Healthcare Consumers Vs Other Consumers

Healthcare is quite an unique industry, as are it’s consumers. Healthcare consumers share similarities with consumers within other industries, but also considerable differences that healthcare marketers must acknowledge.

Similarities

Although healthcare consumers have various unique characteristics from those within other industries, healthcare consumers also share various similarities.

Discretion

Many healthcare services are elective (i.e. laser eye surgery). Thus, consumers have the option to consider wants vs. needs and decide whether to pursue a service or not.

Demand

Healthcare consumers’ demand can be influenced by many factors such as price or type of treatment. For example, in retail, if the price of a high end product is cut by half, its demand would increase significantly as the lower price would attract buyers. This is considered as elastic demand.

Elasticity of demand is the measure of the change in demand of a product or service in relativity to the change in its price. If demand for a product or service increases or decreases based off of the increase or decrease in its price, then the product s considered to have an elastic demand. If the demand for a product or service is unaffected by the change in price, then the product is considered to be inelastic.
Payment for Services

Although in many cases when medical services are paid by third parties, many are paid out of pocket by the consumer. Whether a consumer has an insurance policy that includes a high deductible or co-insurance responsibility, or a consumer is self pay and is solely responsible the payment of services, consumers’ ability to pay for services greatly influences their demand for them, even if they are medically necessary.

For elective services that are not considered medical necessary, consumers usually have to pay for the service mostly out of pocket, which will certainly affect its demand. In a booming economy, demand for such services would increase, as in a slumping economy demand would decrease.

Differences

Lack of Buyer Discretion

Consumers in healthcare rarely determine their need for services, as consumers within other industries usually determine their need for products and services. Healthcare services, which are consumed by the patient, are usually ordered by a physician. This is unlike any other industry, as the patient is prescribed a service that they must comply with.

Knowledge of Price

One of the most prevalent differences between healthcare consumers and other consumers is that healthcare consumers’ costs are usually covered by third parties (insurance). Because third party payers pay for most of a patient’s medical services, patients themselves are not usually involved in or even aware of the price of service. Patients rarely even have access to pricing information for services.

Evaluating Quality of Service

Most healthcare consumers do not experience the healthcare system until they have a need for services. Thus, when consumers evaluate services they receive, they form their opinions through subjective observations such customer service and the cleanliness of the facility. This is considerably different for consumers within other industries as they form their opinions about products through objective observations such as the quality of the product and the ease and effectiveness of its use.

Knowledge of Services

Healthcare consumers typically have limited knowledge regarding the services they are to receive, as other consumers are usually well informed about the products and services they are pursuing. Most consumers in other industries seek as much information about products to compare one from another.

Because of this, healthcare consumers usually lack the ability to evaluate the quality of service they receive, as other consumers very well can evaluate the quality of the product or service they receive.

Why Is Healthcare Facility Construction So Expensive?

Healthcare cost in the United States continues to rise at an alarming rate. With the aging baby boomer population, the impact of the Patient Protection and Affordable Care Act and current economic climate attempting to understand and control these costs has become more important than ever. One aspect of healthcare cost that always seems to cause confusion and even frustration is healthcare facility construction. Why is healthcare facility construction so expensive?

Many medical facilities house patients who are receiving critical services. Because of the critical nature of these services the individual patient may not be able to adequately care for themselves in fire, emergency or other threatening situation. As we will see, many of the systems and features in healthcare buildings are designed and installed in such a way as to protect the patients who may be incapacitated or compromised. The easiest way to demonstrate this and why healthcare facility construction is so expensive is to take a virtual a tour. With a tour, we can demonstrate and identify the unique features and inherent cost of a typical healthcare facility, many of which are designed to protect the patient user.

Let’s start our tour at the main entrance. Often, you can pull the car, van or ambulance right up to the front entrance under a large canopy or the porte cochere. This canopy or porte cochere is typically equipped with sprinklers, special lighting and designed for the loading and unloading of the handicapped. For medical buildings, there are often two porte cochere, one for the general public and one for patient transfers. If we take a moment to walk around the building, before going inside we might also notice windows enveloping each floor (windows for each patient room), extra wide sidewalks, multiple handicapped parking spaces and access points, handicap van or ambulance throughway and parking and covered or reserved parking for physicians. In addition, we might find an oxygen tank and other medical gases for delivery of these gases to patient room or surgery suites. Medical gases delivered to patient rooms and or surgery suites are a very unique feature almost exclusive to medical facilities.

If we continue our walk around the building we might see the HVAC system. A healthcare oriented HVAC system must deliver specially, filtered and controlled air and do so evenly though out the entire building. As we pointed out earlier, we are often dealing with incapacitated or compromised patients who may be weak, in pain or physically handicapped. Fundamental patient comfort like, clean, controlled, even air flow must be a non-issue in healthcare facilities. Finally, the outside tour of the building might reveal a generator. A generator can be used to power emergency backup and certain life safety systems. These generators are often housed in large, separate structures and can have a material impact on overall building cost.

As we approach the main entrance the building signage may indicate the facility is operated on a 24 hour, 7 days a week basis. The 24/7 nature of the building coupled with the safety concerns of incapacitated or compromised patients is very important in relation to hidden costs and features associated with healthcare facility construction. Almost all MEP systems (mechanical, electrical and plumbing) in a healthcare building will be oversized and or redundant. The oversized or redundant nature of these systems allows for part of the system to be worked on while the rest of the system continues to function. Healthcare facility HVAC air handlers for example, are often larger than typically required to achieve higher static pressures and the required air flow capacities mentioned earlier. Oversized or redundant systems are a common theme in medical building construction and significant contributing feature to the expensive nature of the facility.

Once inside the building we will find a fire or emergency control panel. The panel for fire and emergency systems for many commercial buildings, including healthcare are often found just inside the main door. This placement helps facilitate action by appropriate personnel when alarm sounds or disaster strikes. However, healthcare oriented fire and emergency control systems often build-in unique or special features. The systems are often more flexible, allowing for multiple choices and options. Options such as evacuation notice or warning, barrier control, zone by zone evaluation, general or isolated announcements and lock down.

As we step into the main lobby there are likely to be two elevators types, one for public use and one for transporting patients. A patient designed elevator must accommodate a gurney or stretcher and often opens to the front and the back. Since patient elevators open to the front and the back, space needs are greater than a typical passenger elevator. Exit corridors off the patient elevator to the patient oriented porte cochere are common in healthcare facilities. In a well designed, well operated, medical building you will rarely see a patient rolled out on a stretcher through a main lobby or public hallway. As we stand in the main lobby and look up or down we might also see safety lighting features, special ceiling tiles, and large number of sprinkler heads, specially designed flooring and even bacterial resistant window coverings.

If we could look behind the walls or beneath the floor we are likely to find significantly greater plumbing requirements, increased fire wall separation, reinforced foundation and sophisticated monitoring or tracking systems. Often the hallways themselves will be much wider than typical office building and handrails may be installed. Of course, you are likely to continue to find; safety lighting, increase sprinkler heads, special ceiling tiles and safety flooring. We can’t go much further into the building without getting into specific tenant needs but you are likely to find features unique to medical facilities. Features such as telemetry, sophisticated call systems, biometric or customized security systems, and exotic tracking features. There are also more practical issues and needs that must be addressed in medical tenant space such as; special air filtering and exhaust, infectious waste disposal, unique storage issues, family meeting and grieving areas and even chapels.

There are many other special features and systems in healthcare facilities. However, there is at least one remaining material issue that clearly adds cost. All of the special, unique or important systems and features are expected to be transparent to the patient, their family and visitors. In today’s healthcare environment, the patient and family expect and even assume the facility will be state of the art but user friendly, convenient and comfortable!

Healthcare IT: The Deal With It and the Possibilities

As time goes on, more and more people are becoming particular about healthcare. Well, this is to be expected. If you look at everything that has been going on, there is always the potential for new diseases to develop and strike lingering around. Even genetically modifying crops has a bad result on our health despite allowing for less loss of said crop to hazards such as pests. With all these problems arising, a better system for healthcare delivery, and of course much more affordable, should be established. What many people have their eyes on now is healthcare IT, something which could do just that.

There are, however, problems that may arise through the implementation of healthcare IT within all healthcare providers. One such problem may be the experience of making less profit from their patients as the stay within the healthcare facility would be of less time. One other problem is that those that want to implement healthcare IT into their facilities will have to pay a large cost to do, something which only adds up to the problem with making less of a profit from patients. But if you take a good look at it, making less of a profit wouldn’t be much to worry about if the provision of better healthcare services is established. However, for the healthcare facilities in question, they would need ways to cut costs when it comes to all their needed medical supplies.

Due to this, there may be an influx of companies that will begin to market in the healthcare industry. This possibility could be viewed as something like an answer to helping healthcare facilities with having all that they need at better prices and with the provision of better service. After all, there is a lot of competition when it comes to service providers and a lot of them provide better service at varying prices, some being relatively less than the other but with also better performance. Aside from being able to bring the healthcare field better service and a lower cost for it, perhaps it can be viewed as a way to make more sales for these companies. Healthcare services are of course quite important, and if these facilities face making less profit from their patients, then they may have to think about switching their providers for certain services.

Though if you look at the big picture, it may all even out in due time. Healthcare facilities may face less gains than before but in due time, we may be able to say that they will adapt to it, as did all other businesses during the time of the economic slow down. For the provision of better and more efficient healthcare services, it really would be a small price to pay. Healthcare IT may just be the way to go if we are to achieve a better field of healthcare that is prone to making less errors and providing better and faster service, also one that saves more lives. And with all the chances for marketing their products and services within the healthcare industry, companies can add to creating a better healthcare field.