Moderator: Welcome to another addition of Deloitte Insights, a production of Deloitte LLP. Deloitte Insights is an audio newsmagazine that looks at important business issues. Today’s program; Embracing Disruption: How Consumers Are Transforming the U.S. Health Care System.

If the U.S. health care system is in crisis, and just try to find someone who says it isn’t, and it’s going to be fixed, any solution will have to take into account the attitudes and behavior of the people the system is supposed to serve in the first place. Forget about the old stereotype of the passive patient who sits on an examining table and says little more to the doctor than “uh-huh.” Think instead of consumer activists who are searching for quality care and are willing to go outside the traditional health care system to get it. And, thanks largely to the Internet, they have more information at their fingertips and are more inclined to regard their doctors as coaches rather than as decision makers. But just as in any retail market, different consumers want and expect different things. Some consumers, for example, are perfectly content with their physicians and health plans while others are constantly switching physicians and treatments. Then there are consumers who don’t consume at all. They seldom see doctors and don’t buy health insurance either because they can’t afford it or because they feel they don’t need it. And a growing number of consumers are shunning conventional medicine all together in favor of alternative treatments. At the same time many of those who do remain in the system are skeptical of the traditional doctor-directed model of health care.

So if you want to know why retail health clinics are gaining in popularity or why people are relying more on self monitoring devices at home and becoming medical tourists abroad, give credit where credit is due: to the American consumers.

Here today to give us their diagnosis of the state of the U.S. health care system from the perspective of the consumers who rely on it are Paul Keckley, executive director of the Deloitte Center for Health Solutions for Deloitte LLP, and Bill Copeland, national managing director of the Life Sciences and Health Care practice for Deloitte Consulting LLP, coauthors of the Executive Summary of the 2008 Survey of Healthcare Consumers.

Welcome to Deloitte Insights.

Paul Keckley: Thank you. Good to be here.

Bill Copeland: It’s very nice to be here.

Moderator: There are a number of myths about the consumer’s role in health care. Could you tell us what these myths are and why it’s so important to debunk them?

Paul Keckley: I think one of the major myths is that this is a health system that revolves around patients. Patients who are inactive, who are incapable of making judgments about their health care, their treatments, their pricing and the kind of service they want. I think this study clearly suggests that consumers will exercise and act on their decisions. I think that’s a formidable challenge for the industry to come to grips [with]: that it’s a consumer market.

Bill Copeland: Paul, that’s kind of scary. I think too [that for] a lot of the key players, that consumers' behavior is going to become very evident in health care. If you think about some of the major attitudes of consumers that we found, some of those attitudes are in stark contrast to what the assumptions are around what a patient really wants and what a patient really needs.

Paul Keckley: So the myths that came out of this study really kind of fall from that beginning point, which is we concluded [that] it is a consumer market, not just a patient market. The last statement in the study, Bill, is they are neither patients nor patient; they are consumers. And that carries a lot of impact if you really think through that.

Bill Copeland: And if you think about any service that we really buy today, health care is no different. So they shop, they look for quality, they’re looking for trade-offs between cost and services. They’re looking for convenience. They’re looking for ways to extend what they bought and they definitely appreciate the differences in what’s out in the market.

Paul Keckley: Well, let me mention two other quick myths. One is that somehow all of the services they get are roughly the same, that there’s not a lot of difference in quality and not a lot of difference in price; that’s a myth. Consumers see big differences in how health plans perform, how doctors perform, how hospitals perform, even differences in the medications that they take. So they do compare and they see distinctions.

A second myth is that somehow anything about their health care is the domain of their doctor and anything about their health insurance is the domain of their health plan. A theme that came out of this strongly is that the trusted source, the provider of the tools to help them make judgments, is up for grabs. Doctors aren’t doing a good job providing that information. Health plans have an opportunity to help make decisions for consumers about their treatments not just about their insurance. The myth is that somehow, some way you just simply let the doctor tell you what you need clinically and you let a health plan tell you what’s covered and that’s it. That’s a myth.

Bill Copeland: It was surprising, Paul, don’t you think that health plans came out fairly close to being the same kind of trusted source as physicians and hospitals? Not as much so, but clearly it’s not the kind of bashing that you see health plans take in the press every day that they’re providing terrible service. That really wasn’t the case.

Paul Keckley: So a theme we had is, the trusted source is up for grabs.

Moderator: So people who need health care no longer think of themselves as patients but as consumers. What accounts for this dramatic change in attitude?

Bill Copeland: Well, the biggest reason is people are now paying for services that they didn’t have to pay for before and employers are trying to manage their own costs by pushing more of the responsibility onto the consumer. So all of a sudden you have responsibility that you didn’t have before financially that clearly has to come with a trade-off and the trade-off is they have more choices now.

Paul Keckley: Yeah. And the economics are important. The fastest growing expense in the household budget is health care. You can’t turn on the television without seeing ads for pharmaceuticals, for devices, and everyone is becoming more conscious of an environment in which health care is a major factor – greening. So health care has a ubiquitous impact on our culture and the fact that now people are having to pay for the service they get is going to make this even more important as an issue at the dinner table at night and on the tube as you watch the news.

Moderator: We know that consumers aren’t homogenous in the way they think about or seek health care. Could you discuss the attitudes and habits that distinguish the different segments of health care consumers? 

Paul Keckley: Well, with 3,000 plus adults in the sample we identified six discrete segments of the market, and without getting too complicated, two of those six tended to lean toward conventional ways of getting care. Three of those six segments tended to lean toward innovations or other ways of getting their care. And the sixth segment representing about 28 percent of this market are kind of out in the grandstand watching and waiting; they’re spectators. The key here is one size doesn’t fit all. To say it’s a consumer market doesn’t mean every consumer looks at quality, price and service the same. And it’s not simply predicted by their health status, by how good they feel or whether they have a condition or even their insurance status. It’s really a complicated, complex, fragmented market where segmentation is key. You have to understand what people need, what they want, what they buy, and it’s not one size fits all.

Bill Copeland: And that’s a basic component of health care that we actually don’t understand very much about. Consumer product companies study this very detailed and know a lot about why people buy dog food or toilet paper. Yet health care, which is so important to us, we really don’t understand this segmentation at all.

Moderator: What will that do for hospitals, providers and life sciences companies?

Paul Keckley: Well, I came from the traditional world of academic medicine and you treat signs and symptoms in people based on the condition they have. Now I have to start thinking about how they pay, what they want, whether they’re using nonconventional methods in their own care. It makes my job tougher. It makes me have to be smarter. It means that the triggers to your own behavior are going to differ from person to person. I think that’s not anything health care people understand.

Bill Copeland: One size fits all is not going to work going forward.

Paul Keckley: Not at all. I think that in combination with up for grabs who the trusted source will be to help you navigate is both opportunity and threat. It’s a huge opportunity for the key players. It’s also a threat if new types of players that understand consumers better than maybe we insiders have start finding better ways to do that.

Bill Copeland: For health plans I think it means that they’re going to have to customize their products or offer people the opportunity to customize what they want.

Paul Keckley: A theme, as you know, comes out of the study, is mass customization. That people want their products, they want their plan to cover the things that they want and they want the doctors and hospitals that they want. Instead of prepackaging everything you start to think maybe we’re “a la carting,” maybe we’re putting things out there and you cherry pick a menu and you construct your own insurance product. Maybe with a doctor’s office you construct your own way of getting care from the doctor. That’s not the way we’re organized.

Bill Copeland: You mean by e-mail?

Paul Keckley: Well, it could be. Interesting that consumers have no problem with it. It’s the doctors that seem to have the problem with it. So, yeah.

Bill Copeland: We’re so used to getting what we want in our cars, in our television sets, in our insurance policies and how we access advisors for financial services, why wouldn’t we want the same thing in health care?

Paul Keckley: Well, there’s clearly – somebody’s figured that out. You’ve got almost $5 billion being spent directly in television ads about pharmaceuticals and devices. Somebody knows that consumers are acting on this information and the study says the consumers think this is ridiculous that I can’t do these things already. Why can’t I schedule an appointment with my doctor online? Why can’t I get my lab report online? Why do I have to go to the doctor to get a prescription filled? And you don’t do a physical exam – they’re sitting there going, duh!  We have all kinds of reasons not to do it except that it’s inconsistent with a consumer market. So, big change.

Moderator: How do consumers decide which physicians and hospitals they should choose? And is the way they’re making their decisions most likely to lead to their getting quality care? 

Bill Copeland: Well, I think that’s a very important question that will evolve over time. The survey says that people rely on friends and family and trusted sources that they know and they rely on their personal relationship with their physician to help them through that. But we could see in the survey that that’s changing. Clearly people are shopping online, they’re looking for data, they’re going to anyplace they think they can get some information. And using that to validate and check and recheck what they think might be a good decision. But because there’s really a lack of tools and information that help the consumers I think there’s still an opening for somebody, something to come in and really help consumers do a much better job around making good decisions.

Paul Keckley: Right. And the way these tools have to be constructed, they have to personal. It needs to be for the need I have. Here’s how good this particular option is and here’s how much it will cost me. Again, mass customization; it’s about me and my needs. I need to be able to know what I can expect and how much it’s going to cost and how then I can access that. That’s not a model that our health system is comfortable providing. So, yeah, friends and family, that’s always going to be a factor, but now overlay that with tools that let you know based on data; fact how good it is and how much it will cost.

There’s an amazing thing happening around transparency that suddenly people are noticing that I can get a report card on a doctor the way I could on the automobile I’m thinking about purchasing or that hospitals – I can go to a Web site and find out whether the hospital does a good job with heart disease or does a good job with hip replacement. So that’s a consumer market. Wow, imagine how we would behave if in advance of or immediately after an interaction with the health system, with a doctor, with a hospital, I could know that I was dealing with the one who got the best outcome and I knew what it was going to cost me. That’s huge.

Bill Copeland: Surprising to us was two-thirds of the people would go travel away from their community to get health care if they thought they could get better quality and lower cost, two-thirds.

Paul Keckley: Right.

Moderator: While most consumers say that they're reasonably satisfied with their doctors, there’s also a significant gap between the services they expect from doctors and what they currently receive from them. Could you explain this apparent paradox?

Paul Keckley: Well, Bill and I have had a lot of discussions around this gap between what consumers expect and want from their physician and what they get. I think there are two rationales for why all these tools aren’t available, why you can’t go to a doctor's office and they direct you to a site that is free of commercials to know more about your condition or why you can’t schedule appointments or get your scripts filled and even in some cases group visits, cyber visits, electronic visits that don’t require you to show up in the doctor’s office.

One is doctors maintain that they’re fearful that they could be sued if information cuts across the Internet and information violates privacy, that’s one. Two, the payment system. The structure of incentives right now is to get more, more volume, more visits instead of getting maybe the best results. You’ve got both of those going on. The incentive part – the plans are moving this direction maybe faster than the doctors are.

Bill Copeland: I think that the physicians and the hospitals have under-invested in that technology. So it’s sometimes hard for them to provide some of the services that people are looking for and, in fact, the survey said people are willing to pay more money for a same day visit. That makes sense because convenience has a premium to it. But we have to figure out a way to line the incentives of the health plan and the provider so there is an incentive to invest in the technology. There is a way to get paid for some of these convenience items and there is a way to work together as trading partners that can be a lot more effective than what we have today.

Moderator: How popular are alternative services and treatments with consumers? Do many consumers make use of both alternative and conventional health treatments? 

Paul Keckley: Well, even the terminology becomes kind of intriguing. It’s referred to in some settings as complementary; in alternative medicine or in academic settings now they call it integrative health. So kind of holistic medicine in tandem with the way our U.S. system is built, which is allopathic.

How popular is it?  In our survey about a fourth of these folks are active users of complementary or alternative methods of care. There’s huge interest, especially among commercially insured, educated folks who think that there’s something perhaps missing in traditional medicine that naturopathic approaches, holistic approaches would solve. And there are other studies that have verified that it’s fast growing, that the population is looking at conventional medicine and saying, maybe we’re too dependant on pills and surgeries and not as dependent on other methods of care. So in this survey we found huge interests across many of our segments, across many of the generational gaps even as you would expect younger people but even some middle-aged and older people.

Bill Copeland: What I think is fascinating, Paul, about this whole topic is when we ask in the survey whether people believe that physicians should follow evidence-based medicine, only 42 percent said yes. The rest said maybe or no. So there’s a big question in their minds as to how effective some of the care is that we say is the standard today.

Paul Keckley: While you bring up evidence-based medicine, most consumers don’t understand that concept. They presume that the care that they’re getting is the care that they should be getting. That’s problem one. So back to our discussion, transparency, performance, what if you found out your doctor doesn’t practice the best practice?  He’s not going to get the best outcome because he’s behind.

The survey also asked, do you think we ought to align incentives for physicians with adherence to the evidence, and 85 percent said yes, duh. It ought to get doctors who are doing right things and pay them more than the doctors that don’t do right things who get paid less. So this is part of a really interesting policy discussion in this country, which will attract consumer attention. What if you find out that your doctor is not practicing the current state of the art in a particular area? What do you do with that? And what happens if you saw a doctor before who took you in a direction that you shouldn’t have gone to start with?

Bill Copeland: Well, you know life science companies and medical device companies would say that if they have a product that doesn’t work they get a lot of bad press and their product is pulled off the marketplace. We just don’t look at it that way. It’s still very much a judgment call, which is, I think, why the consumers are now needing more information.

Paul Keckley: Well, this is the cool thing about the study. You’ve got 125 schools of medicine pumping out these doctors. And the presumption in the population that’s still pretty strong is every doctor is pretty good, every doctor practices about the same way, and I’m going to get about the same outcome for this condition regardless of where I go, unless it’s a really serious thing then maybe I have to go to a certain place. The study says, yeah, that may have been the case and a lot of people may think that way, but it’s changing and people know there are differences and there are going to be increased efforts to give consumers explicit data on the performance of the doctor, around a particular condition. What that’s going to show is that doctors don’t get the same results. Doctors don’t practice consistently. The age old comparison was if you took your car to three or four repair shops and told them what you thought the problem was, you’d get three or four different diagnoses, three or four different bills. They’re going to find out that if you take your same set of signs and symptoms to three or four doctors, you’ve had the same result.

The thing is we didn’t go to the second or third or fourth doctor. We stayed with the doctor we liked because they’re affable, they’re approachable. We don’t want to go through the hassle of filling out all those forms and all of a sudden you find out maybe somebody does it better. That’s the new era of consumerism. I think that changes the game bigtime.

Moderator: Which sources are consumers consulting to obtain credible information about their health care? Do they rely mostly on their friends and family, their physicians, their insurance plan, the Internet or their health plan providers?

Paul Keckley: Well, we know that friends and family are always going to be an important source. We know they’re going to Web-based resources, especially general search engines, to find information. We know it’s – it occurs in teachable moments. So after you’re diagnosed there’s typically a search process especially where fear is a factor in the diagnosis. If I know I’ve got a potential problem or increasingly it’s going to cost me a lot if I go a certain route, then I’m going to study for my own well-being and the Web is the source of those tools.

Now, here’s the disconnect again. They’re not being directed to those sites by doctors and hospitals, so they’re having to search for themselves, and what the survey shows is that people want it. They want it when they want the doctor diagnoses, when they’re in the hospital. And that’s this “up for grabs” theme again. There’s huge opportunity for plans, hospitals and doctors to be the trusted source, to help you navigate, and it’s missing.

Bill Copeland: Even 65 percent of the people on our survey said they wanted a nurse to call that they could talk to about some of their problems and they’re willing to pay for it; almost 20 percent said they’d be willing to pay for it.

Paul Keckley: And if you ask doctors about that they’d say, well, who’s going to pay me for that nurse to make that call? So there again is the alignment of incentives to get right results.

Bill Copeland: The other thing, Paul, that’s fascinating is that some needs are completely unmet, like financial. Only 7 percent of our consumers said they were financially prepared to deal with their health care costs in the future.

Paul Keckley: This is a huge finding of the survey because that sense of insecurity about health cost cut across all insurance groups. That’s people with insurance who are saying, I’m really not sure. So it’s an irony when you think about an industry that’s the biggest chunk of our GDP [gross domestic product] and is the fastest-growing expense in the household pocketbook and in the federal budget, that we’re looking at that going, wow, I’m not sure what I can do as individuals, and am I faced down the road with, I guess I need to keep my car another two years because I think my health care exposure expense is going to be such that I can’t afford a new car? That’s not the history of health care in this country. We’ve kind of sheltered people from cost and they’ve been about doing their household goods. Now it’s a big factor in the household budget.

Bill Copeland: I think it’s scary. Otherwise we wouldn’t have 7 percent saying they’re nervous about what this could mean to them financially, because if they thought that their employer or the government was going to take care of them, I’m sure that much more people would feel more comfortable.

Paul Keckley: The staggering figure was 9 out of 10 saying, I’m really not sure. I’m not really secure in knowing what it’s going to cost. 9 out of 10.

Moderator: As you mentioned, one size doesn’t fit all where health care is concerned. Consumers want their health care to be personalized and customized to meet their needs. How does this work in practice? And can the health care system deliver such personalized and customized service?

Bill Copeland: I think that’s going to be a challenge for the health care system. I think the one area that can respond the fastest might be the health plans where they can create products and services that can offer both low cost as well as high service and higher cost. In our survey, for instance, two out of three consumers said they’d be willing to trade a restricted network in a very well-controlled disease or case management program in exchange for financial benefits, lower copays, lower premiums, so forth. So people are making a trade-off. And I’m sure they would make a trade-off with services and trade-offs with benefits, not buying all the benefits that might be included in a typical package, having a higher deductible. Those are things that I think health plans can do if we can get the regulators on board and allow them to sell more stripped-down products so that people are not buying things that they know they’re not going to need. But for the providers in the life science companies, Paul, that’s much more of a challenge.

Paul Keckley: Well, when we’re training folks through the system, again, we start with science and symptoms and we make a differential diagnosis and it’s one size fits all. Think about how brainless it is to go in and fill out a form and check the boxes, have you had heart disease, have your parents had – when we could do that in advance at the visit. Think about all the information that we don’t capture because you have to come up with the answer on the spot, even things like your use of supplements, your use of nutraceuticals, your use of various exercise regimenx. Are you in yoga? Are you doing things that are holistic? Which most doctors don’t have a clue what people are doing. We’re not even to the starting line of thinking about the needs and preferences of patients. We’re still thinking about them as patients where you do a physical exam, you get a lab test, you make a judgment and you tell people what to do. That is a huge gap between a patient orientation and a consumer orientation. It’s going to require investment and tools. It’s simply not achievable unless people adopt tools. Most people in the worlds of doctors and hospitals are afraid of these tools. So [we have] a long way to go.

Moderator: Health care is a hot button issue in the presidential election campaign. Is any consensus developing among consumers about how to pay for health insurance and what can be done to cover the uninsured?

Bill Copeland: I think the issue gets everybody’s blood pressure up and it’s certainly something that every candidate could use to stir some excitement about what the possibility of change might be, but most people are not willing to pay for what it’s going to take to cover the uninsured. And I think most people are not willing to change the system dramatically enough yet to really align all these incentives and try to fix some of these structural issues that we have in the health care delivery system. So it’s, yeah, I need to get it fixed but don’t change my life.

Paul Keckley: When you hear about “universal care,” everybody’s for it. When you hear, “maybe we have to pay for it [in] different ways,” people get a little frightened…there’s no consensus. Our survey really points to, people recognize it’s a problem but the solution is not clear.

Moderator: Consumers are embracing innovations that are disruptive to stakeholders providing traditional health services and health plans. Could you talk about disruptive innovations such as retail medical clinics, self monitoring devices and medical tourism and explain why they’re gaining in popularity? And please explain why disruption is positive and not something to be afraid of.

Paul Keckley: Well, to begin, disruption is probably positive if you’re an innovator; and if you’re really comfortable with the status quo it’s probably uncomfortable. For example, the study suggested that folks are very receptive to having devices in their home that would allow them to communicate with their doctor and on a real time basis provide information about their blood pressure and their vital signs. We saw huge receptivity to retail clinics especially among commercially insured folks who use clinics for convenience, not to save money. We saw receptivity to medical tourism going across state lines or going out of the country for services they were assured were of the same quality and they can save money.

So what’s a common thread? The value proposition. People have different value propositions and they act on that. So either for savings or for convenience or for better quality or some combination of those, consumers appear prepared to act on what they think are good options for them. So again back to a theme. Disruptive innovation is only disruptive to those [who] are really complacent or confident that the status quo is meeting the need. Our survey strongly suggests consumers want more.

This is one of the other themes along with mass customization and up for grabs that came out of the study, and that’s that substantial numbers of consumers see gaps in the system – how doctors provide services, hospitals provide services, even the personalization of the tools that health plans provide. And they’re trying new ways of getting what they consider is their own solution. So retail clinics, to our surprise it’s not about safety, it’s not about price, it’s about convenience. They are there because they can get in and because they think using EMR [electronic medical records], the care is better. Medical tourism, receptive, because I can save some money and because I know the quality is as good if not better than what I get now.

Nonconventional therapies, I’m not so sure I can’t get better care on my own. We found in the study almost 1 out of 7 people were willfully changing what the doctor told them to do to go a different route of treatment based on their own study.

So why is it disruptive? Again, contrast between a consumer orientation and a patient orientation. If you’re in our system, you’ve been accustomed to a model which you go to the doctor when there’s a problem. It may be self inflicted but there’s a problem. The doctor tells you what to do. The insurance company gets a bill from the doctor and everybody goes along to get along.

Consumer orientation, consumer goes to the doctor having done some prework. They have a sense of what the options are. The doctor tells them something. They check that doctor's credentials. They go home at the teachable moment and they know there are three treatment options and the doctors pick the best one and here’s what it’s going to cost. The health plan, the doctor and the consumer are aligned in that transaction. That’s just a different model. We’re not accustomed to it.

Bill Copeland: There could be, Paul, at some point a couple of things that could happen that could dramatically disrupt our health care model. Certainly universal coverage or expansion of our public programs could be one. Changing our tax code and making it a retail market could be one. Or something like mandating that everybody have an electronic health record.

Paul Keckley: But the thread you’re coursing there is money. It gets people’s attention if we start talking about money. What you pay out of your pocket and how you figure all that out so tax codes and all those other things – that’s key in this whole discussion, separating clinical decisions and price has been the way we’ve grown up in our system. Clinical stuff is one thing, dollars is something else.

Bill Copeland: Let’s talk about the electronic record for a second because that gets a lot of attention from a lot of people. We know more about our cars because there’s a database on what happens to every car than we do about our bodies. We have a way to track down all kinds of things that we own property-wise but we don’t have a way to track down what medications might be in conflict for somebody who’s in a long stint of care. Why isn’t the value proposition of the electronic record so clear to people, Paul? 

Paul Keckley: Well, because people are still in that patient orientation, not the majority are in this consumer model yet. So the data says that use of an electronic medical record improves the accuracy of the diagnosis, the appropriateness of the intervention and avoidance of complications and sub-optimal outcomes. That’s pretty good. That’s a tri-facta. That’s cool. So why don’t we go to doctors that only use EMRs, and unless they use it we don’t go because we haven’t thought that we should ask. And large numbers of people are still out here in the grandstand or they’re in that one segment we called content and compliant that are kind of going along to get along and they haven’t been activists. So I think that’s going to change. I think we found in the study there are segments of the population that are kind of listening for that, looking for that. Health plans are starting to create networks in products where if you’re going to be in our network you’re going to have to use an electronic medical record, period. And maybe they price that as one of those options, Bill, and they say, well, you can use some doctors that have an EMR, they’re on our platinum panel, or you can use doctors that don’t, they’re in our green panel, make your choice.

Bill Copeland: I think that disruption will bring innovation.

Paul Keckley: Absolutely.

Bill Copeland: And with that innovation we’ll hopefully bring a lot of change. We’ve just got to make sure that we allow the health care market both the financing and the delivery of care be not constrained by regulation or political compromise or special interest groups.

Moderator: What opportunities exist for health care companies to work together in new and different ways?

Bill Copeland: Well, I think our survey suggests that consumers are looking for a lot more from their physicians and hospitals and their health plans and their life science companies. And it doesn’t seem that any one particular sector or industry can solve this on their own. So it appears based on the survey data that they’re really asking for a new level of collaboration between these parties in order to solve some of their most basic needs. Because we have a health care system that the financing is a little different than directly related to the consumer we’ve got to work on this in a way that puts the pieces together and aligns the incentives.

I can think of lots of ways where certainly health plans can help providers automate some of the services consumers are looking for, reimburse them for some of the services consumers would like to get. For example, e-mail visits and same-day appointments and electronic records. I can see how providers can leverage some of the data that health plans have on evidence-based medicine and outcomes. So I think there’s so many opportunities. The question is, where do you start?

Paul Keckley: Yeah. And I remember the study, these themes that kept just hitting us between the eyes, mass customization. Give me what I need and give it to me in a way that I can use the information. Disruptive innovation, I am receptive to new ways of doing things. And third, up for grabs, the trusted source, the entity that helps me pull all this together, I’m receptive.

Now that means that the silos of health care are probably going to see their walls crumble. We’re going to see new types of convergence opportunities. We already see it. We see retail pharmacy daring to be in the business of primary care. We see large technology companies daring to be in the business of providing personal health records. We see banks daring to be the trusted source on how you spend your health care money. So I don’t think this chapter’s closed. I think this new system of care that’s built around consumers is ripe with opportunity for new models, new structures, new players coming together that heretofore wouldn’t have even thought to do that. I think that’s the exciting part of it. It’s also scary.

Bill Copeland: And the consumers seem to be voting with their feet because our survey said 3 out of 10 are going to change health plans and 4 out of 10 are going to change doctors, which is really surprising.

Paul Keckley: Well, some of the other studies in the industry suggest the U.S. system doesn’t hit a home run with its own. It’s not as if people are really, really satisfied. So they’re ready.

Moderator: So what do all these findings add up to? It’s clear that consumers are influencing the health care system in important ways. What do you think the implications are for providers, life sciences, health plans and the government?

Bill Copeland: I think the role of the government deserves a lot of discussion because working a system that’s going to be much more effective is going to take some government intervention. The question is, are we going to ask the government to solve the problem or just be part of the solution in helping us figure out how we might connect the pieces that we have today?  Because we do have parts that are working very, very well but the consumers are looking for things that obviously in part don’t exist and in part are a result of the system we’ve created like the nonadherence to medication. If you drive across the street and run a red light, you’re going to pay a ticket or certainly more if you hit somebody, but if you stop taking your medication for your diabetes and you go to the emergency room, you don’t have to pay any more for that than you would anything else. So there’s lots of things I think the government can do, but I think we haven’t really had that conversation at the right levels.

Paul Keckley: It’s interesting, health policy is still focused on a patient view of the system. Health policy thinks that individuals are just simply cogs in a wheel and it operates without their input and they’re pretty well patients. Policymakers that understand it’s a consumer market will find a whole new set of challenges. What kinds of tools does government provide for Medicare enrollees, Medicaid enrollees, workers' compensation, prison populations, SCHIP [State Children's Health Insurance Program]? How do you pay people differently who provide these services?  So the government role is huge. I think Bill’s right on.

And I think the second is employers are going to play a huge role in this discussion. We’ve kind of grown up in a system where employers kind of provided insurance and government covered the poor and the elderly and that was the way it worked. And now employers are saying the system’s not working for me. I’m going to change that game. So they’re encouraging consumerism.

And I think last, individuals, the fact that so many in this survey are saying I want these changes, I like disruptive innovation, I see it impacting my pocketbook. It could be a choice for me between another year of my used car or paying for a benefit that I know I need. I think we’re going to get a grassroots effort around health care consumerism. And it’s not as if someone has this figured out; it’s up for grabs.

Bill Copeland: The idea that we need to pull it all together is really a role that so far only government really could easily play because they could mandate standards and protocols around communication and rules and policies through Medicare around how you reimburse. But I don’t think we’ve actually thought of this as a problem that we need employers, life sciences, providers and health plans together in one room to actually come up with the remedy. We seem to be continuing to look at it in piece parts.

Paul Keckley: Yeah, and again, government thinks of a patient. Our policies are really around a patient orientation of the system and that’s inadequate. That doesn’t solve the problem. Data says the drivers of health costs to the system are self-inflicted. They’re lifestyle oriented. They’re things we do to ourselves. And yet for government to step back and say, well, poor you – now we’ve got to fix it and not engage consumers in self-care and play a role in what kinds of tools are provided in how things are charged in price. It’s a good time to be in health care.

Bill Copeland: And Paul, we might wind up with 50 different solutions if every state really takes us on and listens to their local constituents like we have today. We have a lot of different solutions.

Paul Keckley: Well, you’re really zeroed in on the federal role here. And if you think about Medicare as the basis for even how every doctor is paid for all patients the Federal government has a big stick and this may be a direction that it has to use it’s stick.

Bill Copeland: We’re not hearing that right now from any of the campaigns.

Paul Keckley: Well, I think yet to be determined.

Bill Copeland: I think the other thing is health plans clearly have a lot to do. Providers are not the only group that are not meeting some of the consumers' desires in unmet needs. Their abilities to provide new services and custom products and information and service and some basic help in navigating a very transactional health care system is something that health plans, I think, would be rewarded if they provide it to some of their subscribers. And that’s something that clearly subscribers would be willing to pay for.

And engaging health plans with providers in coming up with a reimbursement system that allows the providers to actually invest in the kind of technology that consumers need and to reimburse them for some of the services that are not just done in exam room, I think would be also ways that health plans can move the needle on making the system a lot more effective.

Paul Keckley: So all the key stakeholders are confronted with a pretty significant challenge. How do you deal with the consumer? A life science organization thinks through, is it direct to consumer or is it through the doctor or are there other vehicles? Doctors and hospitals have to struggle with incentives that are not aligned to doing the things that candidly they all want to do. They do want to address the needs of consumers in a correct way. And plans are in the middle of the crossfire, having to deal with the price and quality intersection in a way that’s pretty compelling. So I think for all of us this topic of consumerism is not a fad; this is a trend. It’s sticky. It’s not going away and it will change the way we operate in our respective part of the system.

Moderator: Thank you both for joining us today on Deloitte Insights.

Bill Copeland: Thank you very much.

Paul Keckley: Thank you.

Moderator: Visit www.deloitte.com to find the 2008 Survey of Healthcare Consumers, which served as the basis for today’s discussion as well as articles, newsletters and other information of interest.

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