Can bundled care and pricing give you a marketing edge?

As the burgeoning healthcare consumer looks at you from a price, outcomes and experience perspective, it naturally follows, well at least for me anyway, to wonder if bundled care and the price certainty that goes along with it can give you a market edge.

I think it does and here’s why.

Even as healthcare reform kicks into high gear in 2014, there will be a cornucopia of diversity in the payment models in the healthcare market place, and you have to be ready for all of them.  Bundled care and its price certainty can go a long way to differentiate yourself in the market to the healthcare consumers not in an ACO, Medical Home, or narrow networks, and drive profitable market share and revenue to you. It could even make you more attractive in a narrow network of providers.  And I am pretty sure employers will like it too, especially those that are self-insured.

I get it that not all care can be neatly bundled into a healthcare consumer friendly package, but a lot of it can. And if you want to survive in a consumer-centric healthcare model, then that means you will have to meet healthcare consumers needs, not yours. That means price certainty, transparency in outcomes and experience.

Don’t believe me, then take a look at this short article “Poll finds consumers like bundled care”, Healthcare Payer News, April 17, 2013. Consumers like bundled care because of offers price certainty. It is transparent, easily understood and for the most part affordable, especially for the uninsured. There will still be a significant portion of the population who will not have insurance even under the ACA and the expanded Medicaid programs.

It is inevitable that one of your competitors in your market is going to come out with a bundle care programs for specific diagnosis’s and procedures.  When they do, they will have the healthcare consumer’s attention.  First one to the market place wins the perception battle with this, and moves the market away from the confusion of hospital price, and clarifies for the healthcare consumer their immediate choices.

As I have written before, the new market drivers for hospitals in an evolving consumer-centric market are price, outcomes and experience.  Bundled care can deliver on all three market dimensions.

Nobody said this was ever going to be easy.

Michael J. Krivich, MHA, FACHE, PCM, is an internationally followed healthcare marketing blogger with over 5,000 monthly pages views read in over 52 countries worldwide on Healthcare Marketing Matters. These views are my own. He is founder of the michael J group, a Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association, Like us on  facebook at the michael J group, and connect with me on LinkedIn, Twitter, and Pheed. 

What is your market position- superior, equivalent or inferior?

With the reformation of  healthcare in the U.S. about to hit full speed ahead, most healthcare providers will need to undertake a full detailed examination of their position in the market vies a vie their competitors.   A simple question really that is not so easily answered unless you're being honest, and are doing the market research.

Positioning is not a tactic. It is a strategy.

There are really only three positions you can have in a market, superior, equivalent or inferior. And just saying you have the newest hi-tech equipment, offer world-class care, revolve around the customer,  uild a new building, or produce a white paper does not, let me repeat, does not mean you hold a superior market position, or even a thought-leadership position for that matter.

If your market share has not changed much over the last few years, you’re not in a superior position. If revenue has not grown, but stayed steady, you are not in a superior position. If your products, solutions and services are haven't changed much, then you are not in a superior market position.

If customers keep asking you about what you are doing in an area, then you are in an inferior market position.  If your market segments can't tell the difference between you and someone else, you are in an equivalent position.

And when all things are equal, people buy on price.

And with all the potential families and individuals with health insurance becoming available, if you haven't established a superior market position, then an equivalent or inferior position gets you into a price war. In value-based and P4P payment programs, superior brings more revenue. An equivalent market position brings less; while inferior positions will penalize you.

So before you start marketing, you need to take a closer look at your market position, how you are positioning your healthcare organization and the market position you need to dominate and control. 

That is marketing strategy first. Tactics to get you to that position, second.

No more do-over's. You either position yourself correctly first and control the market, or it controls you.

Your choice superior, equivalent or inferior. Choose or it will be chosen for you.

Michael J. Krivich, MHA, FACHE, PCM, is an internationally followed healthcare marketing blogger with over 5,000 monthly pages views read in over 52 countries worldwide on Healthcare Marketing Matters. These views are my own. He is founder of the michael J group, a Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association.  Like us on  facebook at the michael J group, and connect with me on LinkedIn, Twitter, and Pheed

What is your market position in healthcare?

With the reformation of healthcare in the U.S. moving forward full speed ahead, most healthcare providers will need to undertake a full detailed examination of their position in the market vies a vie their competitors.

A simple question that is not easily answered. That is, if you're being honest.

Positioning is not a tactic. It is a strategy.

If someone in your organization tells you it's a tactic then they are once again showing that they don't marketing, and don't know what they are talking about. And just because you think you are superior, and say so in your marketing, doesn't mean the market sees you as superior. Too much organizational group think at play perhaps?

There are really only three positions you can have in a market, superior, equivalent or inferior. And just saying you have the newest hi-tech equipment, offer world-class care, revolve around the customer, build a new building, or produce a white paper does not, let me repeat, does not mean you hold a superior market position, or even a thought-leadership position for that matter.

If your market share has not changed much over the last few years your are not in a superior position. If revenue has not grown but stayed steady, you are not in a superior position. If your products, solutions and services are haven't changed much, then you are not in a superior market position.

If customers keep asking you about what you are doing in an area, then you are in an inferior market position. If your market segments can't tell the difference between you and someone else, you are in an equivalent position.

And when all things are equal, people buy on price.

And with all the potential families and individuals with health insurance becoming available, if you haven't established a superior market position, then an equivalent or inferior position gets you into a price war. In value-based and P4P payment programs, superior brings more revenue. Equivalent market positions brings less; while inferior positions will penalize you.

So before you start marketing, you need to take a closer look at your market position, how you are positioning your healthcare organization and the market position you need to dominate and control.

That is marketing strategy first. Tactics to get you to that position, second.

No more do-over's. You either position yourself correctly first and control the market, or it controls you.

Your choice, superior, equivalent or inferior, choose or it will be chosen for you.

Michael Krivich is an internationally followed healthcare marketing blogger with over 4,000 monthly pages views in over 52 countries worldwide. He is founder of the michael J group, a healthcare marketing consultancy dedicated to creating value through strategic marketing for hospitals and health system regardless of payment mechanism, either fee-for-service or value-based to increase market-share, revenue , brand and demonstrate actual return on marketing investment. Michael is a Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association.

Is the SCOTUS reform ruling a healthcare marketing change opportunity?

The die is cast and the way forward never more clear. Value-based payment, physician integration, bundled payments, population health, demand management, ACOs, P4P structures evolving and leading the transformation of healthcare as we know it. All of which is followed by the slow and painful demise of fee-for-service payments. Enter now into the reality of healthcare where quality, accountability, reduced care fragmentation, value for the price paid and innovation are king.

And with great change comes great opportunity.

How do you market in a time of upheaval and charge? Especially as healthcare providers must compete on outcome transparency, quality and cost. A triple threat and uncharted territory. Outcomes data will be the driver and available to the consumer to make an informed choice. A monumental shift in the market place of who controls the information. What worked in the past won't work tomorrow.

Brand

Your message needs to be clear and concise, echoing your brand promise and the value that you bring though your care system to the consumer or the insurer. Focus on outcomes not high-tech or touchy- feely. Consumers are too sophisticated for such a simple message.

How you position yourself a vie others is critical and you get one shot. You need to do it right. Remember, you can only take one of three positions in the market, superior, equivalent or inferior. The initial positioning of your brand is one of the most critical tasks you face. With an informed consumer bearing more of the cost, you have one shot to get it right. No do over's anymore.

Make sure your brand name and logo is consistent throughout the organization. Commit to excellence in customer service and create a Voice of the Customer program to establish and maintain a continuous feedback loop with your key customers. This is not lip service; this is real change. Failure to do so will label you as inferior. Poor customer service is no longer acceptable.


Marketing Leadership

Marketing is strategy first, tactics second. The voice of marketing should reflect the voice of your customers and not be a second thought. Your future programs and services will be determined by the needs of the market, not your gut feeling. You cannot become a customer-driven or market-driven organization if the skills and experiences of marketing is not at the leadership table.

Patient Experience

Use patient testimonials in everything you do and physician testimonials for everything related to referring physicians. Make sure your docs are doing their part in outreach to other physicians and getting medical information and the patient returned to the primary care doc as quickly as possible.

Understand from the patients and family's viewpoint the entire customer experience from beginning to end and make sure that execution is flawless. Out-service the other hospitals and clinics. Shortened waiting time, faster results, technology you have etc. The object is to turn patients as much as possible into customer evangelists. Word-of-mouth referrals but you can only do that through service experience. I did series of posts on Customer Experience Management, read those they should help

Price Transparency

Out price where you can the other hospitals for the insurance payers. Lock down the network, make sure you accept all the plans that your patient and referring docs accept. Make sure in your materials that you list all of the insurance plans you accept. Work the payers to set yourself up as the preferred provider. And make a big deal of that. Get the payers and insurance companies to do some heavy lifting for you by getting them to let their members know you are a preferred provider.

Outcomes Data

One area that is greatly lacking in healthcare marketing, is an intelligent dialogue on your outcomes with your audiences. Payors', pharma and medical device, have recognized this and are leading in the use of quality and outcomes data to drive decision-making. It is time for the rest of the healthcare industry to catch up.

Use outcome data where you have it.

Population Health Education

Patient education is a great medium to reinforce your brand, your brand promise and create customer evangelists. But that of course assumes, that you are doing original work in patient education. And not, just throwing together one-page disease information sheets, or using information from associations or pharma. Just because you throw some patient education materials in a box, doesn't mean that you are accomplishing anything. Other than your materials possibly reaching the recycle bin.

This is by no means a knock on any association or pharma materials, for they are great sources of information and advice. They just lack an organizational imprint of who you are, your brand and brand promise, to be able to showcase the breadth and depth of your knowledge and expertise. And that imprint doesn't mean putting your logo on the materials.

Besides the pervasive fear of competitors seeing what you are doing, patient education materials need to be on your web site and in easily accessible and downloadable formats. You can use QR codes in your mobile marketing that take individuals to the patient education section. Reference them in your communications programs. Build a marketing strategy around them to differentiate you from other providers.

Hold wellness classes and seminars on topics that people want to learn about, even use the Internet to do doctor led webcast.

Traditional Marketing

Direct mail, it still works.

In advertisements, make sure that there is a photo of the physicians for the service and patient testimonials about that doctors care and treatment. Use outcomes data.

Advertise that you are more than just a hospital, but a comprehensive healthcare center that does many things.

Set your docs up as expert subject matter content experts for local print and electronic news outlets. It never hurts, crank out press releases when you can.

Make sure your employees deliver an very high level of customer/patient service. Look at your patient satisfaction scores and see where you can improve.

Work with your admitting physicians to make it as easy as possible for them to admit patients to your hospital or seek treatment for outpatient services such as lab, ex-ray etc.

Use Social Media

Don't forget social media and how powerful a medium it is to create customer evangelists.

Keep in constant communication with your patients/consumers/members. Use all the tools available. You are only limited by your imagination. Facebook, twitter, YouTube, LinkedIn etc. People are wired today and expecting the same of you. Integrate social media in all that you do.

Make sure your web site is user friendly and easy to scheduled appointments or pay bills and contain wellness information.


Build Loyalty

Create a loyalty program. This is not a taboo and except for government program beneficiaries in Medicare and Medicaid or other government funded programs. You can create a loyalty program. Fact is not all patients are the same so you might as well take advantage of it before others do. It can be a powerful differentiator. Step out and be creative.

Understanding and Execute Demand Management

The hospital is no longer the center of the healthcare universe. Marketing needs to understand what the demand for healthcare services will be, when they will be needed and manage that demand making sure that the hospital or health system has the right resources, in the right place, at the right time to meet demand. The days are rapidly slipping away where marketing will be driving demand to fill hospital beds. You will drive demand to the appropriate place and location of service, at a price the market is willing to pay.

Live long and prosper.
Michael Krivich is an internationally followed healthcare marketing blogger with over 4,000 monthly pages views in over 52 countries worldwide. He is founder of the michael J group, a healthcare marketing consultancy dedicated to creating value through strategic marketing for hospitals and health system regardless of payment mechanism, either fee-for-service or value-based to increase market-share, revenue , brand and demonstrate actual return on marketing investment. Michael is a Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association.

How will healthcare marketing change post SCOTUS reform ruling?

Given the upcoming ruling by the Supreme Court of the United States (SCOTUS) expected on June 28, regarding the Patient Protection and Affordable Care Act (PPACA), how will that change healthcare marketing?

In the end regardless of the ruling, healthcare providers still need to reduce cost, improve quality, coordinate medical care inside and outside of the provider, integrate with physicians, manage chronic illness, reduce readmissions, etc. Government driven or privately driven, these issues and market momentum to change will remain regardless of the laws status.

Just my opinion, but healthcare marketing has been slow to adapt to this dynamic environment. Fee-for-service will continue in some form. ACOs, medical homes, bundled payments, value-based payment and various P4P programs will continue. It's really a question of who is driving the change bus, private industry or the Federal government.

There is really no choice in the matter anymore. Healthcare organizations will have to change their understanding and practice of marketing along these lines:

Marketing Leadership

Marketing is strategy first, tactics second. The voice of marketing should reflect the voice of your customers and not be a second thought. Your future programs and services will be determined by the needs of the market, not your gut feeling. You cannot become a customer-driven or market-driven organization if the skills and experiences of marketing is not at the leadership table.

Managing the Patient Experience

If anyone is prepared to understand and mange the patient experience across the organization it's marketing. Hospitals in particular are making the mistake of putting operations in charge of patient experience. This is an oxymoron really.

Patient experience means just that- understanding what that patient experiences is at all touch points. And then changing or managing that experience to its fullest potential for the benefit of the patient and the organization. Patient experience is an integrating process across the entire organization internally and externally. One organization to the patient, one patient to the organization. It is not simply another quality program or flavor of the day.

Understanding and Executing Demand Management

The hospital is no longer the center of the healthcare universe. Marketing needs to understand what the demand for healthcare services will be, when they will be needed and manage that demand making sure that the hospital or health system has the right resources, in the right place, at the right time to meet demand. The days are rapidly slipping away where marketing will be driving demand to fill hospital beds. They will drive demand to the appropriate place and location of service.

Becoming a Revenue Marketer and Having Revenue Accountability

Return on Marketing Investment (ROMI) is necessary for anything marketing accomplishes, traditionally, socially or online. Marketers in healthcare organizations need to become revenue producers, not resource consumers that show little value beyond, it looks nice. In fact, marketing should have P&L as well as an SG&A accountability for many of the products and services being offered by a healthcare organization.

Marketing the Manager of Change

Who better in an organization than for marketing to manage the healthcare organizations transformation from an inward-focused it's all about me, to an outward-focused market and consumer driven organization? Open to much debate, this is probably the most controversial look at the expanding role of marketing. Individual who have looked internally at their organizations all of their careers, do not necessarily have the skills, training or abilities to change an organization 180 degrees. And that is the type of change we are talking about here.

Michael Krivich is  an internationally followed healthcare marketing blogger with over 4,000 monthly pages views in over 52 countries worldwide. He is founder of  the michael J group, a healthcare marketing consultancy dedicated to creating value through strategic marketing for hospitals and health system regardless of payment mechanism, either fee-for-service or value-based to increase market-share, revenue , brand and demonstrate  actual return on marketing investment. Michael is a Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association.

Is the market changing to where a hospital admission is a defect in the quality of care?

Fee-for-service payments vs. care value payments. On one side you are rewarded for the production of care by filing beds. On the other side you're paid for providing the right care, at the right time, in the right location that in reality, keeps the patient out of a hospital or hospital-based service.

Healthcare marketers are caught in the middle of this brave new world trying to drive demand to put "heads in the beds" to generate revenue though the production of care, while trying to manage demand in new payment models that push patients to more appropriate care which may not be the hospital.

Somewhere, a group of entrepreneurs is looking at the process of care and have come to the conclusion that a hospital admission is a defect in the quality of care.

Are you just trying to survive?

An attitude, much often too common in hospital executive leadership that we are just trying to survive. This is sad really, when innovation, growth opportunities and new business development initiatives are being left on the table because hospital executives can't get out of the "we're just trying to survive" mentality.

If you're just trying to survive today without looking for market opportunity and finding ways to be more consumer- focused, innovative and non-traditional in the providing care, then you are not going to survive.

Are you being left behind?

Infusion centers, retail clinics, pharmaceutical advances, free-standing surgery centers and diagnostic clinics, remote monitoring, home health care, sub-acute services, patient management to prevent readmissions, medical device technological advances and many other services when taken together, have the potential to significantly change the way that healthcare is delivered. It will make the hospital admission of today, a defect in the process of care tomorrow.

Does that mean hospitals will go away? No, there are limits to this concept of the hospital admission as a defect in the quality of care. Many medically complex surgical procedures can only be performed in a hospital. ERs will always be needed. But the rest of it, maybe not.

Unless hospital executives and their marketing and planning departments start seeing the forest from the trees, just trying to survive is leading them away from innovation, opportunity and growth, at a time when others with non-traditional entrepreneurial backgrounds, may very well relegate the hospital to a place in the care continuum where an admission is a defect in the process of care.

So, are you still just trying to survive, or are you changing to what the market is demanding to remain relevant and needed?

Innovate, adapt and meet market needs, or become just another "big box" healthcare provider that goes by the wayside.

Michael Krivich is an internationally followed healthcare marketing blogger with over 4,000 monthly pages views in over 52 countries worldwide. He is founder of the michael J group, a healthcare marketing consultancy dedicated to creating value through strategic marketing for hospitals and health system regardless of payment mechanism, either fee-for-service or value-based to increase market-share, revenue , brand and demonstrate actual return on marketing investment. Michael is a Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association.

How do You Change Healthcare Consumers From Ignorant/Uneducated to Informed?

The discussions on 30 plus LinkedIn groups across the wide healthcare industry spectrum has been revealing to the question "Is the Healthcare Consumer Ignorant?"

To summarize, there are many contributing factors, from healthcare diagnosis and treatment complexity, the inability of providers too communicate in an understandable way their process, to economic factors that cause the consumer to be disconnected. And some are just like arrogant parents who know all and see all.

And I thank everyone who contributed to the discussion no matter what side you are find yourself.

But it is time to move the discussion forward and start the dialogue on how to change the healthcare consumer from ignorant/uneducated to informed.

The task at hand is not insurmountable. It will require innovation, creativity, change, an attitude adjustment and perseverance.

Anything is possible.

This means a long-term commitment that most likely is generational in nature across all healthcare industry segments, to have an informed healthcare consumer. Think back to the 80s when DRGs were introduced. As an industry, healthcare went from we will do things to you, care for you and you have no real responsibility for your care and treatment, to now you have a personal responsibility to maintain good weight, stop smoking, wear a motorcycle helmet etc. We offered wellness programs, screenings, lectures and educational materials. Lots of stuff that more or less has had a positive impact on some diseases.

In spite of these efforts, we remained an industry that still does things to people and generally looked the other way when patients asked questions or wanted to be involved.

The economists, think-tanks, employers, physicians, health plans, hospitals, associations, Federal and State governments and special interest groups have spoken, created new models, programs and services in an attempt to bend the cost curve with limited success. This is not an attack, for we are better off today with these attempts at reform.

From the view in my world, one thing we have not done to a great extent is involve the end user in these discussions. How can we succeed, if the end-user is not informed and involved in all of these processes and plan creations?

The healthcare cost problem will not be solved until we have an educated, informed consumer, that is an active participant in the decision-making process regarding their care and understands the price.

Where do we go from here?

Here are some ideas, not all inclusive but just offered up for consideration.

1. Marketing needs to be far more involved than it has been so far. This isn't just about making things pretty. It's about delivering content that is informative, understandable, actionable and life-changing, delivered however the person wants it. It is multi-channel and uses all available methods like social media, web site, direct mail, webinars, apps etc. Whatever it takes. Not just the do an ad, have program. It needs to be interactive and fits into an individual's daily life seamlessly.

Senior management needs their marketing departments at the leadership table to understand the life and pulse of their communities.

HIPAA does not mean that you can't communicate and use all the tools available.

2. There needs to be price transparency. Time to move away from communicating what the charges are for healthcare to the price of the healthcare service. Consumers will understand price, they will never understand charges. Strive for clarity.

3. Increase outcome and data related transparency for the consumer. Quality awards are nice and all, but what does it really mean and how can the consumer use that type of information? Consumers can not make choices without real actionable information.

4. Stop talking at people; talk to them. Healthcare will not change and the cost curve will not be bent until we have an informed and educated consumer.

5. Create incentives for the physicians and consumers to be involved and choose lower cost options for treatment or diagnosis. For example, American Imaging Management, a WellPoint Subsidiary, has developed a creative incentive program that awards physicians and patients for choosing lower cost alternatives for some imaging. People respond to financial incentives positive and negative. Time to be creative.

6. Adjust your attitude. The healthcare consumer is not ignorant. They may be uneducated, but they are not ignorant. Given the right information, they can make reasonable decisions and be actively involved if you let them. That means changing attitude, organizational culture and approach.

7. Innovate. Healthcare lacks original innovation and an entrepreneurial spirit for the most part. Instead of saying why something won't work because it challenges established beliefs or process or ways of doing things, ask how it will work or how lessons from other industries can be adapted. Leave the comfort zone.

8. Lead the change in your organization.

These are just some ideas and opinions. I am sure that I have missed a lot, gorged some sacred cows and maybe angered a few people. We all know that this is a complicated challenge. We have tried just about everything else. And unless we begin to create an informed, involved and educated healthcare consumer, then we won't be able to bend the cost curve.

You can continue the conversation with me on:
LinkedIn: http://www.linkedin.com/in/krivich0707
Twitter: http://www.twitter.com/mkrivich

Michael Krivich is an entrepreneurial healthcare marketing executive and internationally followed healthcare marketing blogger read daily in over 38 countries around the world. A Fellow, American College of Healthcare Executives as well as a Professional Certified Marketer, American Marketing Association, he can be reached at michael@themichaeljgroup.com or 815-293-1471. Areas of expertise include: brand management; strategic marketing; sales and marketing integration; medical device and specialty pharmacy marketing; physician marketing; product launch; start-up launch and revenue growth; tactical market planning; customer experience management; rebuilding and revitalizing marketing operations; media relations; and service line revitalizations. Mike is Huthwaite SPIN selling trained and a Miller Heiman Strategic Selling alumni.