Demand for health products and services is down in the recession; thinking about value and self-care in health

What is value in health care?

Every year we spend more and seem to get less, John Seng, Founder of Spectrum, told attendees of a webinar on the Spectrum Health Value Study on 12th May 2009. As we consumers spend more of our own money, we’ll be looking for greater value and “health ROI” from our health spending.

Measuring value across a population is confounded by the fact that what one person decides to spend on ‘health’ can be different from another’s health spending choices. In other words, our personal health “marketbaskets” for health spending vary from person to person. For example, an individual may perceive personal spending on Pilates and nutritionally-enhanced foods tallies into health spending. Another individual may only count traditional health service spending (e.g., physician visits, prescription drugs, hospital in- and outpatient) in their personal total.

Spectrum has evaluated a plethora of health services and product categories, as shown in the chart. The one finding that Health Populi readers will find especially important is that Americans’ expressed demand for health products and services — that is, actually spending and using — fell from January 2009 to April 2009. In particular, use of prescription drugs, OTC drugs, physician services, dental services, and health/personal care goods fell by many percentage points apiece. The chart illustrates these data for various categories measured in the survey.

These results come from a survey sponsored by Spectrum, a health policy and communications firm.

A total of 3,037 American adults were interviewed for the online survey in January and April 2009. The next iteration of data will come in August 2009.

Health Populi’s Hot Points: What are people doing to manage health if they are rationing their use of “health services” as defined in the Spectrum study. According to a recent Kaiser Family Foundation poll, shown in the chart on the right, American health citizens are indeed responding to the recession in self-rationing ways.

The most prominent category in this chart is health consumers’ increasingly relying on home remedies and OTC drugs instead of going to see a doctor. While Spectrum’s survey found that OTC purchases have declined in the early second quarter of 2009, people are looking to self-care as a substitute for care in the traditional health system.

The wild card question the Spectrum survey begs to be answered is: will health consumers’ changed behaviors in this recession be sustained in the future as the macroeconomy improves, along with a reformed US health economy? We observe that American consumers in general have shifted purchases away from higher-end retail at Abercrombie, Neiman-Marcus and Macys toward Walmart and Big Box discounters.

What is the equivalent of this demand shift in health care? Bet on growth in self-care products and services to continue as more people learn how to more effectively use the Internet as health information source, web 2.0 tools in health, and the adoption of mHealth through mobile phones. This DIY health era has begun, and the 2008-10 recession is a mother-nurturer of this innovation.
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