Consumer-Driven Health Care and Healthcare Consumerism

Introduction to Consumer-Driven Health Care

The concept of consumer-driven health care emphasizes granting health care consumers the authority to choose, regulate, and stay informed about the health care services they receive. Empowering consumers in this way incentivizes insurers to innovate, creating higher-quality and lower-cost services in response to demand. In this sense, the consumer-driven health movement is regarded as a revolution—a drastic departure from the technocratic, authoritative policies that were unacceptable to both consumers and providers. It enables people to receive the health care they desire at a cost they are willing to pay (Herzlinger, 2004).

Impact on Health Care Service Delivery

The market-driven approach to health care depends entirely on the forces of supply and demand, shaped by the preferences of both providers and consumers. Managed care, by contrast, authorizes a third-party technocrat to regulate all actions with the aim of reducing payments to hospitals and doctors and discouraging consumers from seeking expensive specialist care. However, the promises of managed care to deliver better quality and cost control were ultimately not fulfilled for consumers. Providers, too, were dissatisfied with the constraints managed care placed on their profession (Herzlinger, 2004).

For many professionals, consumer-driven health care represented a path to freedom from the restrictions of managed care. The consumer-driven model aims to lower costs by encouraging people to focus on needed health care, while simultaneously improving quality. It seeks to regulate costs not through rationing, but by motivating productivity, increasing variation in health care options, promoting integrated record systems, establishing specialized care facilities, and advancing personalized medicine (Herzlinger, 2004).

Consumer-driven health care requires that employees have a greater choice among highly differentiated health plans, control over how much they spend on various health care needs, and access to information that supports their decisions. Competition among newly differentiated products helps regulate health care costs, and direct selection by informed employees ensures that costs are moderated through improved quality rather than through restrictions on appropriate standards of care. In a consumer-driven health care system, providers have considerable freedom to bundle care in whatever manner they consider appropriate and to set their own prices. As in other consumer-driven markets, comprehensive information enables users to evaluate provider quality (Herzlinger, 2004).

The Shift from Managed Care to Consumer Choice

In order to combat rising health care prices, health service organizations and planners have been developing various methods to encourage consumers to adopt healthier lifestyles, become more cost-conscious, and exercise restraint in their use of health services. Regulating health care costs requires making deliberate choices between health care and other uses of money. Because the price of most health care is experienced subjectively, it is widely held that no one is better positioned to make these decisions than patients themselves. Few would argue against the importance of active consumer involvement in personal health care as a means of achieving affordability, quality, and security (Vitt & Werntz, 2008).

This shift reflects a broader recognition that consumer engagement in health decisions produces better-aligned incentives between patients, providers, and payers—incentives that managed care structures were unable to generate effectively.

Conclusion

The transition toward healthcare consumerism is still in its early phases. Empirical analysis of consumer-driven health care as a new mode of protecting lives, improving health, and reducing cost is not yet fully complete. Nevertheless, the framework offered by Bachman's five building blocks provides health care managers with a coherent structure for advancing consumerism in ways that align financial incentives with health improvement, giving both employers and employees a meaningful stake in better outcomes (Bachman, 2006).

References

Bachman, R. E. (2006). Healthcare consumerism: The basis of a 21st century intelligent health system. Center for Health Transformation.

Herzlinger, R. E. (2004). Consumer-driven health care: Implications for providers, payers, and policy-makers. Jossey-Bass.

Vitt, L. A., & Werntz, R. (2008). Listening to consumers: Values-focused health benefits and education. Employee Benefit Research Institute, Issue Brief No. 313, 1–11.