Sunday, December 8, 2019

Hospital Price Transparency Equals Accountability and Healthcare Price Wars. Getting Ready Starts Now - Update.



In August, I wrote about the coming hospital price wars as pricing transparency becomes a reality in,  Here it Comes. The Healthcare Price Wars. Getting Ready Starts Now.” http://bit.ly/2YVZupj.

Well, we all knew that the lawsuits would be filed once the final regulations were put in place. Sure enough, in this past week, the suits were filed with a variety of reasons as to why accountability and transparency is a bad thing for hospitals and health systems. The image of Foghorn Leghorn is what hospital and hospital association public statements are looking like to the healthcare consumer. (Image courtesy of Looney Tunes and Merry Melodies.)

The best reason I read was a hospital CEO stating that it would lead to higher prices.  Why may you ask? Because when hospitals learn that others in their market are charging more than they are for some of the 200 common procedures, we will raise prices.

Really? Stop and think about that one for a minute. Mr. or Ms. Hospital CEO, do you actively want to be on the PR tsunami on that issue. Hospitals are seen as greedy overpriced providers with less than an ideal patient and consumer experience. But that is a post for another time.

I can understand why providers are trying to stop this massive consumer-focused change in the marketplace. Who wants to be accountable or be forced to show the hospital is clueless about why they price the way they do. The emperor has no clothes. But this is only a delaying action that will not stop the inevitable.

The time to get ready is still now, but with several new twists.

Marketing ready.

Getting marketing ready for price transparency or pricing war is not easy, but it is inevitable. It is no longer a question of if, but when.  But by taking the steps forward now, instead of hiding the organizational head in the sand, healthcare providers can get ahead of the price wars.

Don’t get ready for price transparency now. Don’t, and you will be found on the ash heap of healthcare consumerism.

Here are the marketing concepts for moving forward. Numbers 1-4 are new and other steps modified for clarity.

1.       Stop making grandiose statements about world-class care, Centers of Excellence, etc. For 40 years, hospitals and health systems have been making unsubstantiated quality claims. Consumers view hospitals like all are the same because of the endless and sometimes baseless claims. 
2.       Create stronger differentiation and consumer-focused messaging. Stop focusing on the look at us with these great facilities, high technology, etc., imagery and messaging, and start using the patient as brand ambassadors and patient testimonial marketing.
3.       Get ready for a new economic model for doing business.  I can already see the application of the pricing model that the airlines use. Think about what happens. A carrier raises its process for certain routes. The carrier than waits to see what the competition does. If the competition raises the process of airfares, it sticks. If the competition doesn’t follow suit, the fare increase is rolled back. Think about imaging in this model, for example. It would work you know. 
4.       Start the education of the healthcare consumer in your market about what pricing means. You can either use the time between regulation implementation and lawsuits to change the narrative in the consumer's mind to your benefit.  Either way, it is going to happen. So why not be the first. 
5.       Figure out your core service offerings. What pays the bills and keeps the lights on? If you will have to defend your core business in a transparent price market. Meaning the healthcare organization will have to make some painful decisions on strategy, focus, and market healthcare offerings. You can’t be everything to everyone. 
6.       Understand that the big box hospital is obsolete. One only needs the hospital for three things - acute complex medical care, emergency care, and intensive care. Everything else can be obtained in a higher-quality, lower-cost, and more convenient ambulatory environment, not hospital-based. Price wars will only make defending the hospital more difficult. 
7 .       Price transparency starts today, not when Modern Healthcare tells you it began. The hospital must shift from marketing random unrelated acts of advertising services and all about us stuff promotions or occasional newsletters to your primary and secondary service area. The new healthcare marketing is about price, convenience, access, and experience. 
8.       There’s an app for that.  Well, maybe not now, but you can bet there will be.  Pricing tools that will allow the consumer to shop for healthcare services by price are a click away. Think Kayak or Hotels.com. Maybe even name your price? 
9.       Market research. Better to know the needs of the market and how to price, rather than to think you know it all and can throw whatever you want out there for consumer consumption. Trust us doesn’t work anymore. It hasn’t for a long time now. 
10.   Prepare your Board, medical staff, and employees.  All hands-on deck is moving in the same direction, with the same message, at the same time. Can you say culture change? 
11.   You must become the market focused consumer-centric provider that you say you are. Most provider organizations aren’t, and I can prove it to you. I refer to a previous blog post that outlines the key indicators of what a consumer-focused healthcare enterprise functions. Based on research, it’s not an opinion piece but a blog post based on facts. It may be a few years old but still relevant today.  “What does a customer-focused hospital or healthcare enterprise look like?http://bit.ly/1Hy6O09 
12.   Be the first in your market. It’s not a question of if but when. Why not be the first?

Exciting times we live in, eh?

Michael is a healthcare business, marketing, communications strategist, and thought leader.  As an internationally followed healthcare strategy blogger, his blog, Healthcare Marketing Matters is read in  52 countries and listed on the 100 Top Healthcare Marketing Blogs and Websites ranked at No. 3 on the list by Feedspot.com. Michael is a Life Fellow, American College of Healthcare Executives. An expert in healthcare business and marketing strategy, digital marketing & social media, Michael is in the top 10 percent of social media experts nationwide and is considered an established influencer. For inquiries regarding strategic consulting engagements, call Michael at 815-351-0671 or email michael@themichaeljgroup.com. Opinions expressed are my own.


Sunday, August 11, 2019

Here it Comes. The Healthcare Price Wars. Getting Ready Starts Now.



Healthcare price wars? Price Wars? The look on Marvin the Martian’s face (image courtesy of Looney Tunes) says it all.

And much to the chagrin of healthcare provider leadership, who have managed to convince themselves that healthcare pricing is a black box so complex that the healthcare consumer won’t understand, is now an emperor with no clothes. That gross misconception sold to the unsuspecting patient and healthcare consumer after all these years is coming to an end.

You can scream and yell, all you want to my friends. File all the lawsuits you want to too. But sooner rather than later, price transparency and price accountability are coming to healthcare.

Oh, and saying that it’s a great trade secret in negotiations with payers to obtain maximum favorable reimbursement is just nonsense. Um, when the patient receives the EOB from their payer, I guess the “cat is out of the bag.” Your price is publicly known as well as the discounts, write-off, and other tangential pricing items.

And the healthcare consumer bitches about it too.

The time to get ready is now.

Marketing ready.

Getting marketing ready for price transparency or pricing war is not easy, but it is inevitable. It is no longer a question of if, but when.  But by taking the septs forward now, instead of hiding the organizational head in the sand, healthcare providers can get ahead of the price wars.

Don’t get ready or plan for it now, and you will be found on the ash heap of healthcare consumerism.

Here are some initial marketing concepts for moving forward.

1.       Figure out your core service offerings. What pays the bills and keeps the lights on? If you had to defend your core business in a transparent price market, the healthcare organization would have to make some painful decisions on strategy, focus, and market healthcare offerings. You can’t be everything to everyone.
2.       Understand that the big box hospital is obsolete. One only needs the hospital for a few things - acute complex medical care, emergency care, and intensive care. Everything else can be obtained in a higher-quality, lower-cost, and more convenient ambulatory environment, not hospital-based. Price wars will only make defending the hospital more difficult.
3.       Price transparency starts today, not when you are told it begins. That means your marketing needs to shift from those random unrelated acts of advertising services and the all about us stuff promotions, or occasional newsletters to your primary and secondary service area. The new healthcare marketing is about price, convenience, access, and experience. 
4.       There’s an app for that.  Well, maybe not now but you can bet there will be.  Pricing tools that will allow the consumer to shop for healthcare services by price are a click away.
5.       Market research baby. Better to know the needs of the market and how to price, rather than to think you know it all and can throw whatever you want out there for consumer consumption.
6.       Prepare your Board, medical staff, and employees.  All hands-on deck is moving in the same direction, with the same message, at the same time. Can you say culture change?
7.       You must become the market focused consumer-centric provider that you say you are. Most provider organizations aren’t, and I can prove it to you. I refer to a previous blog post that outlines the key indicators of what a consumer-focused healthcare enterprise functions. Based on research, it’s not an opinion piece but a blog post based on facts. It may be a few years old but still relevant today.  “What does a customer-focused hospital or healthcare enterprise look like?” http://bit.ly/1Hy6O09
8.       Be the first to your market. It’s not a question of if but when. Why not be the first?
9.       Pray. You’re going places you never thought possible. The jury is fraught with twists, turns, and danger. Be ready for the unexpected.

Exciting times we live in, eh? 

Michael is a healthcare business, marketing, communications strategist, and thought leader.  As an internationally followed healthcare strategy blogger, his blog, Healthcare Marketing Matters is read in  52 countries and listed on the 100 Top Healthcare Marketing Blogs, and Websites ranked at No. 3 on the list by Feedspot.com. Michael is a Life Fellow, American College of Healthcare Executives. An expert in healthcare business and marketing strategy, digital marketing & social media, Michael is in the top 10 percent of social media experts nationwide and is considered an established influencer. For inquiries regarding strategic consulting engagements, call Michael at 815-351-0671. Opinions expressed are my own.

Sunday, March 10, 2019

The Hospital Marketing Experience, a Forgotten Channel?

Let me repeat the headline a little differently.

Is the hospital marketing experience channel for the consumer and patient, given its importance as a first-touch experience and engagement opportunity, been forgotten? Given all that has been and continues to be written about experience and engagement, then why is there not more careful consideration, time, thought and energy not given to the hospital marketing experience?

Case in point.

I just had my annual physical with my PCP. Now given my age and history of being an ex-smoker ( I quit 22 years ago and have never looked back), even though there was no indication of vascular disease, she thought I was fruitful for me to have a vascular scan. Since there was no indication, my PPO would not pay. My good doctor referred me to a screening service that regularly provides discount vascular scans at a discounted cash price to drive business.

The service understands that in retail health, the most effective source of referrals will be the PCP. Fortuitously, that Sunday in my local paper was a $99 vascular scan offered by the health system in their hospital that I have been using along with my PCP, for the last 22 years or so.  So, since this is a cash expenditure out of the pocket of this healthcare consumer, I decided to call the toll-free number and take advantage of an entity that I knew.

And that decision, based on the advertisement for a service that I needed, optionally I might add, is where the marketing experience ended.

Makes you wonder why the health system hadn’t informed the PCPs and other admitters about the vascular screening (first experience fail).

I called the number which went to the system marketing call center. The number worked, so that was good. I proceeded to explain why I was calling because they were generally clueless (the second experience fail). I had to explain that I had been using the system for many years and wanted to take advantage of the offer. I also specified the location. Once they found the screening questions (the third experience fail), the operator, quickly rattled off the ten-digit phone number for central scheduling for no apparent reason to me, as there was no forewarning that I needed to write down the number, (the fourth experience fail).

It gets better still.

Now comes the cold transfer to central scheduling (fifth experience fail). I now must explain all over again why I was calling (sixth experience fail). Now the operator in central scheduling is surprised because this is supposed to be a warm transfer from marketing (seventh experience fail). Then instructs me to hang on because she has to search for the screening questions, I had already been asked and answered because they not readily available while informing me that she has never scheduled one before (eight experience fail). Better yet, I learn in the course of this no one has ever called to schedule a screening (ninth experience fail).

I did ask if this could be done in a more convenient location than the hospital and was told yes (first positive experience).  Then the experience went negative. No Saturday’s were offered. I couldn’t schedule for some unknown reason to the operator for Tuesdays, and only morning appointments were available (the tenth experience fail). We finally landed on a Wednesday a couple of weeks out so I could rearrange my schedule to fit their schedule (eleventh experience fail).

Now the second positive experience in all of this was that as a former patient of the health system, system, much of my information was already available and all I needed to do was confirm some of the detail.

I schedule the appointment and then hear a litany of pretest prep that I need to do with no email follow-up conforming the appointment or providing me with written information on what to do before the test (twelfth experience fail). Two days later, I receive an automated phone call reminding me about my appointment two weeks out (thirteenth experience fail).

The point of this exercise was to illustrate how important healthcare consumer marketing experience is. If you are going to play in retail healthcare. then you better get your CPG marketing skill set together and understand that it’s all about the consumer and nothing about you.

The marketing experience is most often the very first touch-point of a healthcare consumer’s interaction which the hospital or health system. You cannot afford not to get it right. Those days are long gone.


Michael is a semi-retired healthcare business, marketing, communications strategist and thought-leader.  As an internationally followed healthcare strategy blogger, his blog, Healthcare Marketing Matters is read in  52 countries and listed on the 100 Top Healthcare Marketing Blogs, and Websites ranked at No. 3 on the list by Feedspot.com. Michael is a Life Fellow, American College of Healthcare Executives, and a Professional Certified Marketer, American Marketing Association. An expert in healthcare marketing strategy, digital marketing & social media, Michael is in the top 10 percent of social media experts nationwide and is considered an established influencer. For inquiries regarding strategic consulting engagements, call Michael at 815-351-0671. Opinions expressed are my own.