Nashville Business Journal | Joel Stinnett
As health care consumers become more educated, companies are going to have to rethink what they are selling — and who they are selling to.
That’s the message sent by Joshua Raskin, senior research analyst at Nephron Research LLC, to about 700 attendees at the Nashville Health Care Council’s annual Wall Street’s View on Prospects for the Health Care Industry luncheon inside the Omni Hotel.
Raskin was one of four panelists Thursday who discussed pressing industry topics presented by Community Health Systems CEO Wayne Smith, such as changes in acute care, the Affordable Care Act, drug prices, the new tax bill and emerging health care technologies.
Raskin said health care has traditionally been a B-to-B business but will have to move to more of a B-to-C model as consumers become more educated through sites like Healthcare Bluebook and GoodRX — potentially shrinking profit margins.
“It’s hard to imagine transparency helping anyone from a pricing perspective,” Raskin said. “Individuals are going to be armed with the actual data around cost and quality and you’re going to see market share shifts. I think that’s pretty obvious and that will be good for some folks and bad for others.”
Managing Director for Credit Suisse A.J. Rice said you can see the move toward consumerism in deals like the potential CVS and Aetna merger and the rise of urgent care clinics. The growth of high-deductible health insurance plans is fueling a search for affordable care, he said, and driving consumers away from traditional hospital emergency rooms.
The industry is just beginning to feel this trend and trying to decide how to react, Rice said.
“What we’re told is the rate of increase [of consumerism] is moderating on the penetration of high-deductible plans,” he said. “In addition to that, it probably takes you a year or two to figure out how to maximize that benefit and that’s still playing through the system, I think.”
One factor that could speed up that process is emerging technologies like telemedicine, Raskin said, which could give patients a cheaper option for care inside the home or at a retail location.
While hospital admissions are down across the industry due to urgent care clinics and technology, the panel agreed that an aging baby boomer generation, low unemployment and the stabilization of the Affordable Care Act give traditional care providers reason for optimism.
“Everybody in health care is talking about consumerism, connectivity and how we can do a better job in that respect,” said Smith, whose company owns 127 hospitals. “It may be moving relatively fast but it will take a while for it to really kick in. It may be two or three years before [we] see the impact of all that.”