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.

Should healthcare providers change marketing in an era of reform?

Faced with a cacophony of payment models from fee-for-service to value ad risked based with everything else in between, the evolving healthcare consumer and the newly insured, healthcare marketing becomes an even greater challenge than before. One size does not fit all. And growth is good.

The hospital or health system has five markets: Medicare; Medicaid; Commercial; Exchanges; and Uninsured. And in those five markets it’s about:  Sustainability; Presence; Perception; and Experience.

These are the four dynamics that healthcare providers need to understand and incorporate for successful marketing and campaign efforts in a consumer-driven market. In short the answer is yes. No longer nice to have, these four basic concepts are now business requirements:

 ·         Sustainability- The resources to effectively and continuously communicate brand and differentiate the offering across multiple channels

 ·         Presence - By maintaining a continuous presence across multiple channels as in so many other consumer-directed industries is how one builds brand preference

 ·         Perception- With a sustainable, continuous presence in the marketplace, sooner rather than latter, your key messages become the opinion of you by consumers and they become fact in their mind.

 ·         Experience-  The actual customer experience at all touch-points matches the brand image, perceptions and opinions of customers that you created in the marketplace, that have been communicated in an integrated multi-channel sustained effort that includes social media engagement

What to do?

A consumer-directed market is much different environment than a provider-directed market which requires skills and abilities that may or may not exist in an organization.   Key success factors for creating a high performance marketing operation that delivers revenue and market share in an era of reform in the new healthcare environment include:

·          A Vice President of Marketing senior management position that reports to the CEO and is involved in all decision making.

·         Marketing resources human, operational and capital budgets to support a multi-channel effort externally and internally.

·         Comprehensive strategic and measurably focused marketing plan that is integrated with the financial and operational plan of the organization.

·         Price, outcomes and experience transparency

·         Internal communication and training to educate the organization around marketing efforts, expectations and their role in the execution of the plan.

·         Creation of a comprehensive marketing dashboard which communicates activities and results on a monthly basis to all levels of the organization.

As the healthcare providers continue to consolidate across all segments, marketing will assume an increasingly important role in the survival and revenue generating activities for the organization. And that requires a far different innovative sustainable marketing presence that changes perceptions than the old way of doing things.

What does it take to implement a strategic healthcare social media program?

Over the past few weeks we have discussed the need for hospitals and health systems to partake of the social media revolution in reaching, engaging and driving the healthcare consumer to make favorable decision and choices.

It’s easy to talk about the rationale about the importance of an effective and efficient hospital or health system social media program.  Or to suggest social media channels as a starting point to drive consumer engagement and business.  It’s another thing to discuss the how you actually do it in a time of scarce marketing resources, lack of knowledge or the willingness to lead change.

What follows for your consideration are steps that need to be taken for a hospital or health system to embark on a fully integrated and effective social media program.

1.       It starts with leadership. If marketing does not have Board, CEO and executive leadership support, it’s not going anywhere. Why? Because it all about resource allocation and slaying some sacred cows.

2.       Improve the organizational marketing process. Let face it, we all do things that don’t make any sense or has become so ingrained it’s done without thinking. Take a step back and look at the marketing processes. Find efficiencies and increase effectiveness. Stop doing what doesn't work and move those resources to social media.

3.       Find the one person on the organization that knows social media and put them full time on the job or hire someone.  It takes an FTE dedicated to successfully run an integrated, efficient, engaging and effective social media program.

4.       Commit to social media all the time. The challenge is to keep in front of your audience with relevant information, all the time.  Attention spans are short.  If someone sees no changes on a pretty regular basis in your content or information, they will fall away.

5.       Measure everything.  Evaluate.  Adjust based on your findings. Redeploy budget as needed.

6.       Use social media with your physicians and employees to communicate, build organizational support and loyalty.

7.        Do the market research to understand and not guess.

8.       In the end if the resources can’t be allocated or the will is just not there consider outsourcing the social media function.

Bottom line is that the healthcare consumer and patient’s are out in social media searching for the hospital, health system or physician. So it is probably about time that the hospital, health system or physician is where they are, not where they would like them to be.

Is social media the next level of patient engagement?

It’s a demanding healthcare consumer and patient out there.  Active in social media, they are used to being engaged across a wide spectrum of industries on their terms. So why should that be so different in healthcare?

Smart phones, tablets and applications are ruling the day and virtually no age segment is immune from that transformation of how they are engaged by organizations. How a hospital and health system as well as physicians engage patents and the growing healthcare consumer in the form of the newly insured, dictates the effective and efficient use of social media as part and parcel of the engagement strategy.

For example, the family went to dinner at Chili’s. I decided to check in with 4 Square. I have done that before but this time was different. I received the usual offer for a free salsa and chips appetizer for checking in as a thank you. But that’s when it became different and the engagement went to a different level.  

Next thing I know, I receive a message via twitter, asking me what looks good to me tonight on the menu? So I replied with the order but that I was substituting some items for a healthier meal.  Which elicited a reply response that sounds good with a smiley face icon.  And that got me thinking about social media engagement and healthcare.

So what really happened here? Social media is about a meaningful dialogue and an exchange of information. Chili’s meet that requirement. Regardless that the response was automated they still managed to engage me in a different way from the last time and enhanced my experience.  From a big data perspective and market research avenue, they also learned what menu items are of interest and how diners substitute.

There is a couple to things about this for healthcare and healthcare consumer or patient engagement.

When an individual checks in on 4 Square at a site of care there should be an acknowledgement with a response of welcome. Additionally, use this opportunity for a system generated message that pops up on the 4 Square screens that is positive about the location of care. One can bet that there are already plenty of negative messages out there already.

Now is the place and time for engaging the individual via Twitter. Are you there for care or visiting someone? Depending on the answer if visiting, then a reminder to visit the gift shop for flowers or other items that night make someone feel better.  Or if seeking care, messages that we hope your experience meets your expectations and let us know if there is anything that can be done to make the care experience better. But do it all in 140 characters.

One has now engaged the healthcare consumer or patient; started a meaningful dialogue; and is gathering useful experience data for experience process improvement.

Later today I will be going to a major area hospital to visit a relative. A hospital where my wife and children have received care on occasion and  where I was admitted for 23 hour observation for evaluation for cardiac event, which turned out to be not the case.

Each and every time I have used 4 Square to check in. Today won’t be any different.  And the social media silence won’t be any different from the hospital either. They still do not know who I am or how to engage me, and that is the wrong message to send in a healthcare environment that is moving to a semi-retail model to be sending to one whom has choice.  

That just screams we don’t know who you are and don't care.

What happens when social media goes awry?

In the discussion of the last few weeks, we have really focused on the sunny side of social media entry into the channel via Facebook to engage the healthcare consumer and patient's. But what happens when the special media channel turns bad on the hospital or health system?  It could be from a disgruntled patient, angry family, a vindictive employee, HIPAA violation, or poor judgment in content posted or reposted.  No organization is perfect so it must be anticipated that it will happen at some point. After all, the healthcare consumer, newly insured and patients are the new paparazzi. And staff makes mistakes. It happens.

So in the words of Douglas Adams in The Hitchhiker’s Guide to the Galaxy,  

Don't Panic

This is not to minimize in any fashion the seriousness of what is taking place. It’s to get one’s attention. 

Sometimes it becomes way too easy to panic. And that really needs to be avoided at all costs. So take these steps to mitigate the social media communications crisis to protect the brand and organizational reputation. Many of the steps are parallel and not sequential.

What to do when social media goes bad:

1.)    Do treat this as a communications failure and have a social media crisis communications plan already in place.

2.)    Understand what happened and why. Identify who the influencers will be to add voice and impact the conversation.

3.)    Actively monitor your online reputation.

4.)    Avoid the informational black hole.  Be ready with appropriate information and press statements.  You can’t hold a news conference every time you want to say something.

5.)    Have social medium appropriate messaging.

6.)    Integrate your response across all social media activities. Remember that some reporters use Twitter as a basis for information and facts without verifying the authenticity of the information.

7.)    If the organization blew it, take ownership.  No excuses, the appearances of excuses or pejorative behavior are allowed.  Social media users are a pretty savvy group and will see right through it. It will only make matters worse.

8.)    Integrate paid and earned media.

9.)    Have clear rules of social media engagement by employees.

10.)  Don’t forget to use your employees and their access to social media and how they can influence the conversation.  Employees are your secret weapon in this battle.

And lastly, here is hoping that a social media crisis never comes to your doorstep.