"Social marketing is a process for influencing human behavior on a large scale, using marketing principles for the purpose of social benefit rather than commercial profit."

—William A. Smith, Executive Vice President of AED, 1999

"People don't buy products; they buy the expectations of benefits."

"Over-ambition is the pitfall of most strategies. Don't try to be all things to all people, or to sell a product for all occasions."

—Roman & Maas, 1992

Case Example: A Coordinated Approach to School Health

To provide a better understanding of multifaceted products, and how they can be shaped and positioned to meet the needs of a range of audiences, Ms. Doner shared a hypothetical example based on an analogous product, which was a coordinated approach to school health (CSH). With CSH, the goal is to coordinate all aspects of a school that can affect student health: the school environment, health education, school meals and nutrition, physical education, health services, counseling and mental health services, staff wellness, and parent/community partnerships. The audience for CSH includes, at a minimum, school administrators, teachers, and other school employees, parents, and students.

To make sure that CSH is viewed as desirable, researchers must understand the key problems facing each of these target audiences and then determine how CSH can be positioned as providing a solution to that problem. Ms. Doner shared a simplified example of what these key problems could be. Administrators might be primarily concerned about absenteeism, while teachers might be concerned with disruptive kids. For their part, parents might be worried that their children are developing eating disorders, while students may say that they don't eat healthier meals because they do not have enough time for lunch.

If the researchers map each of these problems, they may identify ways in which CSH could be positioned as addressing each of the key problems cited above.

Part of the absenteeism resulted from a measles outbreak. Health services could assist with absenteeism by providing needed primary and preventive care, including vaccinations. Regarding school meals:

• Teachers said that many kids were disruptive because they were hungry. Expanding school meals to include breakfast could resolve this problem.
• Health education and counseling can address problems with eating disorders.
• Changing the lunch environment by reconfiguring the cafeteria to allow multiple stations might help students move through the lines faster and ensure that students have enough time to eat.

"Better health is often not a benefit that motivates consumers."

Ms. Doner expanded on this general approach to understanding consumers by highlighting a few preliminary research questions related to information about the quality of health care services. The exploratory nature of qualitative methods, such as focus groups or in-depth interviews, can help to uncover answers to questions such as:

• How do consumers make their decisions about which plans, providers, or treatments to choose?

  A number of research studies on this topic already exist.

• How do consumers define quality, and where does it fit into their list of priorities?

  Ms. Doner noted that some research, such as the KFF/AHRQ survey, suggests that available information is not specific enough to meet consumer needs.

• What can consumers do differently?

• When can they do it?

• What problem(s) do consumers have that information about quality can solve?

Step 3: Develop Solutions. Once an audience has been identified, together with a behavior for them to change, there are four basic methods of bringing that change about. The method(s) used will depend on the situation.

• Improve the product being offered (e.g., by providing measures of quality along dimensions important to the target audience).

• Increase the accessibility of that product (e.g., by putting relevant quality information where consumers can easily get it, and making sure they know it is there).

• Reposition the product as meeting an important want or need, by reframing it in the consumer's mind as offering a compelling benefit.

  The most appealing benefits for consumers are immediate and tangible. They typically tap into core values, such as the desire for independence or control, or the desire to care for one's family. Better health, in and of itself, is often not a benefit that motivates consumers. Quasi-quantitative methods (e.g., central-location interviews) can be used to test messages and product positioning.

• Make the competition less appealing, by associating competitors with drawbacks that consumers dislike; however, depending upon the behavior, this approach can raise ethical and/or social acceptability issues.

Tailoring the appropriate solution requires understanding how to fit information on quality into the consumer's decisionmaking process. One must understand what type of information can provide a benefit that the target audience deems to be important, as well as what actions consumers will be willing to take. Finally, another critical issue is how to get consumers the information they need.

Applying Social Marketing Principles to Health Care Quality Promotion Programs

Peter F. Garrett, senior partner with Garrett Yu Hussein, LLC, built upon Mr. Strand's and Ms. Doner's presentations by discussing how one applies the answers to research questions to health care quality promotion programs. He began by noting that social marketing principles can apply to all types of programs, including communication campaigns and outreach initiatives.

What Are You Trying to Do?

Mr. Garrett cautioned that any campaign must begin with a realistic review of what is being attempted. No campaign can be all things to all people. It is unrealistic to assume that an awareness campaign emphasizing the importance of quality will in and of itself be enough to change behavior. Some changes will not occur without the creation of new policies or regulations. Thus the critical first step is to determine the purpose of a campaign. Is it to advance a message or messages? To support creation of new policies or regulations? To launch new policies, products, or services? Or to revitalize existing products or services?

Mr. Garrett believes that of the "four P's" of marketing (product, placement, price, and promotion), product is by far the most important. Without a good product, the rest of the campaign cannot work. And with respect to information on quality, the product is the action or behavior that is desired of consumers.

An Example of How This Might Work

Mr. Garrett shared an example of how a social marketing approach might work to encourage elderly African-American women to make more informed choices with respect to treatment options for breast cancer screening, hypertension control, and/or diabetes treatment. The crux of the campaign should begin with a review of the key questions, including who the target audience is, what is desired of them, and, most important, what they will gain by changing behavior. (Mr. Garrett described this as everyone's favorite radio station—"WIFM" or "What's In It for Me?")

Possible communication strategies with this audience include the following:

• Paid media/advertising (one approach that can work well, budget permitting).
• Earned media, or public relations efforts to cultivate the media.
• Development of written materials, such as brochures or Web sites.
• Interpersonal communications, including speeches and presentations.
• Developing third-party alliances (coalition-building).

Mr. Garrett noted that social marketing principles should apply to all elements of these communication strategies.

Alliance-Building as an Example of a Social Marketing Strategy

As an example of how to apply social marketing principles to all levels of a communications program, Mr. Garrett used alliance-building, as many third-party organizations are highly successful in reaching their target audiences. By bringing together a number of third-party advocacy organizations, Mr. Garrett believes that quality can in fact move up on the national agenda, as such alliances will underscore the importance and credibility of the issue. These alliances can also harness the power of networks.

To this end, he suggested identifying and approaching the leaders of those organizations that have an influence over the target constituency. But he cautioned that these individuals listen to "WIFM" as well, and they will need to understand why it is in their interest to move information about health care quality up on their priority list. Critical issues that a potential ally might consider include whether the issue can help to boost fundraising, raise the organization's visibility, improve the health of constituents, or make the head of the organization look good in front of the board of directors. Key questions that the leaders of these organizations might consider appear in Figure 1.

Traditionally, advocacy organizations are most concerned with increasing their funding levels so that they can find a "cure" for the disease(s) or problem(s) for which they advocate. But it is possible to make the argument that this singular focus on cure is likely to produce benefits for constituents only in the long run. Mr. Garrett believes that advocacy organizations might be attracted to the notion of providing information on quality as a strategy to offer a more immediate and widespread benefit to constituents. To that end, he advocated positioning any campaign in that way when approaching third-party organizations. He also reiterated the need to look at the issue from the advocacy organization's perspective by identifying what kind of information on quality would be most relevant to their audience. The key is to help them in their efforts to raise additional funding and to focus on their core mission.

General Discussion on Social Marketing and Its Application to Health Care Quality

These key points were made during the discussion that followed the formal presentations:

On Developing a Product or Message

• Existing research on consumer use of quality information suggests that the packaging and dissemination of data are very important. One must first look at the product from the eyes of consumers and then develop products to meet their needs.
• A positive message generally is more effective than a negative one, although at times a negative message can work. It is important not to alienate those organizations, such as providers and health plans, that are being measured. In many instances, it is easy to change a negative message into a positive one, by tapping into core values such as taking care of a family member.

On Targeting Consumers

• Consumer segmentation should be based on behaviors, not only demographics (which tend to mask other important differences). One potential research strategy is to look at "doers" (i.e., those already using information on quality to make decisions) versus "nondoers." The key issues become why some individuals are using the information while others are not, what is different about users than nonusers, and how one might translate the benefits that users perceive to nonusers.
• Caregivers, family and friends, and support networks should be considered as a critical target audience, as they have the most influence on patient decision making. The key question to ask is—what can be done to help these individuals. If the answer is to offer counsel on the importance of quality, the needed step is to understand their perspective on this issue, and then to develop an appropriate strategic response. One very successful social marketing program that tapped into the "friends and family" strategy was the Friends Don't Let Friends Drive Drunk campaign.

On Conducting Research

• Focus groups and in-depth interviews are methods used in concept and message testing. Focus groups can be used to identify and prioritize potential benefits (e.g., from most to least compelling).
• Multidisciplinary teams should be involved in the research.

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Section 2. Creating a Market for Health Care Quality by Informing Consumers About Medical Errors and Patient Safety

Robert Galvin, M.D., serves as director of Corporate Health Care and Medical Programs for General Electric Company, a corporation that each year purchases $1.5 billion in health services and coordinates 1 million visits to GE-owned health clinics located in more than 20 countries. Dr. Galvin's remarks related primarily to Task 4 of the Research and Action Agenda, which deals with identifying the market characteristics and purchasing strategies that support consumer use of quality information. More specifically, he described the conditions necessary to create a working market for health care quality, focusing on one critical aspect—medical errors and patient safety—where GE and other major purchasers are trying to make the market work more effectively by publishing information on quality.

Why Inform Consumers About Health Care Quality?

Dr. Galvin highlighted two important reasons for informing consumers about health care quality. The first is that providing this data is consistent with American values of openness and full disclosure. The second reason, which is where Dr. Galvin focused most of his presentation, is that a market-based health care system has an important role in America, and this approach requires the disclosure of information about quality.

The critical assumption is that the market will work in health care. For this to happen:

• Consumers must be informed buyers of services, able to understand the various complexities of health care.
• Information must be available for consumers to use, including data on specific providers and relevant to specific situations.
• Consumers must use this information to choose better quality care.
• Providers must be measured with respect to their quality performance, and be able to improve this performance over time.

If these assumptions are correct, the net result will be higher value for consumers. But Dr. Galvin is not yet convinced that these assumptions are in fact correct. A quick "reality check" of these assumptions shows that there is no evidence that the market for quality will work in health care, as there appears to be no business case for buyers and sellers to come together. Most consumers believe that the quality of health care is fine, as they equate quality with their physicians, whom they view positively. For their part, physicians also believe that quality is fine.

But there may be reason for optimism about the role of the market, as there is also no evidence that it will not work. Managed care has created an environment that indicates that there is a business case to be made for buyers to demand better quality, as it can lead to lower costs. A subset of consumers have shown a willingness to act on timely, meaningful information, while a small cadre of physicians (perhaps 50,000 out of the 700,000 in the country) do not agree with the premise that the quality of today's health care services are fine.

Toward a New Model for Health Care Purchasing

Dr. Galvin envisions a day in which today's marketplace characterized by the purchase of health care services by employers and the government from providers through an intermediary (the health plan) is replaced by a model in which consumers buy services directly from providers, using information to help them choose based on quality and price.

First Step: Performance Measurement

Implicit in this model is the use of measures that gauge the performance of providers. Such measures can serve two distinct but inter-related purposes:

• They can aid consumers in selecting plans and providers, thus making them accountable for their performance.
• For plans and provider organizations that take this accountability seriously, measures can assist plans and providers in quality improvement activities.

Second Step: The Possibility That the Data Will Be Used

Although there is as yet no evidence that most consumers seek to use information to choose the highest quality providers, at least some providers and plans appear to believe that there is a possibility that they might make that choice. And that possibility is all it really takes to encourage quality improvement. Dr. Galvin noted that there are a handful of cases in which the public release of information on quality has spurred improvement, such as in New York where state-released data on bypass surgery outcomes stimulated significant action at the provider level. But Dr. Galvin cautioned that the mere possibility of acting on information can only work for so long; at some point consumers will actually have to act on data in order for it to continue to provide an impetus for improvement.

Third Step: Adoption

For performance measurement to have a lasting impact on quality, someone must ultimately act on the information. And for someone to act, they must be motivated to do so. Dr. Galvin described a process of "adoption" that one or more stakeholders in health care must go through if they are to begin acting on quality information and thus serve as a catalyst for the market to change. This adoption process includes five distinct steps:

• Becoming aware of quality issues within health care (something that most players have not done).
• Endorsing goals and performance measures for organizations and individual providers.
• Intending to act on the information.
• Taking action.
• Seeing success from that action.

Employers Must Lead the Charge

Dr. Galvin does not believe that most of the stakeholders within health care are in a position to drive the market toward a focus on quality. While quality cannot be improved without the cooperation of providers, there is no business case for providers to lead the charge. Regulators can set a "floor" with respect to quality, but because quality cannot be mandated, they have no mechanism for spurring continuous improvement. Health plans can help to facilitate the effort, but cannot lead it. Government purchasers are hampered by political considerations that make it too difficult to make the kinds of plan and provider selection decisions necessary for the market model to work. Consumers are not yet ready to lead the effort, as they still largely believe that quality is fine. In Dr. Galvin's view, that leaves employers to lead the market transformation. And he believes that private employers can be motivated to do so, as long as the business case can be clearly articulated.

Dr. Galvin believes that there is a clear business case for employers to promote better quality in health care. This belief is based on four underlying assumptions.

Assumption #1: Higher Quality Means Lower Costs. The first underlying assumption is that higher quality does in fact lead to lower costs. This belief is driven by "Six Sigma" analysis conducted by GE. Put simply, this analysis measures defects per million, with a goal of reaching six standard deviations from the norm, or roughly 3.4 mistakes per million opportunities. Unfortunately, with the exception of administering anesthesia during surgery (which enjoys 5.3 to 5.5 sigma levels of quality), many health care services, such as treatment for lower back pain and use of new drugs, enjoy relatively low levels of quality, roughly on par with or worse than airline baggage handling.

GE is convinced that improving the quality of these health services would result in lower costs. Their own analysis suggests that the company would save $6 million if treatment for low back pain could reach 6 sigma levels of quality. And by extrapolating the results of the Institute of Medicine (IOM) study on medical errors to GE's population, the company estimates that medical errors result in 135 employee or family member deaths, and $8 to $10 million in additional health care costs each year. GE's leadership believes that these figures create a strong business case for quality.

Does Higher Quality Really Cost Less?

Dr. Galvin noted that higher quality need not always cost less. For example, eliminating the underuse of certain resources may improve quality but would also drive up costs. But correcting misuse and overuse—also big quality problems—would likely lead to lower costs. He would like to see a research study that attempts to "net out" the cost impact of addressing all three of these quality problems.

Assumption #2: Some Providers Are Better Than Others. A second assumption behind the business case for quality is that some providers are better than others. Support for this hypothesis can be found by analyzing the costs and outcomes of various providers in a given market. For example, GE's analysis of the mortality rates and costs of hospitals providing bypass surgery in the Milwaukee area found that the lowest mortality hospitals were also the least expensive. A cross-market analysis of this same data found that GE could lower its costs by 9 percent if employees in 15 cities went to the safest hospital in their market area. Obviously, outcomes for these patients would improve as well.

Assumption #3: Some Consumers Will Use the Information. GE's underlying assumption is that at least some subset of consumers will use the information on quality when it matters to them. The hypothesis is that the 17 percent of GE families that utilize 70 percent of health care resources will be the best targets, especially at the time they use care (a teachable moment).

To better understand the validity of this assumption, GE engaged the Foundation for Accountability (FACCT) in 1998 to conduct research into critical issues surrounding the use of information on quality. Key findings include the following:

• Consumers want information on the quality of physicians; however, they will typically choose plans based on price.
• Consumers trust information provided by family, friends, and their physicians. They also want data from renowned sources such as the Mayo Clinic or the Memorial Sloan-Kettering Cancer Center.
• Consumers will act on information on quality, if it is the right information at the right time. For example, 84 percent of those surveyed suggested that they would switch physicians or hospitals with poor patient safety records.
• Key trigger points for information included the time of diagnosis of a chronic illness.

Assumption #4: Safety Is the Hook to Quality. The fourth assumption behind GE's business case is that safety is the hook to quality. Unlike with the other assumptions, there is no hard evidence to support this hypothesis.

One Approach: The Leapfrog Group's Effort to Improve Safety

On the basis of these four assumptions, a group of 60 private- and public-sector purchasers—including GE—formed the Leapfrog Group. They are focused on three distinct "leaps" in hospital safety:

• Use of computerized physician order entry (CPOE).
• Use of intensivists.
• Steering of patients away from low-volume facilities for selected procedures where outcomes correlate with volume.

These initiatives collectively have the potential to save 50,000 deaths and avert 500,000 serious medical problems each year.

In joining Leapfrog, GE is making a bet that employers and the health care community will respond to information on safety. There are parallels between this and other safety movements, such as those emphasizing auto safety and environmental safety. In these movements, government interest, combined with a sentinel event, proved to be the catalyst for improvement. It remains to be seen whether recent and upcoming IOM reports will prove to be the catalyst for improving health care safety.

The Leapfrog Group's approach is very much a market-oriented approach. These purchasers have consolidated their power by adopting a set of common principles. They are not bullying providers, but rather are educating consumers about these safety issues. They are also informing consumers about which providers have in fact implemented use of CPOE and intensivists, as well as which facilities meet minimum volume criteria in the volume-sensitive procedures. The goal is to reward these providers with market share, as informed consumers will "vote with their feet" by migrating to these institutions.

On a practical level, this approach might work as follows: A patient with heart disease gets an E-mail with relevant medical information (or the patient could proactively access such information). The patient selects a Web link on that subject, gaining instant access to hospital-specific statistics that relate cardiac mortality rates with volume, or that highlight those institutions in the local area that use CPOE or intensivists.

The Leapfrog Group plans to measure success in two distinct ways. The first will be to gauge employee perceptions through a survey that asks, for example, whether the employee understands the concepts of variation in practice patterns/outcomes and best practices. The second method will be to test the Leapfrog Initiative against the business case outlined earlier. Specifically:

• Will the initiative result in a decrease in care that falls outside established guidelines?
• Will it increase use of CPOE and intensivists?
• Will it increase use of the safest (i.e., most active) hospitals for those procedures, determined using a known correlation between outcomes and volume?

Major Challenges and Next Steps

Dr. Galvin highlighted some potential challenges that could derail the push by employers for higher quality:

• Rising health care costs and a softening economy could drive employers to a "cost-only" focus.
• The failure to develop a business case for providers could drain the quality movement of its momentum. The physicians must have a stake in higher quality; to keep the effort going, one in three physicians must believe that quality needs to be improved-not the one in 10 who do so today.
• Government actions, such as continued underfunding of Medicare+Choice, new legislation creating liability for health plans, or unreasonable privacy and confidentiality restrictions, might disable the market and lower employer interest in quality.

To prevent these quality improvement efforts from being derailed, Dr. Galvin suggested five critical next steps:

• He endorsed the concept of using a social marketing approach in a national awareness campaign about quality (as advocated in Task 1 of the Research and Action Agenda). Too many people believe that quality is not a problem, a perception that must be changed.
• He advocates continued use of coordinated national efforts for quality improvement.
• The National Quality Forum must endorse a new set of core measures; the burden caused by the overabundance of measures available today is too great.
• Health services research must stay relevant by putting resources into understanding how the market for health care works.
• The Leapfrog Group must deliver with valid, positive results, so as to build momentum for other initiatives. If not, employers may lose interest.

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Section 3. The Future Environment for Consumer Information on Quality

At the conference, Ian Morrison, Ph.D., M.A., a consultant and health care futurist, provided his predictions on the future environment for consumer information on quality, including how this movement fits into larger trends toward consumerism and information technology within health care. He described four potential scenarios for the future of the American health care system, with a special focus on the role of consumerism, consumer information, and technology within each.

Background: Key Forces Driving the American System Today

Dr. Morrison began by reviewing five key forces driving the American system today, as he believes it is important for individuals to understand the external environment in which the debate over quality and quality information exists:

• Public discontent with health care in general and with managed care in particular.

  Despite the backlash against managed care, Dr. Morrison does not believe that managed care is going away anytime soon (if at all).

• Reluctantly empowered consumers.

• The fruits of innovation, leading to both costs and benefits.

  Consumers want access to these amazing, expensive new technologies, but it is not clear who will pay for them.

• The promise of the Web, coupled with a lack of information technology infrastructure.

  Health care is way behind the curve [when] compared to other industries within the service sector.

Each of these forces is discussed in more detail below.

Force 1: Public Discontent

Public satisfaction with managed care and health insurance has declined rapidly in the last 4 years, much more so than has satisfaction with other services, including hospitals. Today the public is much less satisfied with managed care than with airline service, and only slightly more satisfied with managed care than with tobacco companies. The percentage of the population that believes that the trend toward managed care improves quality has dropped significantly since 1995 (the height of the debate over President Clinton's health care plan), while the percentage that believe that the trend toward managed care harms quality has increased. Both trends have leveled off in recent years. Even employers, who used to be ardent supporters of the industry, have changed their tune. Dr. Morrison believes that employers are somewhat hypocritical in this view, as they have directed managed care organizations to cut costs and ration services for them (Table 1).

The media have become a megaphone for physician complaints against managed care, with some of these complaints being legitimate and others not. Dr. Morrison believes that physicians are legitimately concerned about quality, but they view quality in terms of having access to resources to help save lives and eliminate disease. They do not want to be told how to practice medicine through guidelines or protocols (Figure 2).

Today the media seem to have their sights on the pharmaceutical industry. And while media hype often represents real experiences and high-profile failures (especially with respect to serving seniors and those with chronic diseases or other special needs), it also serves to amplify public opinion against the industry.

In the midst of this turmoil, a quality conundrum has emerged: Choice has become a surrogate for quality, as the public has been persuaded that being able to choose among providers is better than being given access to an organized delivery system. In fact, an individual consumer does not generally care about the health plan, but instead is concerned with access to specific providers. This consumer also does not care about performance measures at the health plan level, such as immunization rates, but rather cares whether he or she receives an immunization when needed.

The public also blames managed care for patient safety problems, even though the Institute of Medicine report suggested that system problems are primarily responsible for medical errors—problems that presumably would be less likely in an organized delivery system.

The bottom line is that managed care is losing the quality battle. The public and physicians are united in their view that managed care is evil, despite the fact that satisfaction scores are generally high. (Dr. Morrison noted that most consumers dislike HMOs, except for their own.) Employers are no longer convinced of the benefits of managed care. Choice and price have become the key factors driving decisions, neither of which is a proxy for outcomes and value. And unfortunately, managed care lacks a theoretical framework for quality, as past theories, including managed competition, outcomes, evidence-based medicine, and consumer report cards, continue to lack acceptance among relevant stakeholders. These perceptions are real, and they create real problems for the managed care industry.

Force 2: Reluctantly Empowered Consumers

A number of forces are leading to rising consumerism within health care.

• Rising education levels have led to a more demanding consumer (which is why all industries are suffering from declining levels of consumer satisfaction).
• Tiering of benefits has forced consumers to pay more out of their own pockets. If this trend were to accelerate, it would have a big impact on the level of consumerism within health care.
• Relentless media coverage of new "miracle" technologies and treatments has served to amplify consumer interest.
• Direct-to-consumer (DTC) advertising has spawned a marketing revolution, with over $3 billion spent each year by pharmaceutical companies. The ads have worked, as over one-quarter of Americans have asked a physician for a drug seen advertised on television, and more than one in 10 get the prescription.
• Complementary and alternative medicine, services traditionally paid for by consumers out of their own pockets, have risen in popularity.
• Cyberchondria (i.e., computer-assisted hypochondria) has hit the American consumer, with increasing numbers turning to the Internet for health information.

Despite these forces, Dr. Morrison believes that consumers are only reluctantly becoming empowered. In fact, many consumers are not thrilled with being invested financially in the health care system. While venture capitalists are betting on a rapid move from defined benefits to defined contribution, Dr. Morrison expects a more gradual movement. Just as managed competition and Medicare+Choice (which were supposed to empower consumers to choose) never really took off, the movement from defined benefits will probably occur at a slower pace than anticipated. In fact, a survey of employers shows that less than one percent are committed to moving to defined contribution within the next 2 or 3 years, while only 5 percent are very likely to do so. Three in four employers are either "not very" or "not at all" likely to move to defined contribution systems. Today's era of low unemployment and very tight labor markets has left employers scrambling to find top-notch talent; now is not the time to pass on additional health care costs to employees.

If a recession were to occur, however, Dr. Morrison believes that the pace of movement toward defined contribution could accelerate, as employers' commitment to health care coverage would wane. Corporate America has run out of managed care tools for controlling costs. In a recession scenario, the move to defined contribution could accelerate quickly, especially among high-technology companies (which typically do not have unions), entry-level positions, service industries, and outsourced workers. The pace of the movement among unionized employers will likely be slower.

Force 3: Innovation and the Web

The third driving force in the industry relates to information technology and the World Wide Web.

More Consumers Getting Information from the Web

An estimated 98 million American adults now search the Web for health care information, up from 70 million only a year ago and 54 million 2 years ago. This figure represents 56 percent of the almost 90 percent of Americans who are online. Most online users—especially those with chronic diseases—turn to online services, such as Dr. Koop.com or Healtheon/WebMD, for their information. Relatively few look to their local providers for such information. Dr. Morrison believes that this trend needs to change. Consumers want quality information from national experts, and they also want to receive it from a trusted provider within their own communities. Dr. Morrison called on the provider community to undertake the challenge of building the information technology infrastructure necessary to provide this information via the Internet. He believes that the old economy and new economy have to come together in this field; old-economy managed care organizations such as Kaiser Permanente and Group Health of Puget Sound are farthest along thus far.

But They Are Increasingly Dissatisfied

Ironically, even as more consumers flock to the Web for health information, they appear to be decreasingly satisfied with that information. Within the last year, the percentage of consumers indicating that the Internet helped them to understand their own health problems, managing their own health, communicate with physicians, or enhance compliance with recommended treatments has declined markedly, by anywhere from 15 to 22 percentage points. Clearly information is not enough; consumers need to be able to do something with it. They are expecting—but not getting—the same kind of service that Amazon.com offers with respect to recommending books to read, but they are not getting it.

Physicians Slow in Adopting Information Technology

For their part, physicians and other providers are only slowly adopting information technology (IT); the health care industry as a whole lags well behind other service industries in adopting IT. Physicians seem reluctant to spend the massive amounts of money needed to build the infrastructure. They do not see applications for these technologies in clinical practice, in part because the market has not yet delivered many useful tools.

Dr. Morrison believes that this reluctance to use IT must end. He believes that most or all transactions need to be automated so that data on outcomes and costs can be collected automatically as it is generated rather than through special efforts after the fact. Reaching this point requires an electronic medical record (EMR), which has been evolving for many years but still is not widely used. (Dr. Morrison called EMR a "permanently emerging technology.") Most EMR companies find themselves in financial difficulty.

The good news is that physicians seem to be catching on to the value of the Internet. A recent survey suggested that roughly 40 percent of physicians believe that the Internet is helpful in providing quality patient care, the highest ranking of any factor, including medical specialty societies, pharmaceutical companies, and hospitals. Recent survey data from Strategic Health Perspectives and Computing in Physician Practice suggest that more physicians now use the Internet (89 percent), have their own Web site (32 percent), and communicate via E-mail with patients (13 percent) than did just a few years ago. (While confident that physicians are increasingly using these technologies, Dr. Morrison believes that these figures might overstate the true situation.)

Looking ahead, Dr. Morrison believes that the Internet could be a very useful platform for physicians to collect information for use in their everyday work environment.

Stakeholder Strategies for Reacting to These Forces

With these major driving forces in place, different stakeholders have pursued different strategies.

Health Plan Strategies

Dr. Morrison laid out several health plan strategies that are being pursued:

• Vertical integration for value, where value is technical quality and service relative to price.

  Kaiser is perhaps the only organization pursuing this strategy in today's "pro-choice" environment. Dr. Morrison believes that Kaiser appeals to a "different breed" of consumer and physician.

• Virtual single payer, where value equals choice and service relative to price.

  Most health plans have pursued this strategy; they try to gain 30 percent or greater market share, and then negotiate aggressively on pricing until the providers organize.

• Differentiation, either through product (e.g., offering high quality providers) or channel (e.g., letting the employer or consumer be the "quality picker").

  Very few plans are experimenting with this approach, although Dr. Morrison believes that differentiation strategies are "desperately needed" among plans.

Provider Strategies

Hospitals are also pursuing a number of potential strategies, including the following:

• Consolidator.
• Regional cartel (i.e., grabbing enough market share—usually around 30 percent—to force plans to include them at favorable prices).
• Benevolent monopolist, where hospitals that are the only game in town look after their patients with an eye toward quality.
• Specialty focus.

For their part, many physicians are simply hoping that the whole managed care revolution will end, so that the industry can go back to unregulated fee-for-service. On the other hand, pharmaceutical companies, which have benefited tremendously from the industry's evolution, hope that current trends do not stop (but they are worried that they will).

Looking to the Future: Four Scenarios for Health Care

As a futurist, Dr. Morrison offered four alternative scenarios for the future of health care. In his view, the key factors that will dictate which scenario unfolds are the degree to which defined contribution plans are adopted, and the degree of innovation in terms of health care financing and delivery.

Scenario 1: Knowledge Navigator

Assuming slow adoption of defined contribution strategies and high innovation with respect to financing and delivery, Dr. Morrison envisions a scenario that he calls "knowledge navigator" that will be characterized by the following:

• Employers will be unwilling to move to direct contribution in a tight labor market.
• Medicare+Choice will disappear.
• There will be more variation in quality and costs within health plans than between health plans, as most plans will contract with the same physicians. Consumers will finally learn the truth—that some physicians are better than others.

This future will provide huge opportunities for some entity (the knowledge navigator) to help consumers navigate within broad managed care networks. The Internet will be helpful in several respects with this navigating task, as outlined below:

• Providing quality scorecards for every aspect of care.
• Offering a venue for DTC and direct-to-physician marketing.
• Making business processes, such as formulary management and scheduling appointments, more efficient.
• Spurring the development of other new tools to help navigate the old, dysfunctional system that will remain in place.

On the consumer information front, cyberchondria will slow down while new economy e health companies will either go out of business or merge with existing players that physicians and consumers trust.

Scenario 2: E-Health Consumerism

If defined contribution is widely adopted and innovation within financing and delivery is high, Dr. Morrison predicts an era of e-health consumerism. More specifically, this future would come into being if most or all of the following occurred:

• An economic slowdown and rising health premiums lead employers to limit their escalating cost liability through a massive shift to defined contribution strategies. Health benefits are no longer seen as a ceiling but as a floor to be supplemented by private investment (just as with pensions).
• Earnings pressure remains, due in part to 3 years of double-digit health premium increases. As the unemployment rate rises, human resources become less scarce and thus less highly valued.
• Medicare+Choice is revived and extended by adding value-added services.
• The Bush administration passes a $2,000 "use-it-or-lose-it" tax credit.

Under this scenario, HMOs would become group purchasers of health services on behalf of enrollees and consumers. Empowered consumers would not be interested in choosing HMOs, but rather in choosing doctors, hospitals, alternative care providers, and others offering health care services. The Internet would likely provide the infrastructure to allow individuals to select personalized benefit plans; companies such as Charles Schwab might emerge as major health benefits packagers within 5 years.

This scenario would also involve a huge explosion in innovation and experimentation, including major advances in technology and genomics that could lead to perhaps a 30-year improvement in life expectancy, at least for those with excellent health coverage. The gap in health status between the rich and the poor could widen, although the very poor-along with seniors-would be the only consumer segments with guaranteed coverage of any type. Everyone else would have to "trade up" with their own money.

Scenario 3: The "V" Scenario—Virtual Single Payer, Vertically Integrated for Value, Very Rich Benefits

Assuming relatively little innovation in financing and delivery, and narrow adoption of defined contribution strategies, Dr. Morrison envisions the "V" scenario, characterized by the continuation of where the industry is today—health plans that are either virtual single payer or vertically integrated for value, coupled with very rich benefit packages.

This scenario would be characterized by the following:

• Employers are still mired in the health benefits morass, as health coverage continues to be viewed as a tax-efficient means of compensating employees.
• While cost sharing with employees escalates, defined contribution never becomes a widespread phenomenon.
• As employers and consumers seek value from their health plans, segments become more clearly defined. Some consumers equate value with choice for the money, and they migrate to virtual single payer plans. Others equate value with coordinated care for the money, and they seek vertically integrated systems such as Kaiser Permanente.
• Meanwhile, the very fortunate will continue to receive very rich benefits paid for by someone else. Health care in America remains a lottery—only the medically fortunate win.

Under this scenario the Internet becomes in 2003 what the Encyclopedia Britannica was in 1953—a nice place to look things up, but not really essential. With the possible exception of the chronically ill, people are simply too busy to agonize over their health benefits.

Scenario 4: Long Division

In an era of low innovation with respect to financing and delivery and widespread adoption of a defined contribution approach by employers, Dr. Morrison envisions what he calls the "Long Division" scenario, an "ugly future" in which defined contribution becomes widespread as the economy falters, but the health care system itself is not reformed. If this were to come to pass, the number of uninsured would likely skyrocket, perhaps hitting 50 percent in states that already have high rates of uninsured individuals. Health care and health status would become a function of income, job, and geography. The trend toward defined contribution would accelerate this division between the rich and the poor.

The provider community would also suffer, particularly community and teaching hospitals that find it difficult to survive financially without outside assistance. And the Internet would unfortunately not help to deal with the big issues facing the health care system; it might even make them worse.

Implications for Key Stakeholders

Dr. Morrison closed by offering his views on the implications of these scenarios for the key stakeholders in health care, both in terms of coverage issues and the consumer information movement.

With Respect to Coverage

Regardless of which scenario comes to pass, it is likely that tiering of benefits will continue, and the high-end will benefit disproportionately. Dr. Morrison called for government to set a floor that guarantees minimum coverage for all Americans, and allows those who can afford it to "trade up" to better coverage with their own money.

With Respect to Consumerism in Health Care

Consumerism and the Internet will offer exciting new opportunities, with electronic commerce enabling both medical and service excellence. Dr. Morrison urged the leaders of the consumer movement to be vigilant about their task. He believes that any of the four scenarios he mentioned will serve to reinvigorate the quality debate in health care. He believes that strong leadership is needed to unite the different stakeholders with a common vision (if not values) with respect to consumerism in health care.

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