This trend presents an enormous challenge for traditional practices.
Not too long ago, the idea of seeking healthcare meant choosing from a rather short list: a visit to a primary care physician, a referral to a specialist, or a trip to the ER. Over the last decade, consumer options have dramatically expanded. Urgent care facilities and retail clinics provide access to care in locations ranging from strip malls to convenience stores. Ambulatory surgical centers provide an appealing alternative to a hospital stay. In-home care, remote monitoring, and -- as we’ve seen in the past two years -- telehealth eliminate the need for frequent trips to “the doctor’s office” in some cases. In short, there is no shortage of supply, and choice is abundant
Traditional retailers and large tech companies are the most recent and potentially most disruptive entrants to the traditional “doctor’s office,” providing consumers with more choices in how and where to receive healthcare. Walmart unveiled its first health center in 2019, the same year Amazon Care launched as a provider of medical care to Amazon employees and their families. More recently, Dollar General announced their debut in healthcare services. CVS, whose decades-long journey from “health and beauty” supplies to healthcare has reached a fever pitch, just announced a strategic shift toward primary care.
This trend presents an enormous challenge for traditional practices, as earning the loyalty of patients will become increasingly difficult in an already supply-rich health economy. Health systems are already experiencing difficulty in both earning and maintaining patient loyalty. Patients are consumers, and like all other consumer behavior, they are not loyal to healthcare brands. To garner loyalty among consumers, health systems need to understand the options against which they compete and what sets their services apart.
Healthcare consumers “split” their care across an average of 4.2 provider networks. That could include everything ranging from a primary care practice to urgent care to telehealth services. Trilliant Health’s most recent analysis found that most health systems do not have strong loyalty among their consumers. Of the health systems included in our analysis, overall consumer loyalty ranged from 42 to 70 percent. Close to half the time these consumers sought care, they received it from another provider.
Think about healthcare consumption like grocery shopping. Many factors go into shoppers' decisions about where to purchase their food: proximity, convenience, prices, and quality. All of these factors can also fluctuate, especially with the forces of competition and supply. Similarly, these two forces are the most common influences for healthcare consumers to “split” their care across providers in a market. In order for health systems to foster loyalty among their consumers, they need to understand the motivations of their behavior and the market that influences them.
Competition is a great place to start. Trilliant’s analysis of “splitters” -- consumers who received 30 to 70 percent of their care from a single provider network -- found that as competition grows, so does the percentage of splitters. This holds true for health systems regardless of geography or market size.
Given this correlation, the increase in retail players as primary care providers should alarm health systems that want to retain their primary care consumers and generate referrals for specialty care. Brands like Walmart and Dollar General, while not immediately associated with healthcare, are strong and they bring their own layer of loyalties associated with familiarity, convenience, and cost efficiency. With their massive scale and resources, these new entrants can also compete on price.
Healthcare providers not only need to understand their competitors, but also their consumers. Every healthcare provider can improve their consumer loyalty by developing evidence-based strategies to match consumer health needs. Decisions about what health systems’ targeted populations need should not be based on anecdotal references but instead on localized data that factors in market trends. Large retail chains and tech companies understand this, and their expansion plans reflect consumer preferences at the local level.
In order to maintain or grow loyalty, provider networks must meet the preferences of their consumers: deliver a high standard of care and offer robust, convenient services to compete with traditional provider brands and new entrants from retail and virtual services.
Sanjula Jain is the senior vice president for market strategy and the chief research officer for Trilliant Health.