1. ReseaRch PaPeR
The QuesT for The
QualiTy-Driven Consumer
SEPTEMBER 2007
LINDA MACCRACKEN, MBA
GARY PICKENS, PHD
LEAH RAY, MBA
KAVEH SAFAVI, MD, JD
2.
3. Defining The QualiTy-
Driven Consumer
As price transparency and excellence in healthcare quality continue to gain momentum and grow in
magnitude, the hospital and physician selection process increases in complexity.1 For many consumers,
location and a friend or family member’s recommendation no longer shape healthcare decisions as
much as high-quality physicians and the best treatment options. At the same time, healthcare change
concepts, such as value- and results-based competition,2 raise the question of how much consumer
preference truly matters.
Consumers are demanding comprehensive, quality-driven information on providers, and healthcare
organizations are listening and responding. Hospitals are proactively communicating areas of excellence
and differentiation in their advertising and communication vehicles,3 and they extensively promote third-
party awards, top rankings, and improved or better-than-average outcomes. Government organizations
such as Hospital Compare (www.hospitalcompare.hhs.gov) are providing quality information on
thousands of individual hospitals as well as comparisons against state and federal benchmarks.
Numerous other organizations, such as The Leapfrog Group (www.leapfroggroup.org) and the Agency
for Healthcare Research and Quality (www.ahrq.gov), provide vast amounts of information on quality to
any interested consumer. As the demystification of healthcare quality continues and processes become
increasingly transparent, healthcare organizations are increasingly interested in defining the target
groups most focused on quality.
The need for hospitals to differentiate themselves in the marketplace has never been so compelling.
Many are responding by engaging in an image makeover4 targeting the engaged consumer5 who actively
evaluates healthcare providers. Consumer research, linked to market segment characteristics, identifies
the attributes of the quality-driven consumer who is most likely to search for quality information and
switch hospitals accordingly.
The term “quality-driven consumer” is an evolution of the term “quality-conscious consumer,” coined
in 2004 by Solucient, which was acquired by the Healthcare & Science business of Thomson Reuters in
2006. Both terms represent consumers who would seek quality ratings information about providers and
change their loyalty if their hospital received an unfavorable rating. With the quality-driven consumer, the
focus is the action taken based on quality information. New research included in this paper reveals key
insights into who quality-driven consumers are, how they search for health information, and what kinds of
services they use.
Quest for the Quality-Driven Consumer 3
4. Key Findings
• For 58% of the adult population, good physicians and the best treatment options drive opinions on
quality healthcare. Conversely, only 7% of adults are far less likely to indicate good hospitals as the top
factor in quality healthcare.
• One in five customers is a quality-driven consumer who is likely to research information on doctors and
hospitals and likely to change loyalty if their preferred hospital received an unfavorable rating.
• If shown a low quality rating for their hospital, 57% of adults would change hospitals; 24% of adults
would change private physicians if shown low quality ratings.
• One in five quality-driven adults is more likely than other adults to be invested in planned and
preventive care — using physician referrals, wellness/fitness programs, and health education events.
• Quality-driven consumers choose physicians, hospitals, and specialty care based on different priorities
than all adults. Further, specialization is highly influential to quality-driven consumers, whereas it is of
no importance to other adults.
• Willingness to pay more for highly rated providers and trusting quality organizations and quality rating
Web sites are unique to the quality-driven consumer compared with all other adults.
• High income and education levels are key attributes of quality-driven consumers. Quality-driven
consumers are more prevalent in the Sun Belt than the metropolitan areas of the coasts or Midwest.
• In terms of healthcare advertising, response rates for quality-driven consumers are uniformly higher
than all other adults. Quality-driven consumers are more interested in all types of healthcare
information.
• Most adults strongly prefer the Internet as a source of healthcare information. For quality-driven
consumers, the Internet is by far the most preferred source, comprising a twice-as-high ranking (over
55%) to the second most preferred source, a private physician (approximately 25%).
The QUesT To disTingUish and PinPoinT QUaliTy-driven ConsUmers
Although Thomson Reuters data suggest that the healthcare consumerism movement
has stabilized, understanding quality-driven consumers is a powerful tool for healthcare
marketers with significant implications for targeting this unique consumer segment. The
quest to distinguish and pinpoint quality-driven consumers begins with an exploration of
five business questions:
• Quality focus: What defines the quality-driven consumer?
• Utilizing services: Which healthcare services do they use?
• exhibiting behaviors: Which healthcare behaviors do they exhibit?
• segmenting and targeting: What are they like?
• Tailoring communications: How can they be reached?
4 Quest for the Quality-Driven Consumer
5. QUaliTy FoCUs: WhaT deFines The QUaliTy-driven ConsUmer?
Approximately one out of five adults is a quality-driven consumer — likely to research
information on doctors and hospitals and likely to change their loyalty if their preferred
hospital received a low rating. For the last five years, quality-driven consumers have consistently
comprised approximately 20% of the adult population. Interestingly, however,
the largest segment, representing 38% of all adults, is unlikely to research healthcare
information but is likely to change providers. Further research is needed on this unique
1 out of 5 U.S. Adults are Quality
group of individuals. One possible implication is that it is too difficult for these consumers
to research hospital quality information. (See Figure 1.)
Conscious about Healthcare
FiguRe 1: ONe OuT OF FiVe u.s aDuLTs WiLL sWiTch hOsPiTaLs Because OF LOW RaTiNgs
Quality-Driven
Unlikely to Research, Likely to Research,
Unlikely to Change Likely to Change
34% 19%
Likely to Research,
Quality-Driven Consumer is: Unlikely to Change
• Likely to research ratings information 9%
on hospitals or doctors
• Likely to change hospitals if preferred
hospital received a low rating
Unlikely to Research,
Quality-driven consumers use Likely to Change
the same amount of services as all 38%
other adults.
Source: HealthView® Plus 2006
When all consumers are asked to define high-quality healthcare, good physicians and the
best treatment options are the top two factors, comprising 58% of responses. Interestingly,
good hospitals are significantly lower at 7%. These findings suggest that the perception
of what makes a good or great hospital is still open to interpretation. For marketers, this
information translates into an examination of how these impressions are conveyed to
Consumer Definition of Quality Health Care
consumers and how the marketing opportunity can be best shaped to the target market
segments. (See Figure 2.).
“Most Important Factor in Defining Quality Health Care (Choose One)”
FiguRe 2: MOsT iMPORTaNT FacTOR iN DeFiNiNg QuaLiTy heaLThcaRe (chOOse ONe)
Clinical Trials
1%
Healthier Patients
3%
No Waiting
6%
Advanced Technology
6%
Good Physicians
Good Hospitals 37%
7%
Good Service
9%
Treated With Respect
10%
Best Treatment Options
21%
Source: HealthView® Plus 2006
Quest for the Quality-Driven Consumer 5
6. UTilizing serviCes: WhiCh healThCare serviCes do QUaliTy-driven ConsUmers Use?
The healthcare utilization patterns of quality-driven consumers are quite comparable to those of the
general population. Consumers were asked about the following healthcare services: screenings, health
education programs and referrals, therapies and procedures, healthcare facilities, and use of healthcare
professionals. The concentrations of screenings, therapies, and procedures and the use of numerous types
of healthcare facilities and healthcare professionals were similar, with quality-driven consumers slightly
higher across all areas.
In terms of health education, quality-driven consumers are more likely than other adults to use physician
referrals, fitness/wellness programs, and health education events. This information may provide valuable
insights to marketers onServices do they Use? reach quality-driven consumers. (See Figure 3.)
Utilization: What the best channels to use to
Healthcare 3: use OF eDucaTiONaL to General Population
FiguRe Facilities: Use of Services Similar seRVices sLighTLy higheR ThaN geNeRaL POPuLaTiON
12.0%
10.0%
8.0%
% of Consumers
Quality-Driven Adults: Yes
6.0% All Other Adults: No
4.0%
2.0%
0.0%
Health Care Info./Phys. Referral Fitness/Wellness Program Health Education Event Birthing Class Quitting Smoking Program
Source: HealthView Plus 2005-2006
exhibiTing behaviors: WhiCh healThCare behaviors do QUaliTy-driven ConsUmers exhibiT?
Despite the compelling similarities between quality-driven consumers and the general population in
terms of healthcare utilization, quality-driven consumers behave in unique ways. The following factors
were considered: physician selection and drivers in switching, hospital selection and drivers, willingness to
pay more based on doctor or hospital ratings, and confidence in hospital or doctor ratings sources.
Regarding physician selection, quality-driven consumers place more emphasis on physician credentials
and background than other adults. More than 20% of quality-driven consumers look at physician
credentials versus 10% of all other adults. Like all other adults, quality-driven consumers largely rely on
family referrals to primary care physicians, and primary care physician referrals to specialists.
Quality-driven consumers place a higher emphasis on advanced technology and research than other
adults. Conversely, physician recommendation, previous experience, and location are more important to
all other adults. Both groups continue to select hospitals primarily on reputation. (See Figure 4.)
Opinion: What are Key Attitudes?
FiguRe 4: QuaLiTy-DRiVeN cONsuMeRs PLace MORe eMPhasis
ON hOsPiTaL TechNOLOgy aND ReseaRch
Hospital Selection Drivers: Reputation and Information Dominate
40.0%
35.0%
30.0%
25.0%
% of Adults
Quality-Driven Adults
20.0%
All Other Adults
15.0%
10.0%
5.0%
0.0%
Strong Reputation Physican Most Technologically Previous Research Location Friend/Relative
Overall Recommendation Advanced Experience Recommendation
Source: HealthView Plus 2005-2006
6 Quest for the Quality-Driven Consumer
7. For hospital specialty care, quality-driven consumers are more interested in state-of-the-art
facilities, advanced technology, comprehensive care, and medical staff. Location is more
important to all other adults. These findings logically follow the previous findings that
quality-driven consumers place more emphasis on advanced technology, research, and
physician credentials and background. (See
Opinion: What are Key Attitudes? Figure 5.)
Specialty Hospital Selection Drivers: High Tech mostPReFeReNces
FiguRe 5: hOsPiTaL sPeciaLTy caRe Important
70.0%
60.0%
50.0%
40.0%
% of Adults
Quality-Driven Adults
All Other Adults
30.0%
20.0%
10.0%
0.0%
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Source: HealthView Plus 2005-2006
Quality-driven consumers also select hospitals by specialty. Specialization is highly
influential to quality-driven consumers, while it’s of no importance to the majority of other
adults. More than 60% of quality-driven consumers indicated that hospital specialty is
highly influential on their choice of hospitals, while more than 70% of all other adults said
Opinion: What are Key influence on their choice of hospitals. (See Figure 6.)
that hospital specialty has no Attitudes?
Hospital Selection Drivers: Specialization Highly Influential
FiguRe 6: QuaLiTy-DRiVeN cONsuMeRs seLecT hOsPiTaLs By sPeciaLTy
80%
70%
60%
50%
% of Adults
Quality-Driven Adults
40% All Other Adults
30%
20%
10%
0%
No Influence Moderate Influence High Influence
Source: HealthView Plus 2005-2006
Quest for the Quality-Driven Consumer 7
8. Quality-driven consumers express a greater willingness to pay more for highly rated providers than do all
other adults. Sixty-three percent of quality-driven consumers and 47% of all other adults are willing to pay
more for highly rated providers.are Key Attitudes?
Opinion: What (See Figure 7.)
How much more would you be willing to pay to use a higher rated doctor or hospital?
FiguRe 7: QuaLiTy-DRiVeN cONsuMeRs WiLLiNg TO Pay MORe
Quality-Driven Adults All Other Adults
> 50% More
> 50% more 2%
6% 25%-50% More
25%-50% More 3%
6%
10%-25% More
16%
Nothing
37%
10%-25% More Nothing
26% 53%
< 10% more
26%
< 10% more
25%
Source: HealthView Plus 2005-2006
In addition, quality-driven consumers trust quality organizations and quality rating Web
sites much more than all other adults. All other adults have a slightly higher level of trust
Opinion: What are Key Attitudes?
in health plans than quality-driven consumers. (See Figure 8.)
Hospital Rating Information: Higher trust in third parties
FiguRe 8: higheR LeVeL OF TRusT iN QuaLiTy ORgaNizaTiONs
40.0%
35.0%
30.0%
25.0%
% of Adults
Quality-Driven Adults
All Other Adults
20.0%
15.0%
10.0%
5.0%
0.0%
Quality Organization Quality Rating Web Site Hospital Health Plan
Source: HealthView Plus 2005-2006
Furthermore, all consumers are more likely to change hospitals than physicians for poor ratings. If shown
a low quality rating for their own physician, only 24% of consumers would switch doctors, whereas 57% of
all consumers would change providers if their hospital received a below-average quality rating.
segmenTing and TargeTing: WhaT are QUaliTy-driven ConsUmers liKe?
Generally speaking, quality-driven consumers are high-income, highly educated households that seek
healthcare and ratings information over the Internet. The ability to identify and target quality-driven
consumers depends on the appropriate use of a segmentation system that accounts for the key drivers of
consumers’ healthcare decisions. High income, Baby Boomer, and Generation X (ages 25-34) dominate
quality-driven consumers. Quality-driven consumer households vary by household characteristics and
appear to be disproportionately present in high-income adults and Generation X, regardless of income. As
the segments change in terms of age, from older to younger households, income becomes less important.
8 Quest for the Quality-Driven Consumer
9. Lower-income families have a low prevalence of quality-driven behavior. Quality-driven consumers are
notably less prevalent in lower-income adults over age 35 and single female households with children,
regardless of income. On a per capita basis, quality-driven consumers are more prevalent in the Sun Belt
region of the South and Southwest than the metropolitan areas of the coasts or Midwest, consistent with
recent population shifts. (See Figure 9.)
FiguRe 9: QuaLiTy-DRiVeN cONsuMeR POPuLaTiON DOMiNaTes suN BeLT
Quality-Driven Consumer Penetration
Quintile 1 — Highest Penetration
Quintile 2
Quintile 3
Quintile 4
Quintile 5 — Lowest Penetration
Top Quintile Penetration > 22.5%
Bottom Quintile Penetration < 13.6%
Source: HealthView® Plus 2005-2006
Collegiate and post-collegiate education is a key attribute of quality-driven consumers.
Twenty-five percent of quality-driven consumers have a college degree or higher, and 28%
of quality-driven consumers have household incomes of $85,000 or more per year. Quality-driven
consumers are also predominant in the African-American segment with an income
lower than $55,000. (See Figure 10.)
Education is a Key a Key aTTRiBuTe OF QuaLiTy-DRiVeN cONsuMeRs
FiguRe 10: eDucaTiON is Attribute of Quality Conscious Consumers
All Adults:
19.4%
Quality-Driven Adults
All Other Adults
Education: Education:
< College Degree College Degree or More
16.3% 25.1%
Income Education: Education:
Income:
< $55K: < Post-Grad Post-Grad
>= $55K
14.8% 23.3% 28.8%
Race:
Race: White, Asian, Income:
White, Native American Native American < $85K
13.8% 18.9% 22.8%
Race: Race: Income:
African American, African American, Other >= $85K
Asian, Other 26.7% 28.4%
18.1%
Source: HealthView Plus 2005-2006
Quest for the Quality-Driven Consumer 9
10. QUaliTy-driven ConsUmers: mosT-PeneTraTed hoUsehold segmenTs
In addition to age, income, and household composition data, the HouseholdView™ segmentation system
of HealthView Plus® is based upon similarities in healthcare attitudes, behaviors, and utilization patterns.
It is absolutely critical that a healthcare-specific segmentation system be applied. Regardless of which
segments are most prevalent, it is essential to understand how these segments are clinically relevant,
financially appropriate, and behaviorally responsive. (See Figure 11.)
FiguRe 11: MOsT-PeNeTRaTeD hOusehOLD segMeNTs: aNTiQueRs aND high sOcieTy
chaRacTeRisTics OF MOsT PeNeTRaTeD hOusehOLD segMeNTs
householdview U.s. Population- Quality-Conscious market size head of household household
segment 2006 Consumer household Composition income
Penetration age
Antiquers 19,743,000 25.4% 5,014,000 55-64 Married w & w/o Kids Upper
High Society 15,637,000 26.1% 4,081,000 45-54 Married Upper
Time to Travel 8,173,000 28.3% 2,313,000 65-74 Married w & w/o Kids Upper
Settling Down 7,579,000 23.9% 1,810,000 25-34 Married Upper Middle, Upper
Great Expectations 7,096,000 24.9% 1,770,000 25-34 Married w/ Kids Upper
Spa Goers 4,797,000 27.3% 1,310,000 55-64 Single Female w/ & Upper
w/o Kids
Enjoy Your Time 4,557,000 23.9% 1,087,000 25-34 Married Lower, Lower Middle
Made Her Way 3,931,000 25.0% 984,000 35-54 Single Female Upper
On Her Own 3,347,000 24.0% 804,000 35-54 Single Female Upper Middle
Quality-Driven Consumer Profile: Antiquers
• Between the ages of 55 and 64
• Married, with or without children
• High income
• Service utilization: Somewhat high for chronic and preventive services while average for outpatient and
alternative care services
• High propensity to research healthcare, research ratings, and use the Internet for healthcare research
• Do not view cost as a main driver when making healthcare decisions and are less likely to view hospitals
in their area as the same
• Media responsiveness: Average for traditional media (TV, radio, and print), direct mail, and non-
traditional media (Internet, physician office, friends and family)
Quality-Driven Consumer Profile: High Society
• Between the ages of 45 and 54
• Married
• High income
• Service utilization: Somewhat high for preventive services while average for chronic, outpatient, and
alternative care services
• Very likely to research healthcare, research ratings, and use the Internet for healthcare research
• Do not view cost as a main driver when making healthcare decisions and are less likely to view hospitals
in their area as the same
• Media responsiveness: Higher than average in terms of traditional media and direct mail
responsiveness, while average for non-traditional media
10 Quest for the Quality-Driven Consumer
11. QUaliTy-driven ConsUmers: leasT PeneTraTed hoUsehold segmenTs
Although the least penetrated household segments are far less likely to change providers because of
quality information, understanding this group is often useful for healthcare marketers. There may be
significant marketing and education opportunities for these least penetrated segments to discover the
power and value of provider quality information. (See Figure 12.)
FiguRe 12: LeasT PeNeTRaTeD hOusehOLD segMeNTs: cOuPON cLiPPeRs aND MaKiNg DO
chaRacTeRisTics OF LeasT PeNeTRaTeD hOusehOLD segMeNTs
householdview U.s. Population- Quality-Conscious market size head of household Composition household
segment 2006 Consumer household income
Penetration age
Carpool Moms 9,605,000 12.5% 1,198,000 18-34 Single Female w/ Kids All
No Frills 3,751,000 11.8% 441,000 45-54 Married w/ Kids Lower
Earlybird Specials 4,029,000 10.3% 414,000 75+ Married Lower
Coupon Clippers 4,694,000 8.8% 412,000 35-44 Married w/ Kids Lower
Making Do 3,995,000 8.7% 347,000 55-64 Married/Married w/ Kids Lower
Profile: Coupon Clippers
• Between the ages of 35 and 44
• Married with children
• Modest income
• Service utilization: Less likely to use preventive care services, average use of alternative services, and
higher-than-average use of chronic and outpatient services
• Strongly view cost as a main driver when making healthcare decisions and are somewhat highly likely
to view hospitals in their area as the same
• Less likely to use the Internet for healthcare research and average propensity to research healthcare
and ratings
• Media responsiveness: More responsive to nontraditional media, and average in responsiveness to
traditional media and direct mail
Profile: Making Do
• Between the ages of 55 and 64
• Married, with or without children
• Modest income
• Service utilization: Very likely to use chronic care services, somewhat highly likely to use outpatient
services, average utilization of preventive services, and less likely to use alternative services
• Less likely to use the Internet for healthcare research and have an average propensity to research
healthcare and ratings
• Significantly more likely to view cost as a main driver when making healthcare decisions and are
somewhat highly likely to view hospitals in their area as the same
• Media responsiveness: Significantly high level of responsiveness to nontraditional media, traditional
media, and direct mail
Quest for the Quality-Driven Consumer 11
12. Tailoring CommUniCaTions: hoW Can QUaliTy-driven ConsUmers be reaChed?
Quality-driven consumers strongly prefer the Internet as a source of healthcare information, with
55% ranking it number one. The second most preferred source, a private physician, was selected by
approximately 25%. Quality-driven consumers also have a uniformly higher response to all sources of
Communication: How to Reach Them
advertising. (See Figure 13.)
Type of Information: Internet is dominant preferred medium
FiguRe 13: QuaLiTy-DRiVeN cONsuMeRs PReFeR The iNTeRNeT
60.0%
50.0%
40.0%
% of Adults
Quality-Driven Adults
30.0%
All Other Adults
20.0%
10.0%
0.0%
Internet Your Doctor Your Info Mailed Med Paper/Mag Your Other Library Report Employer Telephone
Pharmacist To You Journal Hospital Healthcare Book Cards Info Line
Provider
Source: HealthView Plus 2005-2006
Quality-driven consumers are more interested than all other adults in all types of healthcare information.
Most report that the focus of the information sought is an understanding of conditions and drugs, not
provider information.
Quality-driven consumers trust quality organizations and quality ratings Web sites more than other
adults, with more than 30% of quality-driven consumers having a lot of trust in quality organizations,
compared with 20% of all other adults. Both groups trust hospitals only slightly more than health plans.
(See Figure 14.)
Quality Conscious Consumers Trust Quality Organizations
More Than Other Adults
FiguRe 14: MORe TRusT iN QuaLiTy ORgaNizaTiONs aND RaTiNgs WeB siTes
“From what sources would you have a lot of trust in hospital or doctor ratings?”
60.0%
50.0%
40.0%
% of Adults
Quality-Driven Adults
All Other Adults
30.0%
20.0%
10.0%
0.0%
Doctor Quality Organization Quality Rating Hospital Health Plan
Web Site Source: HealthView Plus 2005-2006
12 Quest for the Quality-Driven Consumer
13. reaChing QUaliTy-driven ConsUmers
One out of five adults is a quality-driven consumer who is interested in searching for hospital quality
ratings and motivated by these ratings to switch hospitals. Additionally, one out of two consumers is
interested in hospital quality ratings, but not yet motivated to switch because of these ratings. With the
increasing focus on transparency and sharing quality ratings, the four out of five consumers who aren’t
currently searching for ratings information may become more interested in quality ratings.
In the quest to find the quality-driven consumer, how should healthcare organizations target them? The
quest has revealed that the quality-driven consumer is a target group in which:
• Quality ratings matter
• Hospital technology and physician credentials make a difference
• Service specialization is important
• Population is concentrated in the Sun Belt
• Quality rating organizations and Web sites are preferentially trusted, followed by physicians
Healthcare organizations have an additional opportunity to provide quality information through
physicians and quality-rating agencies. One hallmark of success is the engagement of physicians in
developing how quality-rating postings and explanations are deployed.6 With detailed, refined customer
insights, segmentation, and targeting activities, providers and payers have a greater likelihood of an
intimate customer experience that leads to acquiring new customers and retaining existing ones.
Quest for the Quality-Driven Consumer 13
