Thursday, March 25, 2010

The Future of Healthcare Marketing Under Reform

Why do we need marketing?

I can see it now, CFOs and other senior managers in hospitals and health systems around the country going … “Tell me again…why do we need marketing? After all by 2014, millions of uninsured will be insured. Sure we face reimbursement cuts, but we can weather that” and the conversation goes on……

Marketing will be more important than ever!

As we enter the brave new world of healthcare reform, several significant events will take place over the coming couple of years for which most healthcare organizations are not prepared for:

Value purchasing
Demand management
Consumer choice

What will be required is a refinement of marketing strategies, tactics, integrated messaging and excellence in execution for the brave new healthcare world. Marketing needs to be closely aligned with the organizational strategic, business development and financial plans

The new marketing environment.

Competition is not going by the wayside. It will only increase as more for-profit corporations with deeper pockets enter the market. Mergers and acquisitions will not go by the wayside either. As a matter of fact, I would not be surprised to see more mergers and acquisitions by healthcare organizations in preparation for 2014.

The most profound change due to reform is that you really no longer have patients. You have true consumers. The new “patient” is a consumer who is already or will be, price-savvy, quality-conscious, knowledgeable and demanding.

Hospitals have little if any experience in true direct to consumer retail marketing. I believe that reform finally takes the last step in commoditization of healthcare where people will buy on price and quality. The market equation going forward is BtoB, BtoBtoC and BtoC.

Strategic Marketing Plan, Tactical Marketing Plan and Flawless Execution.

You will need a strategic marketing plan leading to a tactical marketing plan for each of the following audiences that you must flawlessly execute. The market is a hash mistress and without these three components, you will find out how harsh the market can be. Your audiences are:

Insurance companies
Medicare and Medicaid
Legislators at the State and Federal Level
Your employees
Other health systems
Pharmaceutical manufactures*
Home Health agencies
Social Service Agencies
Community groups
Retail pharmacies
Ambulatory treatment centers i.e. infusion services

A little explanation about why pharmaceutical manufacturers as an audience is warranted here.

Over 600 drugs in the development pipeline are either infused or injected medications requiring medical administration that fall into what is known as the specialty pharmacy area. The cost of drugs and changes in insurance plans regarding physician “buy and bill” practices find very few physicians participating.

This leaves a market open to the Walgreens, Apria’s and others of the world who already have existing infusion centers and it can be assumed are planning to increase their presence in the healthcare market. Failure to enter this market in a timely fashion means you could be leaving potentially millions of dollars on the table to the likes of Walgreens and others who are refining and expanding those strategies and already have the pharma relationships that will give them access to these drugs.

Moving forward.

There will be more on healthcare marketing and reform going forward. But for now, a lot of work is needed aligning healthcare organizations and marketing departments to the new market under reform. That will require leadership, decisiveness as well as the ability to refine strategies and execute them flawlessly.

I can be reached directly at 815-293-1471 or for healthcare interim executive management, marketing strategy development, public and media relations, and crisis communications services

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