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       Understand that the big box hospital is obsolete.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?”
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 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.