ACOs: Cost vs. Convenience

Uber’s announcement that they’re launching an online delivery service is the latest sign that more and more consumers want more and more convenience. Personally, among other things, I book travel, buy groceries, order takeout, book dinner reservations and buy concert tickets from my iPhone. Amazon Prime and one-click shopping is now my expectation for a quality online shopping experience. People want convenient and easy and simple and beautiful in all aspects of their life. Slick apps like Kayak and OpenTable and Stubhub have caused consumers to be more and more spoiled.

We’re seeing this manifest itself in healthcare as well now with the explosion of urgent care centers, concierge medicine and tele-health sites.

This trend in healthcare is not only not going to not stop, it’s speeding up. When consumers want convenience, lots of companies pop up to give it to them.

It is this continuing demand for hyper-convenience -- and the willingness of organizations to offer it -- that makes me skeptical about the future success of Accountable Care Organizations (ACOs). Given the demand for convenience, will large portions of the population agree to be locked into a narrow network that limits choice, flexibility and ease of use? Do consumers (patients) want that?

The answer is complicated. But I think it hinges on an ACO’s ability to lower costs significantly enough that consumers are willing to start making some sacrifices.

When you consider the pendulum of convenience versus cost in healthcare, there are clearly defined markets on the fringes -- there are patients that will be happy to pay more for convenience and patients that will be happy to have less flexibility in return for lower costs. But the reality is that most patients are somewhere in the middle. The huge segments in the middle where convenience and cost matter is where the money will be made.

Providers' ability to walk this fine line between cost and convenience will be the thing that dictates the winners and losers and will be the key to the adoption of quality-driven accountable care.

People are going to want Uber to deliver their groceries, but if the price point is too high they'll just drive themselves to the store.