The pandemic and uncertain economic times are affecting consumer decisions on how, when and where to spend their healthcare dollars
“The direction of tax-advantaged healthcare accounts for consumers has changed in the face of changing technologies, changing economic conditions, and the COVID-19 pandemic,” according to a new white paper from DataPath. “The past two years have changed our tolerance for risk, the way we assess and act on our needs, and our entire spectrum of buying behavior. For example, 8 out of 10 people say their buying habits have We are now focusing more on value-based purchases and buying online more than ever.Health care has been hit by a similar trend.
The DataPath researchers cite several key takeaway messages from their study:
- Consumers who have changed the way they manage their healthcare during the pandemic will likely retain these behavioral changes.
- Millions of consumers are trying to ward off serious illnesses and manage chronic health conditions using body patches, smartwatches, and similar digital devices. Nearly 1 in 7 American adults now own a smartwatch, and about 1 in 7 purchased their device during the pandemic.
- Clinicians maintain a lingering skepticism of digital wellness devices. Only 10% of physicians have integrated patient wearable device data into electronic health records.
- Consumers now view wellness as comprising six dimensions: better health, better fitness, better nutrition, better appearance, better sleep, and better mindfulness.
- Consumers are lagging in the adoption of mobile apps due to fears about the privacy of their health information. However, they are much more likely to use a health care app if it is specifically recommended by their provider or if they believe it would provide better insights into their health.
- While not specifically a response to digital healthcare, the rise in ICHRAs overlaps with the rise in consumer engagement with personal healthcare.
- One of the main reasons for the growth of lifestyle spending accounts, despite their after-tax status, is the lack of regulatory restrictions. This allows employers to address all six dimensions of wellbeing with a single benefits account and start the plan any time during the calendar year.
- Expenses eligible for reimbursement under existing tax-advantaged accounts – FSA, HRA and HSA – will continue to evolve in response to the growth of digital technologies.
Related: Unleashing the Full Potential of Digital Health Benefits for Employees
“When you look at the big picture, it makes for a fascinating conversation,” says Bo Armstrong, chief marketing officer at DataPath.