Showing posts with label #price. Show all posts
Showing posts with label #price. Show all posts

Tuesday, January 5, 2021

When Patients Begin Searching for Hospital Price Information, what is Your Response?

Beginning on January 1, 2021, patients should be able to search a hospital or health system website for the prices on 200 standard procedures. Mandated by CMS in 2020, the purpose was to provide a measure of price transparency for patients and consumers when seeking medical care.

Image by Niek Verlaan from Pixabay 

What happened?

In randomly searching the internet on hospitals and health systems websites for pricing information, I found a confusing maze of information.  In all cases, the ability to find and search the information was difficult at best. I know my way around a website, search terms, and the internet as a healthcare provider and vendor marketing professional.  If I have difficulty finding, searching, and using the information to decide, how is a consumer or patient?

Kudos to any hospital or health system that provided an experience that made the information easily accessible, searchable, and user-friendly.

I am sure that over time with prodding from CMS, the ability for a patient to search for a hospital or health systems website for pricing information on 200 standard procedures will improve and be easier to find, more user-friendly, with a better user experience.

Price transparency and a good user experience is not a question of if but when.

Image by Free-Photos from Pixabay

How is the healthcare organization preparing for the eventuality?

In answering the question, there are four strategic dimensions for managing the patient's price search for consideration. 

1.       Marketing Plan - How are you positioning the hospital and the newly available price and shoppable services information in the market, i.e., what the detailed marketing plan? 

2.       Engagement Plan - What are your key messages that need to be delivered to patients and the community? What channels- digital, social, and traditional will be used to provide the key messages? 

3.       Experience Plan - What are the training programs and Q&As created to equip the employees who will most likely face questions from patients and the community regarding your prices and shoppable services? 

4.       Crisis Communications Plan -What are the talking points you will use to defend higher prices in services than your competitors? What are your talking points when you decide to raise your lower process to those of a competitor?

These four dimensions of the patient price information puzzle are not an afterthought. They should foster a much-needed critical strategy discussion and tactical marketing execution in the age of price transparency.  As much as we would like, patient pricing information cannot be left to the "we'll deal with this if any questions come up" strategy, because we made it so difficult to find and use.  Pricing and shoppable service information is becoming a strategic imperative that is an essential part of the organizational, business, financial, marketing, patient engagement, and experience plans.

If it's not, then don't talk about how patient or consumer-focused you are; either walk the talk or don't talk.

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 is listed on the 100 Top Healthcare Marketing Blogs & 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 marketing strategy, digital marketing, and 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, you can email me at michael@themichaeljgroup.com. 

Connect with me on Twitter, LinkedIn, Facebook, Tumblr, Instagram, Pinterest, TikTok, Flipboard, and Triller.

Signup for the e-newsletter Healthcare Marketing Daily and have the latest healthcare marketing and business news for providers and vendors delivered right to your mailbox daily. Add your email address in the signup on the sidebar.

For more topics and thought leading discussions like this, join  Healthcare Marketing Leaders For Change, a LinkedIn Professional Group.

The opinions expressed are my own.

Monday, December 21, 2020

Welcome to 2021, Where Patients Become Price Buyers- Seven Considerations for Hospitals

 

Image by Engin Akyurt from Pixabay

Patients as buyers are no longer an "it will happen someday," but a market reality come January 1, 2021. Signs are apparent that market power is shifting from the hospitals as the dominant seller controlling the relationship to the patient as the chief buyer. The CMS January 1, 2021 mandate of the 200 searchable standard procedures with prices on the hospital website will allow the patient more control.

In this kind of environment, the patient is king and queen. The hospitals' position in patients' minds will be an amalgamation of expectations and experience along the dimensions of brand, price, quality, experience, and engagement. Why? Because hospitals and health systems have little differentiation.

Image by djedj from Pixabay

A hospital is a hospital, is a hospital.

What value does the hospital or health system bring to physicians and patients? That is the question at hand. And in a buyers' market, it's the only question you can answer successfully. In many ways, a hospital service buyers' market is about the accountability of your offerings' for patients and community regardless of the demographic or market segment they reside.

To respond appropriately to a buyers' market, hospital marketers need to dramatically change their approach and techniques.

Moving forward with seven considerations to respond to a buyer's market

1. Brand and competitive position. Patients are ready for transparency and convenient technology-enabled access to care. Healthcare providers capable of identifying these needs and how they want their healthcare needs met through technology will gain new patients and next-generation 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? Continuous patient engagement builds loyalty, and more importantly, keeps them in your network, which has some pretty significant financial ramifications in a risk-based reimbursement model.

3. Engage physicians. No matter the payment model, the hospital or health system still needs a physician or physician extender medical 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. Improve 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 physicians encounter when trying to get things done in the hospital setting? Understand how the physician experiences your organization at every touch-point they meet 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 patient experience. A hospital's ability to deliver an experience that sets it apart in the patients' eyes and potential patients from its competitors - traditional and non-traditional - increases their loyalty to the brand. One needs to actively manage the customer experience in totality by understanding the customer's point of view. All touchpoints internally and externally that the patient encounters, which create the experience, need to be actively managed. Exceptional experience means gains in market share, brand awareness, and revenue.

6. Expand retail healthcare. Traditional ways of delivering healthcare are going by the wayside. Think of the hospital system as a distributive computer network. Price convenience, access, and outcomes are the drivers in retail healthcare. Find the need, understand the patient's behavior drivers, design the offering around the patient, not the hospital, in a convenient location, and price it appropriately. Oh, and name it correctly; think will the patient understand what you do from the name and not something opposite. If you can't compete in the market in this way, the last one out can turn off the lights.

7. It's an omnichannel world. With the healthcare consumer living in an omnichannel world, turn to social media and influencer networks to engage, manage the experience, drive loyalty and referrals. As healthcare continues evolving to a consumer dominated transaction in a semi-retail environment, social networking is a healthcare marketing channel that underperforms. Go where the patient is, not where you want them to be.

Seven steps for hospitals to achieve market and revenue growth in the new buyers' market. Not an impossible task, but one that does require focus and a willingness to break from the past.

Welcome to the age of the patient as a buyer.

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 is listed on the 100 Top Healthcare Marketing Blogs & 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 marketing strategy, digital marketing, and 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, you can email me at michael@themichaeljgroup.com. 

Connect with me on Twitter, LinkedIn, Facebook, Tumblr, Instagram, Pinterest, TikTok, Flipboard, and Triller. The opinions expressed are my own.

Signup for the e-newsletter Healthcare Marketing Daily and have the latest healthcare marketing and business news for providers and vendors delivered right to your mailbox daily. Add your email address in the signup on the sidebar.


Sunday, June 19, 2016

Seven Steps for Dominating the Five Healthcare Markets

Simplify your focus during these turbulent times and focus on five primary markets you need for success. Population health will come as will risk and value-based contracts as the tipping point away from fee-for-service draws closer. But, by having a laser-like focus today, will position the hospital or health system for a better tomorrow. The five markets are Commercial; Exchanges; Medicare; Medicaid; and Uninsured.

The new dynamic added to this change is the evolution of the broader healthcare market into a consumer-centric, semi-retail market existing in a multitude of reimbursement schemes, each nuanced for a different market segment. Leading to the question, have you identified from a marketing perspective immediate actions to improve market position and revenue generation? 

Don’t necessarily at this point think about massive advertising campaigns, gimmicks, wellness programs, etc. It’s more about getting the basics right, understanding who pays for what and how that matches with the needs of your healthcare consumers. Marketing today, is not only driving demand but managing demand by moving the health care consumer to the right setting, which may not be the hospital or a hospital-based outpatient service. In some circumstances, it may even mean de-marketing certain services.

Very quickly then, here are seven ways to improve your market position, generate revenue and dominate categories of service.

1.  Brand and competitive position.
Consumers and patients are ready for convenient technology-enabled access to care. Healthcare providers that are capable of identifying their needs and how they want their healthcare needs meet through technology focused on them will gain new patients and the next generation of physicians.  It's not a crime to use text messaging to send people information or confirmations about appointments, health reminders, or use QR codes to link to specific education or health offers.

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 engage meaningfully them is during the period when they are a patient?  This lack of focus or tactical engagement execution doesn’t make a lot of sense as a consumer, and patient engagement is about all of the time activity, not just some of the time.  Engaging the healthcare consumer on a continuous basis builds loyalty and importantly keeps them in the 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 doctor 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 doctor 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 doctor experiences your organization at every touch-point they encounter the hospital. Follow their experiences overall from beginning to end, not just in an isolated segment. Fix what’s 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. Actively manage the customer experience in totality by understanding the patient’s point of view.  That is, all touch points internally and externally that a healthcare consumer/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 health care.
Traditional ways of delivering healthcare will go by the wayside in many cases.  Price convenience, access, and outcomes are the drivers.  Find the need, understand the consumer’s behavior controllers, design offering around the user, 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 the health care focus crystallizes around a healthy consumer making choices in a  semi-retail environment, social networks are an important marketing channel that is underutilized and underperforms today but holds great potential to improve engagement, experience, and adherence.

Seven step to achieve market and revenue growth in an evolving healthcare marketplace. Not an impossible task, but one that does require focus and a willingness to break from the past.

Michael is an internationally followed healthcare blogger, business, marketing, and communications strategist and thought leader. I am also HubSpot Academy- Email, Inbound Marketing & Inbound Sales Certified.

For more topics and thought leading discussions like this, join Healthcare Marketing Leaders For Change, a LinkedIn Professional Group.

Tuesday, February 2, 2016

How can the hospital respond to consumerism?




In the last post, the focus was on the three buckets of engagement that hospitals and health systems need to integrate into the engagement cycle of consumer, patient and brand loyalty. The post of January 25th was the first in the series of three posts regarding what CEOs are searching for solutions or paths to take in addressing those concerns.

This week, we consider steps that can be taken to resolve how the hospitals and health system can respond to and take advantage of the growing consumerism movement in health care.
Health care consumerism is already here.

Healthcare consumerism is no longer an “it will happen someday” issue. The evolution of a consumer-driven market will move slowly and be characterized by what seem to be fits and stops in the progression. The point for hospital leadership is that consumerism requires a fundamental change in the hospital to be responsive to the market.  

It is also imperative for leadership to understand, that being able to respond to consumerism starts now, not when the market flips. 

Changing the hospital to be consumer focused organization is a process.  A very long and grueling process, as lasting organizational change is not easy.  For further information on how to become the consumer-focused organization, please read, “What does a customer-focused hospital or healthcare enterprise look like?”

That fundamental change requires an unwavering commitment to meeting the needs of the consumer and having to market plays a critical role in that process.  Consumerism for the hospital translates into accountability and value along the dimensions of price, quality, engagement, and experience.
It’s really in many ways about market accountability of the hospital to the consumer’s of your offerings regardless of their selection journey or place in the care system.

Moving forward with seven ways to respond to consumerism

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 through 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 engage meaningfully 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 the 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. A skilled 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 of an encounter with the hospital. Know the physician experience overall from beginning to end, not just in an isolated segment.

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 manage actively the experience in totality by understanding their point of view.   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 behaviors in play, design offering around them 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 inbound marketing.
Social media and inbound marketing are channels and methods to engage, manage the experience and drive adherence. As healthcare continues the evolution to a healthcare consumer dominated the semi-retail environment, social networking is a healthcare marketing channel that underperforms today but holds great potential to improve engagement, experience, and adherence.

Seven steps for providers to achieve market and revenue growth in a consumer-driven market.  Not an impossible task, but one that does require focus and a willingness to break from the past.


For more topics and thought leading discussions like this, join Healthcare Marketing Leaders For Change, a LinkedIn Professional Group.

Sunday, July 5, 2015

The healthcare consumer has a buyer’s market now; how will providers respond?

“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.

Seven steps for providers  to achieve market and revenue growth in an buyers  market place. Not an impossible task, but one that does require focus and a willingness to break from the past.


Saturday, September 13, 2014

How can the hospital dominate the five healthcare markets?

As the reformation of healthcare continues unabated, a hospital or health system has only five primary markets.  Of course, there are the submarkets within these markets but it’s still only five: Commercial; Exchanges; Medicare; Medicaid; and Uninsured.

The new dynamic added to this change is the evolution of the broader healthcare market into a consumer-centric, semi-retail market existing in a multitude of reimbursement schemes, each nuanced for a different market segment. Leading to the question, have you identified from a marketing perspective immediate actions to improve market position and revenue generation? 

This isn't about massive advertising campaigns, gimmicks, wellness programs, etc. It’s more about getting the basics right, understanding who pays for what and how that is combined with the needs of your healthcare consumers. This isn’t only about driving demand in some cases, but managing demand by moving the healthcare consumer to the right setting, which may not be the hospital or a hospital based outpatient service. In some circumstances it may even mean de-marketing certain services.

Very quickly then, here are seven ways to improve your market position, generate revenue and dominate categories of service.

1.  Brand and competitive position.
Consumers and patients are ready for convenient technology-enabled access to care. Healthcare providers that are capable of identifying their needs and how they want their healthcare needs meet though technology focused on them will gain new patients and the next-generation of physicians.  It's not a crime to use text messaging to send people information or confirmations about appointments, health reminders, or use QR codes to link to specific education or health offers.

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?  This lack of focus or tactical engagement execution doesn’t make a lot of sense as consumer and patient engagement is about all of the time activity, not just some of the time.  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 underperforms today, but holds great potential to improve engagement, experience and adherence. And that takes healthcare marketing leadership, executive vision and meaningful action.

Seven step to achieve market and revenue growth in an evolving healthcare market place. Not an impossible task, but one that does require focus and a willingness to break from the past.

Sunday, August 17, 2014

Can the hospital get on the innovation band wagon?

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.

Sunday, August 10, 2014

Is retail healthcare all about the price? And can the hospital compete?

With all the significant pressures providers find themselves under especially financially, the last thing hospitals and health systems  need to worry about is market disruptive innovation in the delivery of basic healthcare services that focuses on price, convenience and access.

Well, that is exactly what has happened with Walmart introducing disruptive innovation in the pricing and delivery of some basic healthcare services. The following articles detail the move, Healthcare Finance News August 7, 2014,Walmart wades into provide territory”, and Healthcare Payer News, Retail 2.0: A new retail price”. A couple of months ago I posted a blog on June 1 in Healthcare Marketing Matters, “Ready for the tyranny of healthcare price competition”.  

For a while now I have been writing about a semi- retail healthcare market that was evolving. Well it’s here and here in a very big way.

And frankly, I don’t know how providers can compete with Walmart on price, convenience, service and access. And if one thinks they can make the quality argument as differentiation to justify higher prices than what Walmart is promising and delivering to the healthcare consumer, it won’t work.  It won't work unless the hospital or health system wants to be price and outcomes transparent for the healthcare consumers benefit. But that is a big gamble as well.

Part of this is the power of the brand at work. And Walmart has a higher brand profile, brand promise and value proposition that a hospital or health system does. Plus Walmart delivers on the brand promise day in and day out.

It’s easy to say that in the end these are simple tests and services that you can live without, but that is a dangerous attitude and dismissive at best. It’s the first foray into retail healthcare and as Walmart gains knowledge and skill, don’t be so surprised when they go after diagnostic imaging or any other number of ambulatory services that they could provide, and cut the price floor right out from underneath the hospital.

After all, quality for the healthcare consumer is a non-argument. Hospitals and health systems for years have all made high quality claims with no proof points. So, when Walmart tells the healthcare consumer about a better price and the same if not better quality, it’s a believable story. And in a retail environment, when all things are equal in the mind of a consumer, price wins.

This does not mean by any means that hospitals are going to close their doors and be put out of business by Walmart.  But what it does mean is that price is becoming king and unless the price, experience, brand and brand promise work together, one has a long hard road ahead.

Healthcare is changing more rapidly than anyone ever expected.  Hospital and health system leadership don’t have the luxury of not understanding a retail medical model, or not responding to dynamic disruptive innovation.

Part of that response is getting the marketing house in order and moving from a marketing communications effort to a true marketing operation where price, access, convenience and what the healthcare consumer wants is king, not what you want to give them.

Repeat after me, the healthcare consumer and price is king.

Sunday, June 1, 2014

Ready for the tyranny of healthcare price competition?

The hospital marketing game is changing rapidly driven by easily accessible and readily available price and quality data. Hide one’s head in the sand if one must, but that information in the hands of the healthcare consumer will drive more innovation and change in how hospitals do business and marketing, than anything else imaginable.

Member co-pays and deductibles are rising.  Employers moving to defined contributions.  Millions of individuals have purchased health insurance or entered the market via Medicaid expansion. Healthcare consumers are facing the economic reality that they now to pay along several fronts. Can one really think of any better way to control healthcare costs by introducing a level of price competition and providing information which really up until now, was essentially unattainable?

There is nothing like having higher out-of-pocket expenses, coupled with the ability to obtain price and quality information, to estimate your own costs to get healthcare consumers to pay attention. Shopping for care among providers by price is a purely consumeristic behavior and it's not mystery shopping.

Just because one charges more doesn't mean higher quality.  The healthcare consumer already assumes quality.  And they assume that it is equal across multiple providers. Saying you have high quality or a better experience when you are unable to differentiate yourself in the market, is a claim that falls flat in a price driven market.

Markets based on price competition can be tyrannical in nature and a harsh mistress which is new reality for most in healthcare.  Now, doctors, hospitals and others will need to change their marketing operations and begin to deal on price.  Your brand takes on new meaning when price and choice become a critical component in the healthcare consumer decision-making process.  High price undifferentiated quality won't sell.

If a competitor in one’s market takes the first step and advertises lower pricing for some common diagnosis and treatments, what will be the response? Employers are already identifying providers based on price and quality.  Six million American go oversees for healthcare because it’s cheaper than here. If an innovator like Walgreens or private equity offers some of the same services but at a better price with the consumer in mind, is one ready to compete with that in the market?

Surviving all the change in healthcare is already hard, and unfortunately it’s about to get a lot harder. Competing on price vs. claims of quality requires a different set of healthcare marketing skills than a marketing communications focus traditionally found in most healthcare marketing operations.

Take stock and embrace healthcare consumerism and price competition. Growth is good.