The middle class in America is barely hanging on, and increasingly uninsured. the Robert Wood Johnson Foundation’s report on the continued erosion of health insurance in the U.S. talks of the recession’s toll on average Americans and employers’ ability to cover their health.
Furthermore, two consecutive years of economic downturn in the U.S. have driven two years of downturn in consumer spending. This has led to consumers trading off a balance of price, brand and convenience which Strategy& (previously Booz & Company) calls The New Consumer Frugality.
In their latest report detailing consumer spending trends in 2,000 random American adults, Booz finds a new consumer clipping more coupons, trading off convenience for price, and saving versus spending. Consumers have shifted behavior, and changed for good hardening these practices into a new consumer spending ethos.
The New Frugal Consumer likes private store labels that represent value. They need proof for why they should trade up in price. “They won’t accept a price gap unless they perceive a clear value advantage in quality or connect emotionally to key brand attributes….They may also be unwilling to trade up if they perceive the jump as too great,” Strategy& asserts.
![Health Populi's Hot Points](https://www.healthpopuli.com/wp-content/uploads/2010/06/hotpoints.png)
We’ve seen in the Kaiser Family Foundation Health Tracking Poll during the recession that Americans are indeed making trade-offs based on the cost of health care. In September 2009, 56% of Americans took some sort of action to self-ration health care due solely for the reason of cost. This includes postponing needed visits to providers, postponing recommended diagnostic tests, and relying more on home remedies.
In these instances, it’s not a case of opting in to a lower-cost health service — it’s opting out of getting care entirely when needed.
As the chart illustrates, only 11% of Americans believe they’d revert back to pre-recession spending in 2011 for the category of health care — drugs and supplies. Health marketers and public health planners, along with Congressional health reformers, should heed this data point. Cost is driving health behavior in America, and the health outcomes won’t be optimal.