“Insurer consolidation will continue as the regulators think buyers should have more power than sellers. The balance of power has permanently shifted to the buy side.” Anonymous Health System CEO.
In a very short but interesting piece, 5 Health system CEOs get candid about mega-mergers between health insurers, Becker’s Hospital Review, Molly Gamble, June 25, 2015, some very candid views were expressed. Though this comment applies to the insurers, this can easily be extended to the healthcare consumer and patient who are buying or already have insurance.
Healthcare consumerism is no longer an “it will happen someday”, but is a consequence of the SOCTUS ruling on ACA subsidies that brings this reality to the market place now. Through consolidation Insurers will drive prices down. Providers respond with mergers and consolidation in an attempt to create market power for negotiations. This in turn creates the probability of a vicious cycle that because of size and economic power; the insurer will probably always win.
It remains to be seen if the pricing concessions will be passed along to the healthcare consumer, who is the ultimate beneficiary. Rest assured that the Justice Department will be watching this closely and actively challenging the mergers and consolidations. But it’s foolish to hope that is the best line of defense for hospitals and health systems. They are not immune either. I think it’s interesting to note that the Federal Trade Commission is challenging hospital mergers and acquisitions, recently winning some cases and forcing the unwinding of the transactions.
Which brings us back to how you market to the insurer, healthcare consumer and patient is markedly different in a buyer’s market then what takes place now.
In this kind of environment the buyer is king and queen. It now comes down to price, quality, engagement and experience. In essence, what value does healthcare provider bring to all its segments be it insurer, healthcare consumer or patient. It’s really in many ways about accountability to the consumer’s of your offerings regardless of the segment they may live.
Moving forward with seven ways to respond in a buyer’s market with value
1. Brand and competitive position.
Consumers and patients are ready for transparency and convenient technology-enabled access to care. Healthcare providers that are capable of identifying meeting these needs and how they want their healthcare needs meet though technology focused on them, will gain new patients and the next-generation of physicians.
2. Engage existing customers and patients.
An individual is only a patient 1/3rd of the time they come in contact with you. That is during the diagnosis, treatment and recovery phase. Pre and post this experience, they are a healthcare consumer not a patient. So why then is it the only time one chooses to meaningfully engage them is during the period when they are a patient? Engaging the healthcare consumer on a continuous basis builds loyalty and importantly keeps them in network, which has some pretty significant financial ramifications in a risk-based reimbursement model.
3. Engage the physicians.
No matter the payment model the hospital or health system still needs a physician or physician extender’s order to get anything done in a healthcare setting. That means engaging physicians in meaningful ways, using the methods, technology and systems that will make their life easier, improve their productivity and protect or increase their income. An effective and efficient physician has more to do with the impact of cost and quality in the hospital than any other factor.
4. Focus on the physician experience.
How hard is it for a physician or physician extender to practice medicine in your organization? Have you looked at the hassle factor that physician’s encounter when they try to get things done in the hospital setting? Understand how the physician experiences your organization at every touch-point they encounter the hospital. Understand their experiences overall from beginning to end, not just in an isolated segment. Fix what is broken, keep what is working. The more satisfying the experience, the better you will do financially.
5. Focus on the consumer/patient experience.
A healthcare provider's ability to deliver an experience that sets it apart in the eyes of its patients and potential patients from its competitors - traditional and non-traditional - serves to increase their loyalty to the brand. One needs to actively manage the customer experience in totality by understanding the customer's point of view. That is, all touch points internally and externally that a customer/patient comes in contact with which in turn creates the experience. Exceptional experience means gains in market share, brand awareness, and revenue.
6. Embrace retail healthcare.
Traditional ways of delivering healthcare will go by the wayside in many cases. Price convenience, access and outcomes are the drivers in retail healthcare. Find the need, understand the consumer’s behavior drivers, design offering around the consumer not the hospital in a convenient location and price it appropriately. If you can't compete in this way market position, share and revenue will erode.
7. Turn to social media and networks to engage, manage the experience and drive adherence. As healthcare continues the evolution to a healthcare consumer dominated semi-retail environment, social networking is a healthcare marketing channel that is underutilized and under performs today, but holds great potential to improve engagement, experience and adherence. And that takes healthcare marketing leadership, executive vision and meaningful action.