a positive brand and ensure that patients have a great experience overall.

[1] Health Care Payment Learning & Action Network. Measuring Progress: Adoption of Alternative Payment Models in Commercial, Medicaid, Medicare Advantage, and Medicare Fee-for-Service Programs. October 22, 2018
[2] Health Affairs; Health Policy Brief: Patient Engagement, February 14, 2013

As Principal Analyst, Digital Health, for Frost & Sullivan, Nancy Fabozzi conducts in-depth qualitative and quantitative research on professional and consumer healthcare markets, companies and products. She provides market briefings and consulting services on a variety of healthcare issues, interacting extensively with leading global healthcare experts, including payors, providers, technology vendors, clinicians and industry thought leaders.
Previously, she was Manager, Market Intelligence, for Thomson Reuters, where she provided extensive research services to support tactical and strategic decision-making. Working collaboratively with leadership, she organized and managed the corporation’s global market intelligence infrastructure and developed innovative approaches to proactively tracking and sharing information on key market verticals.

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