Despite the flattening of DTC spending in the past few years, there is a tidal wave of DTC opportunities coming for health marketers. I will broaden the definition of DTC to beyond drugs and devices and include health services which include health providers, clinics, and diagnostics.
What people are realizing about Obamacare is that cost shifting to consumers is rapidly rising. We all are now required to have insurance but what is that insurance really? These so-called “improved plans” are designed to cover us for really bad events. While they cover some preventative care visits without deductibles, most American families will pay over several thousand in deductibles before any reimbursement occurs. Those bronze plans on the exchange will cost you $6,000 in deductibles per person. This is on top of about $5,000 in premiums.
Is it any wonder young and healthy people are reluctant to sign up? Young males visit the doctor about once every two years. Are they going to pay for premiums and deductibles in the thousands for this $100 visit? So far they are not signing up. It really does not make economic sense based on the odds of getting a serious illness. While I would want my adult children insured I would advise them to take the most catastrophic plan at the lowest cost.
For those that do have insurance whether on the individual or employer market, deductibles are growing in order to keep costs manageable. Consumers have a lot more skin in the game. In the long run this a good thing. The wallet is the best motivator to ask more questions on price/value. That “someone else pays” problem we have had in America, leading to escalating costs, is going to decline.
DTC advertisers now must compete more heavily on price value. That includes drug companies. If I have a $6,000 yearly deductible I am not going expect to reach it. I am on my own in terms of paying for services. It is true drugs are covered but brand name drugs will have co-pays approaching full price. In terms of physicians, I am going to be very watchful over what they want to test. The consumer will be asking much more about the value of a test and demanding to know its cost. Providers used to never discuss cost with patients. They bristled when asked because cost should not enter into doing what they think is right for patients. No longer will that be the case.
High deductibles and increasing co-pays will make that “someone else” become us. We now will pay for everything except costs related to serious illnesses. Consumer information will be a new industry for health services. We can expect to know in advance what a few days in the hospital will cost us. We will likely comparison shop among hospitals. That means an incentive for providers to satisfy us. When it is our money we are in charge.
High cost providers of drugs, services, diagnostics, and procedures are no longer free to charge what they want. Consumers will push back and in this economy demand value for the money. Insurers will squeeze as well any high cost provider because they hate to pay more than is necessary once that deductible is reached. Republicans may hate Obamacare but it does do one thing well, albeit as an unintended consequence. It makes us consumers have more skin in the game. We can all save thousands just by being healthier. I only spent $112 this year on physician visits. I consider myself in good shape and work hard to stay that way. In fact I hope to never reach my deductible. Of course one day I will likely get some major illness and for that I do have insurance.
Advertisers must also recognize the inexorable trend towards consumer cost shifting. That means advertising claims must appeal to the cost consciousness in all of us. Do I really need a brand name for OTC’s and drugs? Do I hold off on getting a CAT scan or x-rays for that nagging back ache? Do I wait to see the doctor a little longer for that lingering cold? Do I take more interest in my cholesterol and blood pressure to avoid heart disease? Do I go to a $75 walk in clinic before going to a $300 specialist? Saving money is a great motivator. That is the major trend this new high deductible insurance coverage will lead to. That is a good thing for all of us in the long run, although painful now. Of course it did not take Obamacare to get to higher deductibles. That was happening anyway as a way to control costs.