While walking down the street, a person opens an app on her smartphone and orders a cappuccino. When she arrives at the coffee shop, her drink is waiting. While sipping her drink, she uses your smartphone to request a car, which is waiting for her when she finishes her coffee. On her ride, she looks up background information for an afternoon meeting, downloads a podcast and finds a discount parking spot for an evening event downtown.
Digital interaction is not a trend; it’s fully entered the mainstream of American life. Today, 72 percent of Americans and 92 percent of millennials own a smartphone. Almost three-quarters of Americans have used some type of shared or on-demand online service. Total digital media use has nearly tripled since 2010, and smartphone use has grown 78 percent since 2013.
The same is happening in health care. The person ordering coffee from her smartphone could just as easily have used her smartphone to check how many steps she had walked that day, review her lab test results, refill a prescription, compare provider prices and have a video visit with her doctor. The digital revolution is not coming; it’s here.
Three powerful forces have brought digital health care into the mainstream and will keep it there.
The necessity of convenience
For many Americans, digital health care is not a convenience. It’s a necessity.
Americans work more hours than people in almost any other country. In 60 percent of households with children, both parents work. In addition, more than 40 million adults in the United States care for friends or family members, a situation that will intensify as baby boomers continue to age and as the proportion of the population available to care for them decreases.
Women make approximately 80 percent of the health care decisions for their families, and almost two-thirds of caregivers today are women. AARP defines the average family caregiver as “a 49-year-old woman who works outside the home and spends about 20 hours a week caring for her mother without pay.” These “alpha daughters” are managing full-time jobs, households, childcare and care of elderly parents, coping every day with logistical, emotional and financial stress.
Only 17 percent of the time spent on a doctor’s visit — including travel and waiting — is spent seeing a doctor. Time is becoming a valued resource that the health care ecosystem has too long ignored.
Digital services such as online scheduling, online bill paying, digital communication with clinicians and virtual visits are essential for busy people — particularly alpha daughters — to manage their lives. If a health care provider does not offer adequate digital interaction, these consumers will have no choice but to find a provider that does.
This reality is coming to light in a variety of ways. Consumer-based online scheduling is fully embedded in many service businesses and has started to take hold in health care, especially for ambulatory services. Ascension’s experience has shown that, even with only modest marketing, consumers quickly discover and use online scheduling for physician, urgent care, radiology and even emergency department services. Ascension has found that, depending on a number of factors, typically 30 percent of people who use online scheduling are new to the health system, which suggests that digital engagement is a path to significant strategic growth.
The quality of experience
Internet companies have shown that digital interaction can satisfy consumers to an unprecedented degree. To find information, make transactions and even interact with other people, digital tools offer a positive and usually preferable experience compared with traditional methods. Increasingly, Americans would rather summon a car by smartphone than wait for a taxi, watch streaming video than go to the theater, buy online than go to a store, and even text friends than see them in person.
For health care information, transactions and interactions, digital connectivity is also becoming the method of choice, particularly for millennials (ages 18-34 and the largest segment of the workforce) and Generation X (ages 35-54). According to 2015 and 2016 Salesforce surveys:
- Seventy-two percent of U.S. adult internet users look for health information online.
- Sixty-six percent of Generation X members said they would be open to virtual care as an alternative to office visits.
- Seventy-six percent of millennials say that in choosing a doctor, they value online reviews from other patients.
- Seventy percent of millennials would choose a doctor who offers an app for appointments, bill paying and viewing health data over a doctor who does not.
- Seventy-three percent of millennials are interested in interacting with their doctors using mobile devices.
- Sixty-three percent of millennials are interested in sharing health information with their doctors through wearable devices.
Consumers are voting with their feet for digital engagement. As noted, online scheduling is becoming one of the most desired functionalities among health care consumers. It may represent the canary in the coal mine for a variety of other consumer expectations for transparency and system navigation. Ascension has experienced more than 40 percent growth per year in online scheduling. The average age of those scheduling online is 35, and 53 percent of users are younger. Equally striking, 67 percent are female, and most indicate they would recommend the service to others.
Supply creating demand
In the digital world, supply of new tools often creates demand that did not exist before. In the past, people did not dwell on the problems of traditional taxi service, but when Uber and Lyft showed something more desirable, the inconveniences of taxis become readily apparent, and people flocked to the innovators. Digital innovation shines a bright light in a dark corner.
Private digital health companies — companies that will shine bright lights in many dark corners — are expected to raise a record $7.2 billion in funding this year. Some of those innovators are developing services to support traditional hospitals and physicians — for example, tools for supply management, care coordination and care experience. Many, however, are focused on more disruptive innovations that show consumers a much improved health care experience.
One focus of innovation has been to apply digital tools to traditional primary care — for example, through direct-to-consumer testing, digitally enabled primary care and telemedicine.
Direct-to-consumer laboratory testing is a $173 million market that is expected to double within the next five years. High-service primary care chains like One Medical Group and Iora Health use digital tools for remote scheduling, communication and care. One Medical has raised more than $182 million, and Iora Health has raised more than $48 million. The market for telemedicine is expected to grow at almost 19 percent annually between 2016 and 2021. It is becoming increasingly competitive, with American Well and MDLIVE leading the field, and several other smaller players emerging, including Carena, VSee, and Zipnosis. All are striving to work through traditional providers, health plans and employers, as well as provide services directly to consumers.
At the same time, health care is the most active segment of artificial intelligence investment. Some artificial intelligence innovations promise to disrupt traditional care processes — for example, using machine learning to automate reading radiology scans, and predictive analytics to personalize treatment. Others will provide consumers with new tools for lifestyle management and personal health monitoring.
As digital photography showed the inconvenience of traditional photography and as streaming video showed the inconvenience of DVDs, these digital health innovations will continue to highlight shortcomings in traditional health care, offering powerful incentives for patients to pursue alternatives that deliver a better experience.
The way forward
Few hospitals and health systems have highly sophisticated digital offerings, and most lack even basic functionalities like online consumer health information, scheduling or payment. Even health systems that have developed innovation centers will be hard-pressed to keep up with the level of focus, talent, entrepreneurship, funding and national perspective of health care’s leading innovators.
The essential first step is to think of digital health care not as a program, an initiative or even a strategy. It is simply the way that consumers interact with the world and the way consumers expect to access their health care. Digital interaction is inherent in every element of a health care provider’s value proposition: quality, price, access, experience and breadth of service.
For many health care organizations, moving into the mainstream of digital health care will have all the challenges of a standing broad jump. They will need to access significant market intelligence, capital and talent in short order. In many cases, a partnership approach will be the best way to provide customers with the desired digital services.
The critical ingredient in making this transition will be a sense of urgency. That urgency can only come by recognizing that, from the perspective of patients and competitors, the digital revolution is already here.
Kenneth Kaufman is chair of Kaufman, Hall & Associates LLC in Skokie, Ill., and a member of Health Forum's Speakers Express. Chris Young is vice president of new virtual market development and incubations at Ascension, the nation’s largest nonprofit health system.