Given the legislative landscape, it’s no surprise that healthcare consumer engagement, which we define as consumer tools for the purchasing or selection of healthcare services or health insurance, has consistently been in the top 6 categories for digital health funding. The underlying cost shift that is turning patients into savvy-consumers is especially noteworthy. Beginning on January 1, 2014, the Patient Protection and Affordable Care Act mandated individuals to maintain minimum essential coverage each month or pay a penalty. And thanks to the ACA, 16.4 million previously uninsured Americans now have coverage. The health insurance exchanges and expansion of Medicaid to people who earned up to 138% of the federal poverty level were essential drivers of this drop of uninsured Americans.
85% of enrollees from the individual marketplace selected a high deductible health plan
Being insured comes at a price—and it looks like individual consumers will be paying it. In 2013, out-of-pocket expenses grew 3.2% to account for 12% of national health spending, and this number is only expected to continue to rise with the abundance of high deductible health plans (HDHPs). Eighty-five percent of enrollees from the individual marketplace selected a HDHP. Individual plans with a deductible of at least $1,250 or a family policy with a deductible of at least $2,500 are considered HDHPs. This means an individual consumer is responsible for paying $1,250 out-of-pocket before insurance coverage kicks in. Given this cost sharing, there has been a significant change in purchasing behavior. Over 50% of the individuals who purchased insurance on Healthcare.gov this past year “shopped” around before purchasing their health insurance plan. Individuals are no longer passively receiving treatment and information from the healthcare system, and instead are incentivized to become actively engaged in decision-making processes. This may be a scary change for many patients, but the shift creates much needed tailwind to push healthcare up with the rest of the consumer-facing industries.
As individuals become accustomed to being responsible for out-of-pocket healthcare expenses, digital health companies can take advantage of the trend towards consumerism to educate and empower patients to make smarter purchasing decisions.