Last week’s blog post “Is retail healthcare all about the price? And can the hospital compete? http://bit.ly/1r4e6Rh” engaged a number of individuals in various forums on LinkedIn and elsewhere. All most interesting discussions and some common threads became apparent. Thoughtful posts with varying views about the place and role of non-traditional providers if any, regulation, quality and professional level of experience and training of medical professionals. Of course there were some snarky comments with the expressed sense of entitlement by the hospital or physician scoffing at the developments.
But in all of the discussions, little thought was given to the continuation of the trend of innovation in the delivery of healthcare services and what it could eventually mean for the hospital, besides lost revenue. One cannot combat the trend of innovation, especially from non-traditional retail providers who have deep knowledge and systems in place, to uncover and meet the needs of a consumer at a reasonable price.
Did we bring this upon ourselves and how do we reclaim the advantage?
We haven’t asked the right questions. Maybe we even thought to ourselves stemming from a sense of entitlement, that innovation in service delivery and price was unnecessary? Could be because we really were not in tune with the needs of the healthcare consumers or the ones paying the bills? But I attribute it as most likely because healthcare marketing has been more about marketing communications than about market research, product, price and place. Which in my opinion could have provided the early warnings and trends about a changing market dynamics and developments that could be capitalized upon before others.
Now a great backlash of disruptive innovation that keeps the hospital at the bottom of the food chain is accelerating. And guess what, the venture capitalist, private equity guys and the people innovating the in the delivery and price of care to meet the needs of the newly minted healthcare consumer, really don’t care what the hospital thinks. As one private equity person I know put it, “it’s like shooting fish in a barrel”. Scary really.
What to do?
1. Take stock and ask the hard question: What is being done in the hospital that can be done more efficiently and less expensively outside? How much revenue is at risk if that service disappears?
2. Take a good hard look at the marketing philosophy, structure, capabilities, accomplishments and personnel. Fix what is broken. It’s hard and not easy by any means, but it has to be done.
3. If not already in place, develop a business intelligence system that looks outside of the hospital at the market that identifies, tracks and disseminates information around developments etc.
4. Get a private equity person or venture capitalist on the Board of Directors. An organization needs new and fresh insight on the healthcare market that just won’t come from community members or the good old boys club.
5. Invest in innovation in your organization and create the organizational structure that allows innovation to take place. A Chief Innovation Officer is needed. Hire from outside the organization.
6. Stop circling the wagons! That stifles innovation and creates a siege mentality in the organization. Embrace change not status quo.
7. Invest in marketing not marketing communications.
8. Learn the lessons of disruptive innovation from others industries. They can provide valuable learning’s, trends and directions.
9. Lead don’t follow and expect the unexpected.
10. If one can’t do any of this, then maybe it’s time to find something else to do.
There are more but one gets the gist of the conversation. The healthcare innovation train has already left the station.