What does a customer focused hospital or healthcare enterprise look like?

 James Cullen, CEO of Conach Consulting and a former hospital CEO, asked me to consider writing an article which describes what a customer focused hospital or health system looks like, from a customer’s perspective?  The question from James was a result of the Healthcare Marketing Matters blog post, “Can healthcare providers become customer focused enterprises?”  http://bit.ly/1COdz7c .

The question was indeed fortuitous, as the news coverage this week in various hospital and provider focused news outlets,  reported that consumerism is one of the top concerns on CEO minds these days.

 But the answer to the question is not a simple as it may seem. There is no checklist of “if I do this and this, I will be a customer focused hospital or health system, and the healthcare consumer will think so too”. The answer to the question is really a two-part answer. And a hospital cannot arrive at the promised land of being a customer focused healthcare enterprise, unless it accomplishes part two of the answer. 

Part One- The Health Care Consumer

Think of one’s own experiences when interacting with a customer focused company.  One is engaged and highly satisfied. Interaction with the company in gathering  information is easy, accessible and clearly understandable across any of the platforms of my choosing.  The experience from first contact to last encounter is seamless, meaningful and totally integrated.  Proactive recommendations are sent and tailored to the individual healthcare consumer’s needs be that educational or preventative care. During the engagement process, trust is built and in the case of previous utilization, trust is reinforced and enhanced.  The brand promise is delivered every time. And most importantly as this is perceptual, there is an emotional connection that all that matters is “me”.  At no time do I feel or have an experience that’s it is all about the hospital and health system, making me secondary to what is taking place. The organization is responsive. Satisfaction scores exceed normalized standards.

A note regarding satisfaction. Because the healthcare enterprise may have high satisfaction scores, remember that it only measures the customer perspective during the process of care.  It does not measure external influences or needs. High satisfaction scores while important do not make a customer-focused enterprise. Satisfaction is only one indicator of customer centricity.  Satisfaction is a process that can be studied, manipulated, changed and improved.

Part Two- The Healthcare Enterprise

Sometimes, one must look at the lessons of the past to find the solutions of the future, as healthcare evolves into a retail medicine, consumer driven business model. So here is some reading homework:  MARKOR: A Measure of Market Orientation , Ajay K. Kohli, Bernard J. Jaworski, Ajith Kumar,  Journal of Marketing Research, Vol. 30, No. 4 (Nov., 1993), pp. 467-477, American Marketing Association; Harvard Business Review, “To Keep Your Customers, Keep It Simple”, Patrick Spenner and Karen Freeman, May 2012; And  McKinsey & Company, “The consumer decision journey”, David Court, Dave Elzinga, Susan Mulder and Ole Jergen Vetyik, June 2009.

Becoming the total healthcare consumer centric enterprise requires two things. First is an outward market orientation. The second is the culture and behavior to support across all levels of the organization the customer focused business model.

Customer centrisity in its pure and simplest form is really a matter of market orientation. “Market orientation refers to the organization-wide generation of market intelligence pertaining to current and future needs of customers, dissemination of intelligence within the organization and responsiveness to it.” (Kohli, Jaworski & Kumar, 1993.)

To become the consumer-focused healthcare enterprise, and there are 20 indicators in the MARKOR scale to measure market orientation, these three can be considered to be the most important first steps:

Intelligence Generation

1.    Meeting  with customers to understand current and future needs

2.    An in-house market research department or the availability of external market research resources

3.    The ability to detect changes in customers preferences

4.    Annual surveys of customer perceptions which is different than satisfaction measurement

Intelligence Dissemination

1.    Regular interdepartmental meetings on market trends and development

2.    Important developments within the market or with key customers  are shared quickly

3.    Regular dissemination of satisfaction and perceptual  data at all levels of the enterprise

Responsiveness

1.    Recognition of changes in customers product or service needs

2.    Alignment of product or service development efforts with customer needs

3.    Regular, interdepartmental planning to respond to changes in the business environment

4.    Responsiveness to customer complaints

5.    Making a concerted effort to modify products or services to fit customer needs

According to Walker Research and the Walker Index, these characteristics are some of the key differentiating elements of customer focused companies that are most likely to produce significantly better long term performance.

Systems to gather the intelligence to be an evolving customer focused healthcare enterprise are one thing.  Culture and behavior is another, and is more often than not, the potential stumbling block in hospitals and health systems becoming customer focused.

The culture and behavior of the healthcare enterprise influences and ultimately determines success.  Just because the healthcare enterprise completes one of more of the above, or a select few of the 20 MARKOR scale attributes, that in and of itself doesn’t make the healthcare enterprise customer focused. It only works if the culture and behavior of the organization is in alignment with the underlying organizational beliefs and values.

Customer centric organizational culture and behavior falls into four areas:

Senior management

1.    Committed to and takes action on being customer-focused

2.    Drives business and financial planning based on the needs of customers

3.    Utilizes  market data in decisions

4.    Business development  is externally focused on meeting the needs of customers

5.    Marketing is a member of the senior team, trusted and is involved in all decisions

6.    Has a high level of tolerance for change

7.    Accepts innovation and has some tolerance for failure

8.    Low tolerance for and eliminates “sacred cows”

Interdepartmental relationships

1.    Interdepartmental cooperation takes place at all staff levels

2.    Formal and informal connections to departments

3.    Openness to  ideas from other departments

4.    Focus is on meeting the needs of the customer

5.    Interdepartmental barriers to meet the needs of the customer are identified and eliminated

6.    Seamless hand-off of customers between departments

Organizational systems

1.    A balanced approach to organizational structure

2.    Market-based incentive structures that focus on long-term company health

3.    Low level of “office politics”

4.    Mechanism are in placed to share customer related data

5.    Continuous evaluation and training on organizational customer centeredness

6.    Strict standards regarding customer service competency skills for all positions

7.    All touch-points  of the customer experience are integrated and seamless

Organizational Culture

1.    Organizations core values are widely shared and intensely held

2.    Senior management establishes norms of customer focused behavior by their actions

3.    There is a culture socialization program for new employees

4.    Conveys a sense of identity

5.    People oriented

6.    Team oriented

7.    Outcome oriented

8.    Fosters behavioral consistency

Customer centrality  cannot be marketed into existence with campaigns and forays into the market with “customer-centric messages” or internal declarations of customer  focus.  Sooner or later the healthcare consumer will figure it out.  Employees will see it as the flavor of the day and wait it out until next grand leadership vision comes around.  As in a previous post, the customer focused healthcare enterprise is a way of life that permeates the hospital or health system with a singular focus. It is outward looking and responsive, not inwardly focused and unresponsive.

This is about changing the healthcare enterprises DNA.  The customer focused healthcare enterprise is hard to create and takes a lot of work. It’s not a box on a checklist and is not just satisfaction. But in the end, as healthcare evolves into a consumer centric retail market, it is the only way that the healthcare enterprise can survive. Cutting costs and going lean will only go so far in retail medicine.

Time to get to work and reap the rewards.

Can healthcare providers become customer focused enterprises?

There has been a lot of buzz this past week in industry publications, about hospitals and health systems seeing customer centricity as being a viable business strategy for growth and success.  It began with the American Hospital Association meeting, reported in the article Treating Patients as Consumers is a Growing Strategy, H&HN January 21, 2015, by Paul Barr.

But let’s expand the discussion from a technology and service development focus, to catch up with the market shifting to a semi-retail model of medicine, driven by market innovation and the influence of more sophisticated healthcare consumer, to what it means absent the innovation and hiring people from consumer focused retail industries.

What does it mean to develop and execute a strategy to treat patients as customers?

It’s not an easy question to answer.  I have worked for enough hospitals, health systems and vendors in leadership positions to live through the declarations of customer or even sales centricity. It’s more than hiring new talent. It’s more than just catching up and using technology more efficiently.  It is a whole lot more than declaring it’s all about the customer.

It all starts with the culture.

Customer centricity doesn’t happen overnight, especially in healthcare enterprises that have had an internal instead of external focus. It isn’t driven by technology, though that is a tactic and solution. It’s not just a one and done training program. It’s not a line in the business or strategic plan.

 It really starts and ends with the culture and focus of the organization.

An organization can not treat patients or the healthcare consumer as a customer, nor be successful in the endeavor, if the very soul of the healthcare enterprise leadership, focus and culture is not devoted to the customer.

It’s all about the healthcare consumer or patient. The only thing that matters is meeting the needs of the patient or healthcare consumer.  It’s not about the hospital or health system in many ways.  Focusing on and meeting the needs of the customer is the single most important trait and hallmark of successful companies. And that lesson I learned from working at Walgreens corporate. Walgreens is on to something when you look at a $76 billion plus international retail company, transforming into a health care company.

The singular focus on meeting the health care needs of the healthcare consumer or patient, or shopper for that matter, brings growth and revenue. Period.

Are you really ready to make that transformation? And I ask that question because in healthcare nothing is ever really new. I can remember from the 1990s when hospitals and health systems were throwing the words “patients as customers” around like they were M&Ms. So here we are and its 2015, still talking about customer centricity around the healthcare consumer or patient.

The healthcare enterprise can talk all it wants about treating patients as consumers. But unless it starts with the cultural transformation and a singular focus on meeting the needs of the healthcare consumer or patient, then all the technology, new hires, new clinical programs and delivery of care, is just another expensive undertaking.

The more things change, the more they stay the same I guess.

If hospitals had a golden age, then what does the future hold?

That assumes of course that hospitals had a golden age, which could probably be defined as the period from the introduction of Medicare and Medicaid, the explosive growth of employer sponsored healthcare and Hill-Burton.  I can remember the days when hospitals were paid 100 percent and even in some cases as not-for-profit hospitals received an additional 5 percent. Then came DRGs in 1983 and the world changed overnight. All followed by various attempts at changes in payment methodologies, new forms of insurance (think HMO etc.), programmatic pilots and on and on.

As with all things once the payment system was figured out, equilibrium was achieved and things went back more or less to how they were, abet at with lower revenues and profit margins for sure but a balance was achieved.  And really the incentives continued to drive the production of care and for marketing operations to make things “look pretty” and “put heads in the beds”.

Now the market has flipped like never before. Explosive disruption, innovation, entrants of nontraditional providers, legislation, regulation, payment models, technology, genetics, pharmaceuticals MHealth and the new healthcare consumer to name a few, creates a market environment that hospitals have never ever existed in.

ACA is the fundamental underlying driver for all of today's changes in the industry and markets. As an unintended consequence, healthcare markets are moving in a semi retail, consumeristic direction focused on accountability for price and quality. Directly or indirectly, these changes bring the healthcare consumer into the discussion, by the economic force of the market resulting in the healthcare consumer being accountable for a growing signification portion of the cost of care. With the healthcare consumer now paying more out of pocket, the result is a consumer engaging in shopping behavior on price, whether it is for insurance or care. Quality as of yet is not a determining factor, For years healthcare providers have all touted high quality care without the attendant proof points, that a consumer could use to judge these statements as being true or not.  Hence, healthcare providers are seen as equal in the provision of quality, even when the case may not be true due to lack of transparency. As more and more information is released as a result of the market movement encouraged by ACA, the healthcare consumer will begin to engage in more sophisticated shopping behaviors.

ACA has opened the door for disruptive innovation that focuses the light of attention on the healthcare consumer and meeting their needs.   Meeting their needs in the most convenient, accessible, effective and price efficient manner possible. 

At some point in the future, the hospital will flip from being a revenue center to a cost center. When that happens things will get really interesting, considering the billions of dollars in debt on the balance sheets of hospitals today. Lots of debt service out there. Could that be the next financial crisis?

So where does that take the hospital of today?

Not anyplace pretty but that doesn’t mean all hope is lost. Unless of course the hospital, instead of circling the wagons engaging in strategic planning and marketing like they always have, changes focus from an internal perspective of siege and “it’s all about us”, to an external market focus that embraces innovation, retail medicine, meaningful engagement and the growing power of the healthcare consumer. Look externally not internally for answers.

Let me be clear, the hospital is not going to go away but may in all likelihood be relegated to the setting of the place of treatment of last resort. The consumer with all the information now available on price and quality is pulling the curtain back on the wizard and they are not happy. The market reality is healthcare that is affordable, innovative, and accessible when and where they want it, conveniently delivered on their terms, efficient, effective and is “all about them” is the new business model.

It is a massive undertaking to shed years of cultural attitudes and organizational arrogance to change a slow moving organization into a nimble, consumer-centric, effective and efficient, innovative healthcare enterprise. But with some hard work, grit and determination along with changes in the prioritization and deployment of capital both human and financial within a hospital, it is possible. These steps are not all inclusive but represent movement in the direction.

1.     Start with an honest data driven market assessment of the brand and brand architecture, brand perceptions, brand promises, awareness etc,  market share, competitors, pricing, outcomes, in and out service migration, consumer attitudes, preferences and needs.  Move the discussion from I think, which when the discussion is around “I think”, everybody is right because its opinion, to a data driven discussion.

2.     Decide what the healthcare enterprise position in the market is and what it should be.  There are only three market positions one can take superior, equivalent or inferior.  And there is only one of three sub positions you can take to dominate. The healthcare enterprise is the low cost leader (think Walmart), the service leader (think Disney) or the quality leader (think Mayo or the Cleveland Clinic). Pick one, set meaningful benchmarks for the other two, but focus the healthcare enterprise on one. The days are over where the healthcare enterprise can be all things to all people.  The result of that thinking and behavior leads to too much diffusion of organizational resources which is inefficient and ineffective. It also represents the thinking and actions of the past.

3.     Stop marketing from making things look pretty and turn it into revenue driven operation, which is resourced appropriately in terms of capital and human. Hold marketing accountable for driving growth.  Elevate marketing to the senior table and position within the organization. From healthcare consumer to patient engagement, program development and launch to organizational strategic, financial and business planning, marketing needs to be in every discussion and bring the viewpoint of the market, the healthcare consumer and patient with them.

4.     Embrace retail medicine and innovation. Look critically at all the healthcare enterprise does and ask one simple question, what is it that I do today, that can be done more efficiently and effectively, is priced lower, more convenient and accessible for consumers and provides better quality and engagement by nontraditional entrants into the market. Assume that everything the healthcare enterprise does can be replaced by someone or something else. Doesn’t matter if the replacement is MHealth, pharmacological, care innovation, or technological to name a few. Figure it out and start looking for directions to move in.

5.     Change the team. The skills and leadership needed to compete in today’s market to not only survive but grow, may not exist in the healthcare enterprise. From Soichiro Honda, Founder of the Honda Motor Company is this wisdom, “If you hire only those people you understand, the company will never get people better than you are. Always remember that you often find outstanding people among those you don’t particularly like.”  Stop hiring people to do the same things the healthcare enterprise has always done. Start hiring people who have experiences in other industries that are transferable or have the breadth of experience across different healthcare verticals that look in on the hospital industry.  One may be surprised how their view of what the healthcare enterprise does and how it’s perceived can be eye opening. It can lead to innovation and change.

6.     Be flexible, adaptable, driven by change and the needs of the healthcare consumer.

Focus externally, not internally and the healthcare enterprise will find that world is full of exciting possibilities and growth.

How can a hospital start the social media effort?

Social media is here to stay, and is becoming an ever increasing focus of the healthcare consumer in searching out hospital and health care information.  As the healthcare consumer becomes more adept at using mHealth, informational web sites for price and quality data,  Facebook, Yelp, Twitter and other outlets, the trend for  hospitals not playing effectively,  or engaging the healthcare consumers in social media is lost market share and revenue.  It’s a straight line to the bottom line by not engaging in and meeting  the informational and communication needs of the healthcare consumer.

So where to start?

I say start from the easiest and move progressively forward into more sophisticated social media platforms.  It would be easy to bite off more than one can chew in social media. After all, with the availability of more than you can imagine social media outlets, an organization could pick too many the first time out and fail at all of them.

The most important point, and I really cannot emphasis this enough, is that social media is not a mechanism for being a billboard for the healthcare enterprise programs and services. Social media is a platform and medium to engage the healthcare consumer in order to create a meaningful dialogue. A dialogue that is transparent, meets the healthcare or patients needs, provides meaningful information and enhances the experience and brand of the hospital or health system. It is focused externally and not internally.

With that in mind, let’s start about what not to do. Sometimes a negative can be used as a positive learning experience.  By way of storytelling, here is the lesson for today.

There was a hospital that will remain nameless, that I was following on Facebook. It wasn’t the most engaging or enjoyable experience.  The hospital postings were all about them. Nothing about the value brought or even the reason why a healthcare consumer or patient for that matter would actively engage with the hospital. 

The crowning moment came one day when the hospital marketing department posted a picture of the marketing staff, standing behind a table full of marketing communications award trophies for various campaigns and activities.

Really? And the point of that Facebook post was? I hate to tell one this, but the healthcare consumer doesn’t care.  

When starting a social media program to engage the healthcare consumer, try to control the organizational impulses. Postings like this only devalue the brand and make the healthcare enterprise look foolish.

Now it’s time for what to do.

These six steps taken sequentially can get the hospital started in social media. As experience and expertise builds you can expand.

1.    Understand organizationally that social media is alive. It is not static and unchanging. Social media platforms change and evolve on a constant basis. This means the organization has to monitor to see what people and competitors are talking about and sharing. Build internal support and educate the entire healthcare organization.

2.     Do the market research. If you don’t know what social media platforms the healthcare consumer and patients are engaging in, then how can one decide what social media platforms to choose?  Know the audience. Know the markets. Know what information the healthcare consumer is searching out. Know what social media platforms they use to gather information and engage. Secondary research may give one clues in how to proceed with primary market research in the hospital service area, but these are guides only.

3.     Build a social media plan that is integrated into the overall marketing plan and strategy of the hospital or health system. Include in your plan, goals and objectives, key messages, engagement strategies. How it will be measured and evaluated and who is responsible for executing the plan. What gets measured gets done. Obtain executive by-in. If leadership does not support the plan or is not engaged in the effort, stop now and go find something else to do.

4.     Don’t boil the ocean. An organization has to build capacity, experience and expertise in social media.  Start with one platform. Be the best you can be on that social media platform and then expand and add capacity. Learn what the healthcare consumer likes and doesn’t like. Test messages. Test engagement strategies.  Fail fast and become the learning organization and not repeating the same mistakes.

5.     Focus on four platforms in the beginning- Facebook, Twitter, Instagram or Pinterest and Yelp. Two to engage, one to manage reputation, and one to post pretty facility and technology pictures.

6.     Engage and build a meaningful relationship with the healthcare consumer. Stay away from meaningless fluff and anything that looks like it’s all about the organization. And listen. Listen very carefully to what is being said in social media and responds accordingly.

The market is changing faster than the hospital. As the curtain is pulled back to see the wizard, the healthcare consumer is not happy with what they see. Use social media to engage and manage the healthcare enterprise message.

Really? The hospital doesn’t do social media?

Imagine my surprise when I heard some hospital senior leadership types make the statement that "the hospital does not do social media". And proudly I may say, as if it’s some badge of honor. That kind of leadership points to a healthcare enterprise that has hunkered down with self imposed barriers, unable to effectively understand the nature or respond appropriately, to business model changes required in today’s healthcare environment.

I do predict that their future unfortunately, will be one of merger, closure and leadership unemployment.  Not because they don’t “do” social media, but because it is a failure of leadership, of vision and of innovation, that when combined with a rapidly evolving health care market that is consumeristic in nature, is deadly.

Okay the rant it is over.   Let’s look at why healthcare leadership in hospitals needs to have an effective and measurable social media strategy; plus tactical plan in place. This is just not about attracting the Young Invincible, or the newly insured or Medicare population. It’s about your strategy to build the brand, engage healthcare consumers and patients, manage your reputation and grow the healthcare enterprise. Remember that growth is good.

How about we start with some statistics on Silver Surfers, a key demographic for those in the health care business? I would sooner engage in a discussion around facts and not opinion.  When discussions are based on opinion everybody is right.

Silver Surfers are moving right on past the hospital, to wit:
1 in 5 twitter users is over age 50
53% of Americans over age 65 use the internet
Of that 53%, 70% use the internet daily
48% of seniors 65+ own a desk top computer
63% of adults 50- 64 own a desk top computer
77% of adults aged 50-64 use the Internet
1 in 3 seniors uses social media
49% of seniors online have a Facebook account
18% of Twitter users are over age 50 
Source: accredited-online-college.org 2014

And

In just case this is a just a “oh really”, then from this social media infographic: 41 percent of patients say social media affects hospital choice courtesy of healthcarecommunications.com.   This is really astounding when you consider the financial implications. Even better in the report was that 60 percent of doctors saying social media can improve the quality of care. One in two adults uses their smartphone to look up health information as well.

  

So who does the healthcare consumer trust in social media driven health information and content?  Doctors are first and that is no surprise at 60 percent. Nurses are in second place at 56 percent. Hospitals come in virtually tied with nurses at 55 percent.  Only 46 percent of people trust health information from patients they know.  And if they don’t know you as a patient, that trust drops to the bottom of the trust well to 25 percent. Most interesting is that the trust factor for the top three is really only a few percentage points difference.

When this information is combined with the Mayo Clinic survey  “Health Care Social Media List,” Social Media Health Network,  the statement “We don’t do social media?” is borne of a lack of knowledge, vision and leadership.

The point of all this, is to help leadership in hospitals and health systems, have rational fact-based discussion on the impact of social media on the business strategy. Social media does affect the overall hospital, its marketing strategy and positioning of the organization. It can have an effect on healthcare consumer and patient engagement. It influences reputation. It can shape the brand. It can influence revenue.

This is 2015 not 2000. The health care market marches on in becoming a semi-retail model, driven by innovation and healthcare consumer choice.   And hospitals are falling further behind each and every day.

Happy New Year