There is a subtle but important market shift developing healthcare. And it's really a result of the growing healthcare consumerism movement I wrote about last week. That is the "patient" who is evolving into the healthcare consumer is making healthcare choices based on cost.
Look, I get that we don't sell widgets. And as much as we decry and bemoan anybody that dares to bring up the subject of price, consumerism and patient dominated decision-making and choice in healthcare spawns from the devil himself, the fact remains that the "patient" is becoming a healthcare consumer and making choices based on cost. You can't ignore it, or hide your head in the sand anymore because it's not going away.
Here's some of the evidence:
(I receive no payment, nor have any contractual of relationships with the following aforementioned companies.)
Aetna's easy-to-use, out-of-pocket payment estimator. Simple really, know the cost of a test, visit or procedure; know what it will cost you out-of-pocket. But it doesn't stop there, it allows the healthcare consumer to compare the cost across multiple in-network providers. You can compare costs across 10 different hospitals and doctors. Choose the one that is the lowest cost and has the lowest out-of-pocket expense.
WellPoint through its AIM subsidiary has shown where it was possible to incentivize physicians and plan members to shop for radiology services and choose the lowest cost provider. It's reducing healthcare costs; while maintaining quality.
United HealthCare, though its Innovation Center, is empowering its clients and 70 million members across a broad array of data driven products and services, for the healthcare consumer to better understand their healthcare utilization, and make cost effective choices.
In the Wall Street Journal article on Friday, March 1, 2013, "Another Big Step in Reshaping Healthcare", research is showing the consumer buying insurance will accept a narrower network of hospital and physicians, if the cost differential is at least 10 percent lower than the cost of the broader and larger healthcare network with more choices. Models are showing that price and cost will be a big driver in consumers choices of plans.
Forget the quality argument.
Just because you charge more doesn't mean you have higher quality. Saying you have high quality with high cost when you are unable to differentiate yourself in the market because you won't use outcomes data, is a claim that falls on deaf ears. Quality is now a given. It's a prerequisite of the business.
So now cost rears its head in the healthcare consumer's decision-making process. And when all other things are equal in the mind of the consumers, cost is king. Quality is assumed. Caring is assumed. It's what you do.
Most healthcare organizations aka hospitals, have never really had to deal with the cost equation on a competitive basis. For insurance, medical device, pharma and other suppliers to healthcare, price and cost competition has been a requirement in their markets since the beginning of time. Now, doctors, hospitals, and others will need to change their marketing operations and begin to deal on cost. Your brand and quality take on new meaning when cost is influencing choice and is a critical component in the healthcare consumer decision-making process. High cost, undifferentiated quality won't sell.
What to do?
Value marketing and measurable quality outcomes marketing together not separately, can influence the cost-conscience healthcare consumers choices.
Value marketing really, is making the case to your healthcare consumer how you are solving a problem, offering a solution, giving results and even making them happy. Value marketing is a creative exchange between people and organizations in the marketplace. It is a dynamic transaction that constantly changes based on the needs of the individual vies a vie what the healthcare organization has to offer. You are answering the consumers value equation by answer their question, what is my ROI for using you. Answer that successfully and cost becomes a lesser issue.
In quality outcomes marketing, you become the transparent healthcare organization. You differentiate from other high-cost providers along this important dimension of choice. It doesn't hurt either if you can show how higher quality actually reduces the cost of healthcare. This of course assumes that your outcomes justify the cost of your services. And oh by the way, it's not just throwing out a third party logo on an advertisements and saying we have high quality.
Healthcare consumer cost will be coming to the forefront in 2014 and will greatly influence a healthcare consumers choices of where to purchase care. Your answer is value and outcomes marketing. But for you, value and outcomes marketing starts today not in 2014. By then the horse is already out of the barn and it's too late for getting them back in.
Michael Krivich is an internationally followed healthcare marketing blogger with over 5,000 monthly pages views in over 52 countries worldwide on Healthcare Marketing Matters. He is founder of the michael J group, a Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association. Like me on facebook at the michael J group, and connect with me on LinkedIn, Twitter and Pheed.