"Health Consumers" and the hype cycle

IBM calls 2007, "The Year of the Omni Consumer."

In the area of health, IBM points to consumers' eroding trust in food safety. However, in its press release on the Omni Consumer, health care is not a major feature.

The IBM analysts are smart (or lucky). If this is an oversight, then it's providence; if it's an explicit omission, it's spot-on.

In my work and research, I remain unconvinced that Americans are truly behaving as health care consumers. Nor do I believe they want to embrace that role...yet. Notwithstanding the pronouncements of Ivy League professors in business bestsellers and human resource consultants, we may be on the road to consumerism in health care. But in the Trip-Tik, we're on page 2.

It's not that consumers don't like to shop; do we, ever, as IBM's analysis points out. Two key areas that will help support consumer-directed health are the facts that: (1) consumers are increasingly interested in doing it for themselves, as IBM points to the growing use of self-service technologies; and, (2) Internet and social networks are influencing buying decisions. We're in the pioneering phase of the latter in health, but a passionate group of patients and health advocates are doing some amazing things. Still, it's early days (Trip-Tik, page 4 for those "consumers").

A third aspect of IBM's research speaks generally to insurers failing to connect with patients. It appears that this data point relates more to property and casualty than to health insurance, but I'll go out on a very short limb to observe that health plans still have a long way to go to becoming beloved vendors to consumers.

I'll use Gartner's Hype Cycle to explain my take on the current status of consumer-driven health (CDH).

1. Technology Trigger

The first phase of a Hype Cycle that generates significant press and interest.

Signposts: Regina Herzlinger's book, Consumer-Driven Health Care, is published. Employee benefits consultants' new CDH product designs emerge.

We are now between phases (2) and (3), as follows:

2. Peak of Inflated Expectations

Phase 2 of the Cycle features over-enthusiasm and unrealistic expectations. Many failures occur.

Signposts: Consumers who have signed on to CDHPs get it wrong, and negative word-of-mouth spreads.

3. Trough of Disillusionment

In Phase 3, we enter this trough because the promises of the new product exceed what's actually experienced.

Signposts: Sicko. A plurality of consumers sign up for PPOs in enrollment season. Consumers flounder and diss high co-pays, often remaining uncompliant with physician and plan health advice. Consumers feature their experiences on YouTube and share personal stories in blogs.

4. Slope of Enlightenment

Some consumer directed health business work through the negative trough and emerge, applying learnings to the CDH concept and demonstrating proof-of-concept.

Future signposts, if they come to pass: Market penetration of consumer-driven plans (the real ones) reaches 40% of the market. Plan sponsors offer useful, integrative (and perhaps even fun!) health and financial management tools that consumers like and adopt.

5. Plateau of Productivity

This conclusion of the Hype Cycle finds that benefits of the new product are "demonstrated and accepted." The product matures.

Future signposts, if they come to pass: Consumers fill and take prescription drugs and adopt health regimens as counseled. Diabesity rates in the U.S. decline to under 20% of the population. Physicians and consumers freely email.

Health Populi's Hot Points: At this point in the consumer-directed health care Hype Cycle, it's important to realistically segment Americans into true health care consumers, consumers-lite, and committed couch potatoes. There are obviously terrific segmentation tools in the marketplace, and vendors to the industry should use these. But keep in my the hype versus the real.