Will Consumers Pay for e-Health?

Lots of health startups out there are trying to zero in on ideas that will improve the lives of patients with chronic conditions. And even though patients are the target audience of this technology, companies seem to be designing their products by first asking, “What will health care providers and and health insurers pay for?” It makes sense, assuming that these two groups will foot the entire bill for electronic health (e-Health) innovations. But it doesn’t make common sense. Why not design the tech for those who are going to use it in the end?

The discussion came up at the Digital Health Summit, a two day conference at the International Consumer Electronics Show. Health 2.0′s Matthew Holt moderated a segment called “Who’s Paying the Bill for e-Health?” When Holt asked a panel if consumers would be willing to pay, Senior Advisor of of the American Association of Retired Peoples Bill Walsh indicated that most AARP members would answer “no.”

“What they’re telling us about mobile health is, ‘Gee, this is interesting but why isn’t my insurance company paying for this? This is just another medical device,’” Walsh said.

A lot of insured people would probably answer the same way if asked, in general, if they’d pay an extra medical expense. On the other hand, if you asked patients about a specific product or service that would actually improve their quality of life ― they’d probably think about it …

Walsh said that the number one concern of AARP members as they age is staying independent. It’s such a priority that as many as eight out of 10 members are willing to pay for certain devices that help them live on their own longer, he said. But their interest came only after they were introduced to specific devices, for example, Vitality GlowCaps, a container cap that reminds patients to take their medications.

“What’s remarkable was the response we got from our people,” Walsh said. “They’re like, ‘Oh my God, I didn’t realize that existed. Is that out there?’”

“I think what maybe we all fail to realize is the low level awareness among the general population,” he said.

The lack of awareness is due to digital health not hitting the mainstream yet, and it’s one reason patients reject the idea of paying for the tech. Another reason can also be attributed to the reluctance to think about patients as consumers of health care. In a recent Harvard Business Review article, Augusta Meill and Gianna Ericson argue three main reasons why treating patients as consumers can be a problem:

Patients don’t want to be there: People don’t seek out healthcare without a reason. Something is wrong and patients want to solve it and get back to normal. When patients are required to be proactive decision-makers, the health care system is often casting a very reluctant hero into the role.

Patients aren’t equipped to be there: Even when patients are willing to be decision makers, they may not have the tools. At a time of unusual stress, the system asks them to absorb technical information and make difficult decisions that require specialized expertise.

Patients aren’t in it alone: To design for patients alone is to forget that they are part of a complex system and aren’t often independent decision-makers. Decisions are shaped by other stakeholders: friends and family who support the patient, the insurance company who foots the bill, practitioners who provide care and expert advice, the hospital administrators who inform system-level protocol, and so on.

All of this is true in many cases. There are medical services and devices that, especially during a time of medical crisis, should be covered by health insurance. But some health products are different. Take a specific group of patients and consider their common priority, and see how those three points are not true. An elderly person who wants to continue to live independently:

1. Does comes to the health care market willingly, and he’ll seek out a combination of products, like GlowCaps, that will facilitate him in living independently.

2. Will use certain devices that can equip him for a time of unusual stress. For example, if he takes a fall, a digital alert system will contact a loved one.

3. Isn’t in it alone in making medical decisions, so the systems he uses should be designed with his entire support network in mind.

AARP members are a part of just one consumer group. If innovators take the time to figure out the top needs of other patient populations, they can design products with the users in mind. Director of the Center for Connected Health of Partners Healthcare Dr. Joseph Kvedar, who was also on the CES panel, recently wrote a blog post about what patients really want in their health care products.

“Consider with me how we as innovators should best create the programs, technologies and services that chronically ill patients don’t know they want or need yet … How important is the patient perspective in the development of connected health programs and services?”

Very important. It’s OK to think of patients as consumers. They’re they ones who can tell innovators what they really want ― and even what they’ll be willing to pay for.

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  • Eloy M. Rodriguez

    There is a concept called “willingness
    to pay (WTP)” that is used to evaluate the perceived value of some
    service. There are different studies all over the world. One of them evaluated
    in 11€ the value of an eHealth service, but define as well as procedure to
    calculate different scenarios.

    If you are paying a health insurance or you are covered by a public service you
    will not like to pay an extra fee, but it the service gives you a real value,
    you will be interested to pay if affordable, or at least you will appreciate
    that this service is offered by you private or public insurance.

    Other subject related to your article is
    the difficulty to listen the patients/customers opinion. I’ve discovered a nice
    cloud service to contact your clients and get
    their opinions on line, with a funny and fast way. Listening patients or
    involving them in the eHealth services definition using a Living Lab methodology can help to
    align the offering to the real priorities of health customers.

    • Victor Inostroza

       what is the name of that study?, you have a url where you can review it?

  • http://www.mightycasey.com MightyCasey

    This is the end result of the Other People’s Money syndrome prevalent in US healthcare. We’ve been paying for healthcare with OPM since WWII brought in employer-paid health benefits, which the feds saw as a great mandate. 60+ years later, we’ve got a broken system because healthcare industry customers - patients - have no connection with the costs of their choices. Whether it’s a choice of coverage or a choice of lifestyle, there’s little incentive to actually be/get healthy, it’s all about the billable code and who we can get to pay for [whatever]. Since patients became items passing thru the system on a conveyor belt, rather than customers, all parts of the healthcare delivery system are out of whack. Educated patients are what the system is desperate for, but healthcare as an industry seems to still be stuck talking within its own circles, and forgetting to invite the customer to the table.

  • Armandroy

    It is hard to say, besides consumers are classified in different groups and only a minority will be willing to pay for e-health  unless there are big discounts or soild agreements/businesses with big companies and public institutions.

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