Why healthcare organizations need a ‘flywheel’ to aid engagement

Consumers typically only interact with providers when they’re sick. To be more proactive and build relationships, providers need a new strategy.

Healthcare providers need to draw on the concept of the flywheel to engage patients on a frequent, relationship-enabled, basis.

As the nation’s economy ebbs and flows, consumer loyalty remains a consistent strategic priority that cuts across all industries, and healthcare is no exception.

Loyalty is essential for increasing consumer wallet share, lowering churn, increasing system capacity and reducing costs to reacquire consumers – these are all strategic priorities for health systems.  As more industries have become vertically integrated, loyalty programs have taken various shapes and sizes, but are all predicated on the same concept – the flywheel effect.

Healthcare, like other industries, needs to draw on a concept found in the realm of physics – a flywheel is a mechanical tool used to store rotational energy, thereby adding stability and increasing momentum. Put in business terms, a flywheel is the mechanism that drives consumers to a platform and keeps them coming back again and again. While a flywheel is hard to start, once it has been put into motion, it is difficult to stop.

The timing is ripe for healthcare systems to launch and operate successful flywheel programs to support increased engagement and ultimately drive better health outcomes. This will be critical for not only maintaining relevance against digital native disruptors, but also to support a transition to value-based care that propels providers beyond merely providing “sick care.”  

Examples outside of healthcare

Compelling examples of flywheels — often found where digital and physical worlds collide — can be found across industries.

Amazon. Prime is the center of Amazon’s flywheel. Amazon was able to kickstart their flywheel momentum with low prices and two-day shipping designed to attract customers and third-party sellers, but it quickly expanded the program into a full-fledged membership-based experience. Prime has been further curated to generate traffic to the platform and has expanded into new verticals, including movie production, music streaming, services and even prescription drug delivery.

Starbucks. Starbucks has built a program that began with capturing revenue upfront in the form of a gift card that has since been transformed into capturing droves of personalized consumer data. This platform has been leveraged to streamline operations and lower costs through mobile ordering and bill pay features. The Starbucks loyalty program currently has more than $2.4 billion in cash that is stored in member accounts.

Vail Resorts. Vail Resorts has built a vertically integrated business centered on the “Epic Season Pass” that is sold as a loss leader by providing access to all its resorts that, in recent years, have expanded beyond their flagship properties and into regional mountains close to major population centers. Vail can capture increased consumer wallet share through integrated wholly owned services, beginning with picking up travelers at the airport, owning and managing the on-mountain hotels, providing on-mountain dining experiences, and offering “fast pass” access to cut lift line times. Vail even owns and operates the Starbucks, ski rental shop and outdoor gear store along the routes to its resorts to be able to both manage the experience and capture revenue at every point in the customer journey.  

In the end, Starbucks drinkers often buy drinks several times a week, Amazon prime members spend, on average, $800 more per year than nonmembers, and avid skiers plan their entire winter around a trip to a flagship Vail owned mountain.

The flywheel in healthcare

Healthcare organizations have yet to promulgate successful flywheel programs. It’s no surprise, then, that patients often don’t engage or interact with health systems between episodes of care, because as an industry, we’ve focused more on “sick care” and being available in a moment of individual need – but not beyond.

Although patients often seek care at least twice a year, living a healthy life is something faced daily by patients. Health systems can start to close the gap between sick care and health care by enabling the flywheel and providing more proactive care services. As health systems transition from a fee-for-service mentality and adopt a shift to value, being able to offer those services and meaningfully engage with patients outside of care episodes through other digital endpoints is increasingly important.

In designing an engaging patient experience, health systems should seek to employ the same flywheels that other industries have successfully executed.

While healthcare represents a more complex use case because of data interoperability challenges, regulatory considerations, constraints set by payers and misaligned financial interests, health systems are positioned to get closer to their consumers with compelling experiences spanning provider access, third-party applications, care navigation, personalized experiences and content, and seamless payments across engagement channels.

Because patients vary widely in their care needs, health systems must offer a portfolio of engagement modalities and adapt as the consumers’ needs evolve.

Providence’s engagement approach

By integrating the unique identity of the patient with health and digital attributes of their consumers, health systems can develop and drive personalized engagement programs. Further, developing a single platform that operates in parallel with the EMR, while also integrating with third-party services and applications enables health systems to start to seeing consumers as people, not just patients.

An authenticated digital experience, rooted in consumer identity outside of the EMR, unlocks new value by utilizing various data sources to create a 360-degree view of the consumer.  By knowing more about who we serve, we not only improve the consumer’s experience, but improve outcomes, lower cost and the consumer relationship.

With increased engagement, Providence executives expect to be able to reduce churn. While some types of patient churn are driven by structural challenges, such as patients moving or joining out-of-network health plans, other core drivers of churn can be readily addressed – such as not being able to understand care options, inconvenient technology and burdensome registration processes. The onus is on health systems to reduce patient churn rates by offering a best-in-class experience on top of delivering best-in-class care.

As more than 80 percent of surveyed consumers prefer to communicate with healthcare providers through digital channels, and 43 percent wanting digital touchpoints before, during and after a visit, it is imperative that healthcare systems offer engagement tools that not only enable transactions but also surface relevant and personalized content.

Defending against disruptors

Limited engagement not only hurts brand loyalty and reputation, but also forces health systems to reacquire and onboard patients at higher costs, something many cannot afford. Worse, limited engagement also leaves room for disruptors to disintermediate and own the patient relationship.

Approximately 70 percent of U.S. health systems do not have a dedicated mobile application or use solely an off-the-shelf EMR offering, giving other entities an opportunity to better engage patients digitally. More than 90 percent of hospitals have adopted an online patient portal, although most hospitals report only one-third of their patient populations has activated their portal, signaling that current portal offerings and corresponding patient experience is not compelling. Furthermore, the vast majority of patient portals are undifferentiated beyond superficial differences in white labeling, look, feel and configuration.

If healthcare systems do not establish consumer relationships, digitally native disruptors will further disintermediate patient relationships. As competition and options for healthcare increase, healthcare systems will find their markets saturated with not only traditional competitors, but also with digital and retail companies that have penetrated the market in faster and more convenient ways.

Large retailers with established loyalty programs and brands, such as Walmart and CVS Health, continue to execute their digital strategies in the market by adding more competition at lower prices, thus shifting patients away from health systems.

Moving beyond the flywheel

After an effective flywheel has been established, organizations can then use it to offer new targeted services and offerings whether expanding horizontally or vertically across an industry.

Online retailers such as Amazon’s transition into new revenue streams and its ability to straddle in-person service offerings integrated into the mobile experience can serve as a blueprint for health systems.

As most recently seen with Amazon’s acquisition of One Medical, this may be another offering into their Prime flywheel. However, given the purchase price of nearly $4 billion and the strategic importance of selling services into employers, this is likely an opportunity for Amazon to gain a more material seat at the table with commercial insurers. This can serve as a foundation for future growth into the healthcare sector with their other health ecosystem products such as Amazon Care, Pill Pack and Halo, regardless of whether it presents a fully integrated offering or not.

To augment the flywheel, healthcare systems should consider non-traditional ways to engage with patients and new product offerings, such as durable medical equipment (DME) sales, direct-to-consumer services, concierge levels of service and even deep integration into payer member portals, all in one convenient location.

Additionally, healthcare systems can borrow lessons from digital retailers on how to operate hybrid care models in which engaged digital users are routed to the most appropriate in-person services at the right time and place.

Sara Vaezy is executive vice president and chief strategy and digital officer for Providence, where she is responsible for system strategy and digital innovation for the integrated delivery network, which includes 52 hospitals and 1,085 clinics and serves more than 5 million unique patients. 

Doug Grapski is director of digital strategy in the Providence Digital Innovation Group, where he drives digital health strategy for Providence and Providence-incubated technology. 

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