Healthcare is not like ordering a burrito… or is it? While the healthcare and restaurant fields can feel like distant cousins, our work at Continuum allows us to spot interesting connections across categories and sectors, driven by consumer values, market dynamics, and shifting business pressures.
We’re confident that these insights will help cook up true value for people working in the healthcare. Here are a few lessons that we are learning from the restaurant industry that we see transforming healthcare delivery.
Changing consumer values are transforming in the restaurant world.
In the food space, we’ve seen a dramatic shift from traditional values and expectations to the fluid socialization, sharing, and experimentation that characterize today’s dining experiences. When the restaurant category began to aggregate years ago, the currency of dining out was the classically structured meal (three courses, meat and two sides, etc.), food that made folks comfortable and value that made this experience doable. Many of our clients in the restaurant category recognize that times have changed, but aren’t entirely sure how that should affect their business.
Today’s diner reflects a new attitude towards food and dining. Food is not about consistency and comfort; it’s about exploration, bold flavors and freshness. Food is not just nourishment, it’s an experience. Food is an opportunity to stretch into different cultures, to connect with one’s community, to express one’s values and to message one’s personality. The eating experience is more fluid; it happens on-the-go, in shared dishes, with bar grazing, and in ways that often put the consumer in more control.
In the same way, we see values around health shifting. Insurance companies call Millennials “young invincibles,” describing them as the vibrant youngsters who don’t yet care about their health or engage in the system. What we see is that Millennials are actually quite health aware; they just think about and talk about it in different terms—and their engagement just may not be with the traditional system that our clients often reflect.
Whereas prior generations have segmented healthy activities from the rest of their lives, for Millennials the distinction is fluid. Health is not remedial; it’s wellness. Continuum’s Sean Brennan and Rose Manning, writing about healthcare and Millennials, say that “wellness” is a “little better” term than “health” but add: “Oprah’s been on that tip for years. (Besides, ‘wellness’ is for moms and Monday mornings, not Saturday night at a rager.)” They add today’s young people seek healthcare plans that will, among other things, help them decrease stress and make fiscal sense. In classic Millennial style, it’s an integrated view and approach.
Part of the food values that are front and center for today’s consumer is the need for transparency. Big Food—and the backlash against it—has taught us that commercially prepared meals have some unsavory origin stories. Organizations like Chipotle have earned (perhaps outsized) brand credit for the clarity they provide around their ingredients and preparation. Famously, marketing messages turned food souring from a corporate function into a heart-tugging differentiator, and more recent campaigns have focused on exposing the in-store food prep. Experiential touches like the open grills that sit directly behind the counter remind consumers of where that chicken comes from.
Big Food—and the backlash against it—has taught us that commercially prepared meals have some unsavory origin stories.
Transparency is not easy. We work with clients who have decades of legacy and back-of-house systems that have been honed for efficiency, not storytelling. Exposing the plumbing can feel risky and requires a rethinking of corporate values, staff roles, and operational flow. Yet we consistently see that these transparency cues bring benefit to the company. People believe Chipotle is fresh and therefore healthy. Somehow the 1,070 calories get lost in the shuffle.
In healthcare, the dissolution between back-of-house and front-of-house is framed quite differently, but roles are colliding and responsibilities shifting as we see the big push towards healthcare consumerization. Insurance product designs that shift cost onus onto the consumer, for example, are asking patients to be more involved in their healthcare decision-making. High-deductible or reference-based-benefits plans encourage higher consumer engagement in provider selection and cost assessment. It’s not exactly opening up the kitchen, but it does require the healthcare system to expose areas of its business that were previously behind the scenes and to consider how to do so in a consumer-friendly manner.
Take, for instance, Walmart's clinics. They offer annual visits for a flat fee. And Oscar Health's app and experience encourage members to check insurance coverage before seeing a doctor (eliminating gothca moments). Oscar’s user interface and language are known for providing transparency concerning the nuts-and-bolts of their plan coverage and how it works, and they also offer cost comparison.
Nearly every segment of the traditional restaurant industry is contracting. The exception is the extraordinary growth in the fast casual category.
Fast casual restaurants have carved out a space between quick service and casual dining, offering higher quality than fast food, in a format that is both lower cost and a better fit with consumer values and modes than casual dining. Players like Panera, Shake Shack, sweetgreen, and Chipotle are examples in this space.
The growth in fast casual coincided with the economic downturn of the late 2000s. While other restaurant segments saw their business waver, fast casual offerings appealed to consumers with an experience and product that provided the perception of quality at a lower cost than traditional sit-down establishments. And as the dining patterns that were introduced fit with consumer behaviors—the ability to customize and drive the experience, the flexibility and informality, the adaptability to a wide range of consumer types and modes—fast casual offered a new model in an industry that had been playing with the same formats for decades.
So too in healthcare, we see new models of care as innovation opportunities—and increasingly for established players, not just the healthcare radicals who are the field’s emergent leaders. When he started the Special Care Center with the casino workers’ union and the AtlantiCare Medical Center in 2007, Dr. Rushika Fernandopulle’s primary care practice was a reinvention of the model in nearly every way. It moved from fee-for-service to flat fee, reducing administrative burden while offering patients unlimited access to care. It shifted roles within the practice to enable more patient interaction and an unflinching focus on patient goals; health coaches outnumber physicians and they use soft skills and cultural connection to work with patients on their health needs. It narrowed in on the neediest (and most expensive) patients, demonstrating the value of this model with the people that traditional methods have struggled to reach successfully.
In recent years, the model that Iora Health pioneered has been recognized as transformative and effective; the organization closed $28 million in funding in January. Large players are exploring similar avenues. United Healthcare recently announced a subsidiary, Harken Health, that merges relationship-based primary care with health insurance. The experiential elements of the model are starting to feel familiar: an emphasis on access (multi-channel), a focus on wellness and health coaching, highlighting the depth of the relationship with care providers.
How Big Can the Conversation Become?
In an industry that’s balanced on shifting consumer values and behaviors and is threatened by new players, traditional restaurant operators are exploring ways to broaden their reach. Stretching beyond their historic boundaries, restaurants are looking at retail, licensing, catering, and take-out as opportunities to regain footing. The footprint is expanding as restaurants seek new opportunities to engage consumers, to create brand relevance, and to meet their consumer where they are eating.
Stretching beyond their historic boundaries, restaurants are looking at retail, licensing, catering, and take-out as opportunities to regain footing.
At the same time, the space is expanding; it’s not just about head-to-head battles amongst competitors, or binary decisions between cooking and eating out. The conversation and landscape is blending eating modes and creating opportunities to merge what were previously distinct perspectives. A fine-dining star makes terrific hamburgers for a few bucks a pop. Vegan fast food becomes a thing. Gourmet grocery shopping meets regional food. Cooking is a hybrid affair.
If we explore a similar premise with healthcare, it is worth considering who our competitors are becoming and to expand our consideration of what we are competing for. Healthcare providers are far from the only folks engaging people in a conversation around health. MinuteClinics and Target Clinics provide access to limited healthcare in a retail setting and offer their corporate parents with a way to deepen their connection with their consumer and to draw more traffic. Organizations from the Y to AARP are talking about health-related matters in a broader context, connecting wellness to purpose, finances, community, and family.
This has the potential to push traditional healthcare-delivery organizations back on their heels. Are you talking to your patients about their marriages, or just their medications?
Are you talking to your patients about their marriages, or just their medications?
The divisions of responsibility that we have built up over decades of reimbursement pressure and privacy concerns have put healthcare systems into a narrow corner of their patients lives—at a time when consumer values and behaviors are dissolving these walls.
It is time to consider how broad you (as an organization) and we (as an industry) want to make our conversation with patients and what right we have to do so. In the work that we’ve done at Continuum, asking these questions inspires an honest reassessment of brand, staff, structure, and strategy; it can shift the organization’s conception of the “problem” they are solving for people, from fixing a health issue to engaging in a person’s life more broadly.
This is not the healthcare system we’ve grown up in, but it is the one we are living in, even if we may not know it yet. It’s up to us to participate in the conversation our patients are already having. Let’s dig in.