Generational differences in health plan, provider preferences

One of the most significant effects the Affordable Care Act has had on the healthcare industry is the increase in high-deductible health plans. The Kaiser Family Foundation/Health Research & Educational Trust 2015 Employer Health Benefits Survey found nearly one in four covered workers were enrolled in a high-deductible plan in 2015, up from 13% in 2010. These plans are designed to involve consumers in the decision to consume healthcare services based on all aspects of value-cost, quality and experience.

This rise in personal responsibility is creating more cost conscious health consumers. A recent survey by Xerox, Healthcare Attitudes 2016, conducted among 761 U.S. adults who purchase health insurance and are healthcare decision makers for their households, found that Millennials (Gen Y, ages 18 to 34), are indeed the most cost conscious generation when it comes to healthcare.

With Millennials eclipsing other generations and currently standing at 95 million strong, it’s critical for health insurance plans and healthcare providers to be aware of this generation’s healthcare spending behaviors and desires in particular.

Cost conscious consumers

The survey found that 50% of Millennials have gone so far as delaying treatment due to cost. A report from PwC also found that Millennials are more likely than the U.S. general population to challenge medical bills and ask for discounts on care.

The health insurance system has long protected the direct consumer from making treatment and utilization decisions based on cost. We’ve had a culture of “do everything you can” with little regard or impact on spending. The system of fees and charges has become so complex and separated from the reality of true costs that historically health consumers have accepted bills and relied upon their insurer to adjudicate on their behalf.

As the data is indicating, this trend is reversing. With consumers feeling the direct cost of healthcare through growing out-of-pocket payouts to meet ever-increasing deductibles, particularly Millennials as more opt in to these high-deductible plans, according to a recent report by Benefitfocus, they’re more likely to question costs and shop around.

Xerox’s research also found that:

• Nearly half of Millennials (43%) list cost as a top consideration when selecting a healthcare provider.

• Gen Xers (ages 35 to 49) are right behind them, with 40% identifying cost as a top consideration.

• The prominence of cost drops off for Boomers (ages 50 to 68), and the Greatest Generation (ages 69+), with only 27% and 22%, respectively, saying cost is a top consideration.

The percentages are even higher when asked about the importance of cost when selecting a health plan, with all generations coming in at more than 50%. For Millennials, the overwhelming majority (70%) list cost as a top consideration, followed by 63% of Gen X, 57% of Boomers, and 53% of the Greatest Generation.

Next: What consumers really want

What consumers really want

Access to information on specific costs is still difficult for consumers to get prior to treatment, and providers need to accelerate their efforts to make relevant price information available to consumers or risk losing them to competitors willing and able to meet the demand for transparency.

Cost consciousness is only part of the changing role of the healthcare consumer, however. As people become more empowered and expected to take more responsibility for their own health management, expectations for their doctors and health insurance companies are evolving.

To achieve personal health goals, Xerox’s survey found that consumers want encouragement and help from providers, with Millennials seeking the most help (64%), followed by Gen Xers (56%), the Greatest Generation (49%), and Boomers (47%). This is encouraging and somewhat surprising, since we generally expect younger generations to turn to their friends and the Internet first and older generations to more readily turn to their providers.

One increasingly loud call from the market is access to personal health data via online electronic health records (EHRs), viewed more and more as a tool to manage lifestyle decisions affecting health. A report from the National Partnership for Women & Families finds consumers continue to see significant value in EHRs, and they believe EHRs have a superior effect and are more useful for themselves and providers than paper records.

Millennials have developed a reputation as the “instant gratification” generation, so it’s not surprising that three out of four want direct access to their EHRs, according to Xerox’s survey. This is not limited to Millennials, though: 71% of Gen Xers, 57% of Boomers, and 53% of the Greatest Generation want online access to their health information.

The industry as a whole has been slow to respond to this demand for many reasons: technical, security, cultural, legal, etc. Some are valid challenges, however, many are related to historical resistance to patients having access. If the industry is going to place greater accountability on individuals to manage their own health, conditions and disease, then we need to arm them with access to their own information to do so.

Additionally, the majority of respondents across all generations in the Xerox survey would like their pharmacists, healthcare providers, and health insurance providers to be more connected regarding their health. There are several ways payers, providers, and pharmacists can work better together to benefit the patient, including aligning around a few specific goals and clearly defining the roles of each player. For example, health insurance providers should educate participants about the services available to them and ensure they truly understand their benefits. 

Millennials will continue to voice their opinions about healthcare and drive change in the industry, and as Generation Z enters the workforce and becomes more aware of their healthcare spending and decisions, we expect them to raise their voice as well.

It’s more important than ever for payers and providers to be aware of generational preferences, expectations, and behaviors around healthcare so we can transform the system to work for the individual, instead of making them work harder to maintain and improve their health.

Kelly Rakowski is senior vice president for healthcare payer services at Xerox.