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Editor’s note: The fourth in a series of seven articles by A.T. Kearney on the trends that are radically transforming the health sector.
By Todd Huseby and Carol Cruickshank
Todd Huseby
Carol Cruickshank
Traditionally, the approach to health in the United States has been reactive or at best responsive. Patients visit their providers only when an issue arises; providers offer limited preventative outreach to patients; and insurers spend more time paying incoming bills than shrinking future ones. In recent years, however, there has been a shift. Instead of simply treating sickness, the patient, the payer and the provider are all starting to work proactively on fostering wellness.
This change is inspired in part by the increased awareness of the importance of wellness and by patients’ growing ability to obtain information about their health. The fitness and health tracking devices worn by a significant percent of the population collect a wealth of data that patients can use to monitor their health. These devices, coupled with telemedicine, can allow providers to monitor patients remotely and contact them to encourage adherence to treatments.
It is this type of “nudge” — at all levels of the health value chain — that will create the behavior change that is fundamental to fostering greater wellness throughout the population. Patients can be nudged to move more during the day, for example, by providers that offer loyalty points, health insurance discounts, or other incentives when patients reach specific fitness goals. A 2015 study of studies on the effectiveness of these financial incentives for physical activity found that such rewards were likely to improve patients’ physical activity, at least in the short term. And primary care physicians and retail pharmacists can also be nudged through their compensation structures to encourage patients to change their behaviors or adhere to preventative medications.
We are only beginning to see these programs to nudge patients and providers, however, and these efforts are not yet developed enough to reap their full potential rewards. While many patients wear devices that collect health data, most doctors don’t yet review this data, and neither doctors nor insurers are using technology to issue alerts based on the health data they collect. In fact, only 34% of providers stated that they are using patient-generated health data (such as blood pressure readings from fitness trackers) at scale to provide proactive treatments.
While several tailwinds are pushing us toward fostering wellness, there are structural barriers that are working against this trend. As private health insurance companies know that Medicare will be responsible for health care costs when patients reach 65 years old, for example, these companies do not have strong incentives to maintain the health of younger people and spend on the preventative services that will lead to lower costs in their elderly years. Similarly, compensation structures for physicians incentivize them to provide high-cost treatments for diseases rather than lower-cost preventative care in many cases.
In the next decade, though, we can expect that attitudes toward health monitoring will reach a tipping point, and the behavior changes that take place will likely mirror the pattern we saw for smoking cessation over the last 50 years. While in the 1970s there was little public awareness of the negative effects of smoking on health, early smoking cessation efforts worked to change the way people understood the impact of smoking and nudged them to think about quitting. Just as it eventually became common knowledge that smoking is not good for health, it will likely soon become widely known that tracking one’s fitness and nutrition are part of basic health maintenance.
And as “sin taxes” for cigarettes and smoking bans pushed the population further toward smoking cessation, policy-driven decisions will also make a difference in this domain. We may see taxes discourage unhealthy consumption, or workplaces and school cafeterias may offer healthier options and make less-healthy food unavailable or less convenient. Soda, for example, has already been removed from many school cafeterias, and many workplaces have moved soda and salty snack machines to inconvenient locations. Even convenience stores have moved some of these less-healthy items to less prominent positions in the stores.
The chain drug industry has an obvious opportunity to lead in this effort: Retail pharmacy already serves as a trusted health care provider, pharmacists interact with patients every day in their stores, the industry has a brand image related to health, and most retail pharmacies already have loyalty programs and digital connections with patients. Moreover, customers are looking for and expecting more digital interactions from their chain pharmacies, and they may welcome a pharmacy’s nudges or incentives for healthy behaviors.
As pharmacies increasingly embrace this opportunity to complement their frequent interactions with customers in their stores with digital interactions, they will need to focus on cost-effectiveness, customization, stratification and prioritization. As different incentives work for different groups of patients, and not all cohorts will change their behavior, pharmacies need to identify targeted strategies for each cohort and prioritize the groups whose behavior is most likely to change. Most importantly, the nudges they offer must be personalized and relevant to be effective in changing behavior and engaging customers. The personalized insights pharmacies gain in periods of acute sickness or at the early stages of chronic disease can be used to support wellness and to offer preventative care to manage chronic disease and prevent conditions from worsening. And allowing patients to set profiles that indicate areas in which they would like pharmacy nudges to reinforce proactive, preventative behavior will ensure that these efforts improve relationships with patients rather than damage them.
While chain drug stores have the opportunity to develop this type of relationship with patients, their success in this domain is not a foregone conclusion. Health systems and payers are redefining their role in prevention. Technology companies are also working to create these relationships, as are disruptors such as Amazon and startups. The United States’ economic loss due to health issues alone is $260 billion per year, and the magnitude of this problem is attracting more and new players, both traditional and nontraditional. These companies are often more comfortable than chain drug stores with innovation and disruption.
Ultimately, these proactive efforts to improve wellness and reduce disease could, over time, radically transform the nature of health and the cost dynamics straining the U.S. health system. By addressing the causes of chronic conditions through exercise, nutrition and other proactive activities, Americans could dramatically reduce health spending and increase overall economic productivity. Behavioral change is difficult, and no single system has the recipe. But cumulatively, these efforts will improve the chances that patients adopt a new model for their health maintenance.
Todd Huseby and Carol Cruickshank are partners for the Americas in the health practice of A.T. Kearney, a leading global management consulting firm. They can be reached at todd.huseby@atkearney.com and carol.cruickshank@atkearney.com, respectively.
