Is it time for hospital advertising to change?

With the healthcare consumer having a higher cost stake in healthcare choices with larger deductibles and co-pays, combined with the availability of price and outcomes data; it would seem that the time for change has come.

If one was to look at healthcare consumer in terms of interaction with the brand, only one-third of the time is spent as a patient during diagnosis and treatment. Two-thirds of the time they are healthcare consumers making choices and decision about where to receive care.

What should hospitals be advertising to create an unassailable market position, a strong brand, as well as an enlightened and informed consumer?  

Is it the "we are unique and world-class", have best doctors and locations that are accessible and convenient?

Then there is the ever popular, the technology is state-of-the-art, photo of the shiny new building or the doctor looking skyward like they are in great deep thought.

Another winner; we have the most shiny trophies and quality awards for several services. Oh, and even though we don't have a quality award for all services, if everybody else was as good as us message to go with it, “100,000 lives would be saved annually".

I think, that pretty much for the most part, sums up the current state of hospital advertising.  And when several hospitals are staying all of these things at the same time in a market, does anyone really believe that the consumer is paying any attention at all, when there is so little differentiation?  It all looks like "me too" and just shouting for attention.

It makes the Board, senior management and physicians feel good, all the while your audience receives absolutely no information that will help them make some of the most critical choices and decisions in their life.

The time has come healthcare providers to provide meaningful information in the marketplace that will allow the healthcare consumer to become informed, educated and participatory in the care decision-making process. 

The hospital or health system should be transparent and talking about outcomes and prices.  The healthcare consumer is hungry for information and searching the internet as well as other sources about you and how you perform. They are paying more of the cost and demanding more say in the process. And they don't like being treated like they are some small child who can't make a decision.

To use an often quoted metaphor, the wave of change is upon the hospital industry as we move from provider-dominated and controlled decision-making model, to a healthcare consumer and patient-directed controlled model, that is evolving into a semi-retail environment. 

Changing markets unless responded too can be a harsh mistress. 

And how will you be paying for your care?

Seems like an innocuous question/statement.  But it’s a question that can be fraught with staff unease, unexpected healthcare consumer resentment, missed opportunity and bad PR if it is not handled correctly.

It’s not a question of whether not you should ask that question as a healthcare provider. No margin, no mission.  There are very appropriate reasons for asking, and includes walking a fine line with tax exempt status and the legal requirement of caring for all who come through the doors seeking medical treatment. The real question is how is the organization preparing to engage the newly insured, current patients and the healthcare consumer making choices in which healthcare providers to engage?

How one handles the question goes beyond staff training, scripting and role playing. The conversation and ask begins well before anyone ever sets foot in door of the healthcare provider. It may be that the healthcare provider has lost the potential advantage in securing the high ground in this part of the healthcare reform equation.

Individuals and families are selecting high deductible plans to reduce their premium costs. Employers are going to defined contributions, creating private exchanges, increasing employee contributions for not only the cost of insurance, but the deducible and co-pays as well.  And even the newly insured that could be eligible for the expanded Medicaid programs will still have to meet spend down requirements of the Medicaid program before full coverage will kick in. Just because the program is expanded for initial eligibility requirements doesn’t mean in the least that the base regulations of the program have changed.

Several months ago I wrote about the opportunity in the market place that healthcare providers had in educating the healthcare consumer abut exchanges, plans and choices.  It was at that moment in time that those discussions could have begun with the process of the payment ask, connecting it to high deductible plans and general changes in how they will pay for healthcare. Little if any activity on the part of hospitals, health systems and other providers recognized the new dynamics and took marketing and PR steps to head off the coming challenges.

Now that the ship has sailed, how are you going to actively take control of the conversation and educate the healthcare consumer before they ever walk in the door seeking treatment? This is about setting realistic expectations in the context of experience as well as establishing the role and responsibility of the healthcare consumer in all of the discussions.

Easier said than done and we all know that.  But with all the issues around the exchanges and failures therein,  the news that people are selecting high deductible plans and the coming sticker shock because they really don’t understand what they are buying,  you have the chance to hit the reset button and start anew.

So instead of advertising those wellness bus tours, free gifts for a colonoscopy or even connecting with all those high quality physicians on staff without outcomes transparency in any of it, maybe it should be meaningfully engaging the healthcare consumer about the real cost of high deductible plans, prices, the value of the medical service and their accountability and portion of cost they will bear?

The risk is because as we all know, that the process for asking for payment after the fact or even when someone walks in the door and is sitting at the desk, is not going to go well and there will be human error.   As a tax exempt healthcare provider, you will be the evil greedy healthcare provider, and it's a perceptional battle that is unwinnable.

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 Executivesand a Professional Certified Marketer, American Marketing Association.  Like us on facebook at the michael J group, and connect with me on LinkedIn and Twitter.

How will you explain pricing to healthcare consumers?

The eight hundred pound gorilla is in the room and it’s not going away any time soon if ever. With the newly insured, current and former patients and the healthcare consumer all facing increasingly larger out-of-pocket expenses for healthcare, how will you explain pricing?

Case in point. A couple of weeks ago I was exhibiting the signs of a heart attack. So after being sent to the ER by my primary physician, an EKG and blood work was done and after several hours I was admitted to the 23 hour observation unit. The other day I received the bill for $23,000 which works out to around $1,000 an hour.  And yes it was sent to my insurance carrier and I have my portion to pay. But there was no explanation of how those charges were determined.  Here is the bill; you owe; so pay it.

But it got me to thinking. I had no idea how the $23K was arrived at and whether or not that was representative of the most accurate value for the care received, especially when the total bill would buy a nice car for that type of money. I mean, a less than friendly radiologist, an arrogant hospitalist who was an internal medicine physician, and a cardiologist who seemed like he did not want to be there added to the wonder if it all. I especially liked being awakened at 12:30 PM for a saline IV that had to be started because a doctor ordered it.  My biggest chuckle was that I could not get a Tylenol for a headache, but there was a physicians order for morphine. Go figure. It’s probably a standard order set and no one is paying attention.

 

I wonder how many meals I was charged for since I only ate once because no one explained to me that I had to order each meal off a menu and never did have breakfast because of that little omission?

As healthcare evolves to a semi-retail model with the healthcare consumer aka the patient at the center of it all, explanation of pricing, what care and test were provided is no longer something that hospitals, health systems and other providers can afford to ignore.  Can you really imagine going to buy a large ticket item and not knowing all charges? And healthcare is a large ticket item.

This is a reasonable expectation for the healthcare consumer, to be able to know all that was done and how much it cost in detail.  The healthcare consumer is paying more out of my pocket. You can bet they want to look at billing by line item. And they really don’t have the time to chase down with your billing department the detail.

It’s called accountability and it’s a two way street.  Accountability on my part to understand the who, what and where of treatment, and accountability on your part to be price transparent. This will lead to some uncomfortable discussions with the healthcare consumer as they seek to understand it all, but that is why you have a marketing department. They need to be involved by understanding the informational needs of the healthcare consumer, design of the bills and training of staff to handle inquiries.

Healthcare is changing and the old ways of doing business no longer work.  Because if you don’t change billing practices and become more price and treatment transparent, someone legislatively, or through the courts will force you too.

Its your choice on price transparency. Inform the healthcare consumer now, or inform them later when you are forced too. Either way it’s going to happen.

Now where is the address for the FTC and my Senator and Representatives?

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 Executivesand a Professional Certified Marketer,American Marketing Association.  Like us on facebook at the michael J group, and connect with me on LinkedIn and Twitter.

Why isn’t hospital advertising changing with the times?

I have to admit, this is a pet peeve of mine, disingenuous hospital advertising. In a day and age where healthcare is evolving to a consumer centric, semi-retail model, some hospital marketers and C-suite leadership continue to treat the healthcare consumer like they are incapable of making informed choices.

With the healthcare consumer having a higher cost stake in the process with larger deductibles and co-pays, your price, and outcomes data readily available, it would seem that the time for change has come.

Remember, when you are marketing to individuals, they don't become a patient until they receive a service from you.  So in one-third of the time in their interactions with you, the healthcare consumer is only a "patient" during diagnosis and treatment. Two-thirds of the time they are not patients, and most likely are arguing with your billing department about the charges.

Arguments aside, what should hospitals be advertising to create an unassailable market position, a strong brand, as well as an enlightened and informed consumer?  

Is it the "we are unique and world-class", best doctors, hundreds of locations, even though The Joint Commission was just there for a sentential event?

Our technology is state-of-the-art.  Never mind that a new technology was just introduced and you don't have it.

Another winner; we have the most shiny trophies and quality awards for several services. Oh, and even though we don't have a quality award for all services, if everybody else was as good as us message to go with it, “a 100,000 lives would be saved annually"! Really.

How about the ever present focus on the physicians with messaging about having the best primary care or specialists in the region that drones on about everything other than healthcare.  Prove it.  Maybe the healthcare consumer will take you seriously when you finally report Dr. Hodad and remove him from your medical staff.

I think, that pretty much for the most part, sums up the current state of hospital advertising.  And when several hospitals are staying all of these things at the same time in a market, do you really believe that the consumer is paying any attention at all, when there is so little differentiation,  it all looks like "me too" and just shouting for attention?

It makes the Board, senior management and physicians feel good, while your audience receives absolutely no information that will help them make some of the most critical choices and decisions in their life.

The time has come healthcare providers to provide meaningful information in the marketplace that will allow the healthcare consumer to become informed, educated and participatory in the care decision-making process. 

You should be transparent and talking about your outcomes and prices.  The healthcare consumer is hungry for information and searching the internet as well as other sources about you and how you perform. They are paying more of the cost. Demanding more say in what goes on. And don't like being treated like they are some small child who can't make a decision.

To use an often quoted metaphor, the wave of change is upon the hospital industry as we move from provider-dominated and controlled decision-making model, to a healthcare consumer and patient-directed, controlled model. 

Your choice so chose wisely, the future of your organizations depends on it.

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 Executivesand a Professional Certified Marketer, American Marketing Association.  Like us on facebook at the michael J group, and connect with me on LinkedIn and Twitter.

Have you seen any goofy hospital advertising lately?

I have to admit, this is a pet peeve of mine, stupid hospital advertising. In a day and age where healthcare is experiencing great change, some hospital "marketers" and C-suite leadership continue to treat the healthcare consumer like they are some kind of idiot, incapable of making informed choices.

Do you believe that by offering a massage with a digital mammography, that women will choose to have their mammography at your facility? I would like to see the market research on that one. But then, odds are on that there wasn't any market research.

Remember, when you are marketing to individuals, they don't become a patient until they receive a service from you. So in one-third of the time in their interactions with you, the "person" is only a "patient" during diagnosis and treatment. Two-thirds of the time they are not patients, and most likely are arguing with your billing department about the charges.

And healthcare marketers wonder why no one takes them seriously.

Arguments aside, what should hospitals be advertising to create an unassailable market position, a strong brand, as well as an enlightened and informed consumer?

Is it the, "we are unique and world-class"? Even though The Joint Commission was just there for a sentential event.

Our technology is state-of-the-art. Never mind that a new technology was just introduced and you don't have it.

Another winner; we have the most shiny trophies and quality awards for several services. Oh, and even though we don't have a quality award for all services, if everybody else was as good as us message to go with it, "a 100,000 lives would be saved annually"! Really.

Or, how about the ever present focus on the physicians with messaging about having the best specialists in the region. And just so happens that these same physician practice medicine at the hospital down the street or across town. Hmm, does that make less qualified at the other place?

Then there is the here are the insurance plans we accept, you're the center of our world, followed by the we have big screen TVs and private rooms!

Let us not forget for a new hospital that just opened, "the air in your room is like the clean air in surgery."

I think, that pretty much for the most part, sums up the current state of hospital advertising.

And when several hospitals are staying all of these things at the same time in a market, do you really believe that the consumer is paying any attention at all, when there is so little differentiation, it all looks like "me too" and just shouting for attention?

I am sure it makes the Board, senior management and physicians feel good. All the while your audience receives absolutely no information that will help them make some of the most critical choices and decisions in their life.

And that can't go on any longer.

Time really to stop treating the healthcare consumer like they are some kind of idiot. People are coming to the realization that healthcare is not such the "black box that the consumer can't possibly "understand the complexity of medical care".

Time for meaningful information in the marketplace that will allow the healthcare consumer to become informed, educated and participatory in the care decision-making process. Time for marketing to begin to lead in hospitals instead of being order takers, and talking nonsense in their markets.

You should be transparent and talking about your outcomes. You need to engage in a meaningful dialogue that gives individuals the information that they want and need. The healthcare consumer is hungry for information and are searching the internet and other sources about you and how you perform. They are paying more of the cost. Demanding more say in what goes on. And don't like being treated like they are some small child who can't make a decision.

To use an often quoted metaphor, the wave of change is upon the hospital industry as we move from provider-dominated and controlled decision-making, to consumer and patient-directed, controlled healthcare. Your choice, change, be responsive and surf the wave to success, or be washed over and deposited on the ash heap of history.

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.

What Should Hospitals Advertise?

That question of course, assumes that you believe hospital advertising is appropriate. And you may well believe that it is also a waste of resources. Which I think is a most dangerous position, given the ongoing transformation of the healthcare market from a provider-directed to a consumer-directed or as some prefer a patient -directed model.

Arguments aside, what should hospitals be advertising to create an unassailable market position, a strong brand, as well as an enlightened and informed consumer? Remember, when you are marketing to consumers, they don't become a patient until they receive a service from you. So three-quarters of the time in their interactions with you, the "consumer" is only a "patient" during diagnosis and treatment.

Should it be being the best at all things or a category of service?

How about having the most current technology?

Maybe it could be who has the most quality awards and highest patient satisfaction?

Or, it could focus on the physicians with messaging about having the best specialists in the region?

Then, there is the here are the insurance plans we accept, followed by the, we have big screen TVs and private rooms.

I think, that pretty much for the most part, sums up the current state of hospital advertising. And when several hospitals are staying all of these things at the same time in a market, do you really believe that the consumer is paying any attention at all, when there is so little differentiation, it all looks like "me too" and just shouting for attention?

I am sure it makes the Board, senior management and physicians feel good. All the while your target audience receives absolutely no information that will help them make some of the most critical choices and decisions in their life.

And that can't go on any longer.

Time really to stop treating the healthcare consumer like they are some kind of idiot. People are coming to the realization that healthcare is not such the "black box that the consumer can't possibly understand the complexity of medical care".

It's time for meaningful information in the marketplace that will allow the healthcare consumer to become informed, educated and participatory in the care decision-making process. Time for marketing to begin to lead in hospitals instead of being order takers, and talking nonsense in their markets.

You should be transparent and talking about your outcomes. You need to engage in a meaningful dialogue that gives individuals the information that they want and need. The healthcare consumer is hungry for information and are searching the internet and other sources about you and how you perform. They are paying more of the cost. Demanding more say in what goes on. And don't like being treated like they are some small child who can't make a decision.

To use an often quoted metaphor, the wave of change is upon the hospital industry as we move from provider-dominated and controlled decision-making, to consumer and patient-directed, controlled healthcare. Your choice, change, be responsive and surf the wave to success, or be washed over and deposited on the ash heap of history.

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

For more information, or to discuss your strategic healthcare marketing, customer experience management, marketing/sales integration or start-up needs, you can learn more at my web site the michael J group; email- michael@themichaeljgroup.com; or phone by calling me at 815-293-1471.

Marketing Accountable Care Organizations

Entering the new world of healthcare where quality and accountability are drivers to reduce cost, how do you market an Accountable Care Organization (ACO)? Especially as healthcare providers, namely doctors and hospitals, 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.

Anybody seen the new United Health commercials? They are already touting call us, we can send you to the best doctors. Anywhere in the country. Organizations that control the data, control the market and control the price.

So for those doctors and hospitals looking at ACOs, better get your track shoes on. The big insurers are already moving forward with physician groups and pilot programs to test the concept.

In the end, I believe that insurers will control ACOs by the simple fact that they have the data. They already know which doctors practice the best quality and most efficient medicine. The insurers already know which hospitals provide the most cost-effective and quality-driven care. All because they control the claims data. Insurers analyze, predict and can move much faster than others can. Stockholders demand it. So, while tax-exempt organizations engage in their annual lets build consensus before we can move forward on the idea, you are already late to the market and at a decided disadvantage.

Besides, I wonder if ACOs really pass the smell test of what Clinton tried to do in the1990s? And that failed. Maybe what we really have is the same attempt re-branded for 2010?

Marketing Accountable Care Organizations

Brand. Quality. Data transparency. Service. Price.

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

How you position your ACO vies 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 overs anymore.

Co-brand you member materials with insurers for members to educate and inform abut your ACO. Same with self-funded employers. Go to employers work site to reach employees.

Create a separate web site and social media strategy for the ACO and co-brand where possible, have everything online for patient education materials to forms and payment mechanisms.

Need an easy to read and understand dashboard that reports on quality measures for consumers, insurers and employers.

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.

Keep in constant communication with your members. Email is best. Use video emails and always , always have a call-to-action message.

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 differentiators. Step out and be creative.

There is more you can do, but know this should keep you pretty busy.

More news:

Healthcare Marketing Matters is now read daily in over 20 countries around the world in excess of 550 page views a month. Welcome to the newest readers: Taiwan, Hong Kong, Singapore, South Africa and the Philippines.

Michael Krivich is Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association and can be reached at michael@themichaeljgroup.com or 815-293-1471 for consulting services in strategic marketing, media relations and interim marketing executive leadership assignments. Huthwaite SPIN selling trained and a Miller Heiman Strategic Selling alumni, both highly respected and successful international sales training organizations , I can lead your organization though the challenge of integrating sales and marketing.

Revenue and Marketing Opportunities Due to the Affordable Care Act

With the implementation of the Affordable Care Act (aka healthcare reform) underway, do you think that there are any revenue and marketing opportunities?

A good questions since many, if not all of the current health insurance plans offered by employers either through a third party, or as self-insured are in grandfathered status. But that should not stop you from looking at the Affordable Care Act (ACA) innovatively and creatively to find and capture those revenue opportunities.

The basic reason is simple, employers do give a damn about grandfathered status, but will be unable over time to maintain it. In the business world, cost is king. Period. Employers will do anything they can to drive down that cost by making changes in co-pays, coverage and carriers. When these changes are made grandfathered status is lost. If you're not planning and getting ready to execute your revenue and marketing strategies now, you are already behind in the game.

Think Walgreens and CVS/Caremark are waiting around and not planning with their work-site and retail clinic programs?

Your first opportunistic date is September 23, 2010.

On September 23rd, the Preventive Services Covered under the Affordable Care Act become a reality.

The Opportunity

There are three primary areas: Covered Preventive Services for Adults; Covered Preventive Services for Women, Including Pregnant Women; and Covered Preventive Services for Children. I am not going to go into great detail here as there are a large number of covered services in each category, so if you follow this link to http://www.healthcare.gov/law/about/provisions/services/lists/html where
you will find all the information in great detail.

Important point to remember. These are services that must be covered without people having to pay a copayment or meet their deductible, when these services are delivered by a network provider. Be that network provider.

What you need to do is create a comprehensive preventive care product offering in these categories, price it accordingly and sell it to your exiting insurance companies and employers in your community. Screenings lead to diagnosis, and treatment. Revenue and volume. It's a straight line from one to the other if you are out in the market. Cost is king and if you are not cost competitive, you won't get the initial business and potential downstream revenue.

This play is B2B, B2B2C and B2C, requiring close communication and collaboration between business development, insurance contracting and marketing to pull it off. Create a strategy, develop the tactics and then execute. Remember, the view always looks the same if you're not the lead dog. Consider co-branding with the insurance plan and employer.

Don't stop there.

Marketing should be part of any discussion that's going on and it's not just make me some pretty materials. You need a strategy, clear brand messaging and tactical execution across a wide array of channels and communication vehicles. Your audiences are: insurance plans; employers; physicians; TPAs and consumers. Tactics include direct sales; video emails; direct mail to covered members; web; social media; media relations; community events and work-site programs. Deliver what you can on-site, in retail locations and create special fast-track registration and service delivery methods for preventive services. Keep your cost down and compete.

Be accountable. Be Measureable. Lead your markets. Healthcare is changing, don't get left behind.

Lots to do and little time to do it.

Michael Krivich is Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association and can be reached at michael@themichaeljgroup.com or 815-293-1471 for consulting services in strategic marketing, media relations and interim marketing executive leadership assignments. Huthwaite SPIN selling trained and a Miller Heiman Strategic Selling alumni, both highly respected and successful international sales training organizations , I can lead your organization though the challenge of integrating sales and marketing.

The Re-Emergence of Centers of Excellence

Are you ready?
Ready for the re-emergence of Centers of Excellence under healthcare reform?
Centers of Excellence for the longest time were really nothing more than someone in a hospital or a group of doctors telling everyone that they were a Center of Excellence (CoE) for Cardiology, or Oncology, or Neuroscience, or Women's Health to name a few of the more "popular" CoEs. With little objective data- outcomes in areas such as financial, quality, satisfaction etc, many healthcare institution simply said they were a CoE for a particular service line. A little paint here, new wallpaper there, designate an unused hospital floor or wing the area, maybe even generate some fundraising and donation opportunities to name it after someone of community note and presto, a Center of Excellence.

Okay, that was probably a little overboard for some organizations took CoEs seriously and did have objective financial and quality measures which they communicated the benefits of to Board, payers, physicians and community. They built a brand that was sustainable. But as with most things over time, the concept was short lived and unsustainable as practiced across the healthcare industry.

I digress a little.....

Foolish me, thinking that this kind of practice has declined. Recently some of the smaller for-profit companies in the specialty pharmacy industry are doing the very same thing and making the very same mistake the hospital industry made in creating CoEs. Just because you say you have a CoE, doesn't mean it is one. When physicians and nurses are not involved in creating the care protocols (and that means more than one nurse and two doctors), just because you say something doesn't necessarily make it so. When its driven by Sales, the nightmare is beginning. Delivering a medication on time is expected and not a single CoE measure.

Now the game has changed
Due to healthcare reform, I am predicting that Centers of Excellence will be making a big come back. Healthcare organizations going forward over time will be paid based on quality, not quantity. That means quantifiable quality and best practice medicine. Indicators yet to be developed that are standardized so that all hospitals or clinics stating that they have a CoE for any service line, disease state or treatment will have to meet. Your reimbursement will depend in it.

Marketing needs to be at that internal product development table for the reemergence of CoEs. Pick what you do best.

What to do
First and foremost, learn from your past mistakes. And please, please do not use "world class" in your communications. Hint - if you are not treating individuals from around the world, you are not world class. Few healthcare organizations can make that claim. And the majority of you out there are not the Mayo Clinic, Cleveland Clinic or the University of Chicago to name a few.

Develop those outcome indicators based on current research and best practice for a service line or treatment and other quality, financial and patient satisfaction indicators. Identify your target market segments and messaging about what you are doing for physicians, payers, patients and community. Talk in real terms not fuzzy you love use because we are a CoE.

One last point, make your marketing plan strategic first, tactical second, and sustainable thirdly for over a long period of time. Use traditional and online channels. And most importantly of all, bring value; for the healthcare consumer of the near future will be buying based on price and quality. The sooner you start demonstrating quality and price, the better off you will be.

Mike Krivich is a Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association. He can be reached at michael@themichaeljgroup.com or 815-293-1471.

The Future of Healthcare Marketing Under Reform

Why do we need marketing?

I can see it now, CFOs and other senior managers in hospitals and health systems around the country going … “Tell me again…why do we need marketing? After all by 2014, millions of uninsured will be insured. Sure we face reimbursement cuts, but we can weather that” and the conversation goes on……

Marketing will be more important than ever!

As we enter the brave new world of healthcare reform, several significant events will take place over the coming couple of years for which most healthcare organizations are not prepared for:

Transparency
Bundling
Value purchasing
Demand management
Consumer choice

What will be required is a refinement of marketing strategies, tactics, integrated messaging and excellence in execution for the brave new healthcare world. Marketing needs to be closely aligned with the organizational strategic, business development and financial plans

The new marketing environment.

Competition is not going by the wayside. It will only increase as more for-profit corporations with deeper pockets enter the market. Mergers and acquisitions will not go by the wayside either. As a matter of fact, I would not be surprised to see more mergers and acquisitions by healthcare organizations in preparation for 2014.

The most profound change due to reform is that you really no longer have patients. You have true consumers. The new “patient” is a consumer who is already or will be, price-savvy, quality-conscious, knowledgeable and demanding.

Hospitals have little if any experience in true direct to consumer retail marketing. I believe that reform finally takes the last step in commoditization of healthcare where people will buy on price and quality. The market equation going forward is BtoB, BtoBtoC and BtoC.

Strategic Marketing Plan, Tactical Marketing Plan and Flawless Execution.

You will need a strategic marketing plan leading to a tactical marketing plan for each of the following audiences that you must flawlessly execute. The market is a hash mistress and without these three components, you will find out how harsh the market can be. Your audiences are:

Consumers
Physicians
Insurance companies
PPOs
TPAs
Medicare and Medicaid
Legislators at the State and Federal Level
Employers
Your employees
Self-employed
Other health systems
Pharmaceutical manufactures*
Home Health agencies
Social Service Agencies
Community groups
Retail pharmacies
Ambulatory treatment centers i.e. infusion services

A little explanation about why pharmaceutical manufacturers as an audience is warranted here.

Over 600 drugs in the development pipeline are either infused or injected medications requiring medical administration that fall into what is known as the specialty pharmacy area. The cost of drugs and changes in insurance plans regarding physician “buy and bill” practices find very few physicians participating.

This leaves a market open to the Walgreens, Apria’s and others of the world who already have existing infusion centers and it can be assumed are planning to increase their presence in the healthcare market. Failure to enter this market in a timely fashion means you could be leaving potentially millions of dollars on the table to the likes of Walgreens and others who are refining and expanding those strategies and already have the pharma relationships that will give them access to these drugs.


Moving forward.

There will be more on healthcare marketing and reform going forward. But for now, a lot of work is needed aligning healthcare organizations and marketing departments to the new market under reform. That will require leadership, decisiveness as well as the ability to refine strategies and execute them flawlessly.

I can be reached directly at 815-293-1471 or michael@themichaeljgroup.com for healthcare interim executive management, marketing strategy development, public and media relations, and crisis communications services

The Brave New Healthcare Marketing World 2010 And Beyond- Its All About Demand Management

The world as you know it is changing forever, so better for you to face the brave new world of healthcare marketing in 2010 and beyond, than to be on the tracks of an oncoming train like a deer in headlights and be hit unprepared.

Assuming healthcare legislation will pass in early 2010, its time for healthcare systems to start thinking and learning about demand management.

Not the generating type of demand for services, but managing the demand that will naturally come from 31 million plus people suddenly having access to health insurance and healthcare services. Granted, the reforms will phase in over the next few year until 2014, when the healthcare reform actions will be fully in place. The coming demand for services will be unprecedented. And the current configuration of the healthcare system across the country for care delivery is not ready. Not ready at all.

Hospital beds taken out-of-service over the years. ERs strained from over utilization; lack of nurses and primary care physicians; this is a marketers dream. Maybe not to the CEOs and COOs out there, but you have an underutilized asset. That's assuming of course that you do have marketers in your organization and not just people doing stuff and making pretty brochures. If you don't you're in trouble.

Marketers can play an important part in this generational transformation process. It's time to step up and step forward and lead a transformation in healthcare marketing that is long overdue.

Running an advertisement attempting to generate demand for a services is not the same as understanding local market forces at play and how much potential demand exists for services in your community. The healthcare consumer is becoming more mobile than at any other time in the history of healthcare. Choice, convenience and access. Can you meet those needs?

The Walgreens, CVS and Walmarts of the world already understand this and with retail clinics, home care and ambulatory infusion centers they are already well positioned to take advantage of all that new demand that will be coming on-line. That's your business and they will do it faster, cheaper and with better customer service.

It all about managing demand, customer service, and the right mix of docs and services. Otherwise, long wait times for care and procedures, poor customer services and patients choosing to go where they can obtain needed care.

A mobile healthcare consumer. A hospital and doctors worst nightmare. Unless of course you can manage demand and deliver exceptional customer service.

With change come opportunity. Hopefully you won't lose that opportunity.

Happy New Year everyone, 2010 is going to be something.

I can be reached at 815-293-1471 for strategic healthcare marketing consulting services.

America's Healthy Future Act 2009

The following link will take you to the 223 page proposed U.S. Senate Finance Committee healthcare reform bill released today entitled America's Healthy Future Act 2009. This will be introduced to the Senate Finance Committee on September 22, 2009.

Happy reading it if you really care about what is going on.

http://finance.senate.gov/sitepages/leg/LEG%202009/091609%20Americas_Healthy_Future_Act.pdf

Battle Lines Are drawn

With the Senate yesterday introducing a HC reform bill, its clear that the battle lines are being drawn between a government insurance option vs big insurers. Expect the Obama PR team to hammer big insurers and enhance the public already aving a strong dislike of healthcare payors.

What does that mean healthcare providers?

Watch the battle closely, you will have to choose.

What to do.

LEVERAGE, LEVERAGE, LEVERAGE...

Marketing departments should be working with senior leadership and in their communities to get a pulse from all constituent groups, not just favorites on the topic of healthcare reform.

As issues develop create media statements for local press on why you do or do not support.

Consider offering your facility as a town hall meeting place.

Find out where your docs are at. Help them understand the issues and develop PR/Media kits for them to use.

Consider web site updates and links to various organizations.

Become the local expert source for commentary and opinion.

Get leadership up to speed and in an Executive Speaker's bureau on the topic.

Move fast. Be proactive . Define your usefulness in this process.

News Flash, Healthcare Reform

House Democrats have just introduced a 1,000+ page healthcare reform bill. Buckle up, Life is going to change as we know it. Healthcare marketing departments now is the time to start proving your worth and doing some serious marketing. Otherwise, don't need you in the new environment.

Pharma, hospital, healthcare reform and marketing

Saving money?

Okay, who is kidding whom? Pharma gives up $80 billion for healthcare reform for Medicare Part D. Hospitals get on the bandwagon and give up $155 billion in Medicare funding. Total savings $235 billion. Is it real savings or just slowing the growth? Medicare and Medicaid programs are never really cut, just the rate of spending growth slows.

Its just the gov doing their own cost shift dance. You, me, we all pay for these "savings".

Biologic drugs for diseases under reform?

Pharma now wants legislation passed giving them a 13 year exclusivity on biologically derived drugs before biosimilar generics can be introduced. Granted they are complicated and expensive to produce, but really, 13 years to recover costs? Nonsense! I say 6-7 years max and then bring on the generics. Its not reform, just the same old game with different clothes.

Hospital marketing departments, time to tack action!

So hospital marketing and pr departments, what are you doing to drive change in your strategy and tactics to be ready for the new healthcare environment? If you haven't started already, you are behind the eight-ball.

Hint......Focus on PR and media relations. Money well spent and you can produce an ROI. Stop the silly ads.

Thoughts for the future

Video releases

Next year how about your healthcare organization producing some video release of with docs explaining what happens when a firecracker goes off in your hand. Use a crash test dummy. Great visual for media. Put it on your favorite public access channel too. At the very least place it on your web site.



Hospital pay raises

I know lots of people who are not getting raises in hospitals this year. But somehow there is always money for the CEO and senior team for a job poorly done. Can you say like, do the right thing and not accept a raise?



Time for a new marketing book

Your marketing is making you look stupid. How is that for a title? Starting on the next great healthcare marketing book and consulting tour. Its time for the industry to wake up and do it right before healthcare reform comes along and the playing field is leveled. How do you spell differentiation?



Healthcare Reform

Speaking of healthcare reform... any clue on how you attract those individuals who can afford to pay privately and not wait in line for service? The next real battleground for revenue.



If you don't think there will be long lines and wait lists, just think about all those hospitals beds taken out of service when 47 million suddenly get access. Can you say, beds in the hallway?



Big insurance is in trouble and facing national healthcare on some level. Why should an employer pay outrageous premiums when they may have the possibility to opt into a government program. The financial analysts, Wall Street and investors will hate that. Too bad you already made your money.



Be a tax-exempt organization, you can behave just like a for-profit and not have to pay taxes. Pretty good deal



LinkedIn, facebook , twitter

If so inclined, you can follow me on LinkedIn, facebook and twitter now too!



Happy 4th of July everyone.

Billions and Billions and Billions......

$150 billion dollars for healthcare in the stimulus bill, $19 billion of which is for IT. Think everyone is trying to figure out how they get theirs? And I don't mean the hospitals and IDNs. I figure McKesson and Cerner are well on their way, including a host of other niche players (small and large) healthcare IT providers trying to figure out (as if they haven't already) what's in it for them.


With all the different systems and no common standards will this turn into a really more expensive version of the Betamax vs VHS video tape format wars from the mid 1980s with that ancient technology of VCR?


Now the budget contains another $600 billion plus for healthcare reform. All told, this totals in excess of $700 billion. Just the first down payment for fixing the system folks. I bet the AHA and AMA are busy figuring out how much they can get without having to change anything.


Like I said in previous blogs, its all about politics. Obama being a veteran of Chicago politics, knows that when he figured out how everybody gets theirs, reform happens. It has to happen. It is going to be expensive.


Now for all you CEOs out there who think they can hold on for a couple more years and things will go back to the way they were, hold on for the ride. If we can come up with a European style healthcare system- maybe. If we have the Great Britain Universal Healthcare System- here comes rationing and long waits.


To all those hospital marketing departments out there, here is a clue for future activity regardless of the system. Americans hate to wait in lines. So, your job is to figure out who can pay privately to not wait in queues for service. That's the nugget.

Why? Think about what happens when you suddenly increase demand and all those hospital beds that have been taken out of service. Combine that with a primary care physician shortage and lack of RNs, you get the idea.


Anything else and you have to hire me as a consultant.


Cheers........

Universal Health Insurance Coverage

As the Democratic primaries come to a merciful end, focus will shift to the November general election. The topic that waxes and wanes depending on which voting group the contestants are reaching for is the rekindled discussion on national health insurance.

Clearly, as time and time again we are reminded, the healthcare system is in crisis and something must be done. No argument there. The question is fixed by whom and how much is this going to cost? Will the American public be willing to see taxes rise to support a universal health system? Will the insurance companies willingly give up billions of dollars under a one-payer system? Will the healthcare providers see this as a the savior of their way of life?

Who has the ability to bring all of the groups together, consumers, doctors, hospitals, nurses, insurance companies, government, employers, states, etc.? Any meaningful reform will need to be accomplished in year two and three of any new administration. Should anyone consider that reform can be accomplished in year one of a new presidency is frankly, dreaming.

All of that aside, let me pose a series of questions. If one has been reading the reports now circulating, we have several shortages, doctors, nurses and other clinical health professionals. Additionally, over the last decade, treatment patterns have shifted to hospital outpatient and free-standing ambulatory settings. The end result that a significant number of hospital beds nationwide have been permanently removed from the available inventory.

Let's for a moment say that consensus is reached in a remarkably short period of time and we have some form of national health insurance for the 47 million plus who have none. Think the system is in disarray now? What do you think will happen when suddenly 47 million men, women and children have access to the care they need? They have access to the right care, at the right time, in the right setting. And this does not even address the illegal immigration discussion.

Some form of national health insurance will generate great demand on an already taxed and over extended system. Bed shortages, waits for care, queues are what await us as we move forward. Costs will be controlled not by improvements in the quality of care, but by a natural process of access being limited due to excessive demand placed on services that the current healthcare system will be unable to provide.

A burgeoning new sub-segment of the healthcare system will arise. Service will be provided on an immediate basis to those who can pay privately for care outside of the system. A three tier system so to speak, those who can pay, those who have private or employer health insurance and those who have government. The more things change, the more they stay the same.

I am not saying that we should not have national health insurance for 47 million people. Personally, I believe that in one of the wealthiest country's in the world that it is unthinkable that we have such a situation.

This is one very complex issue and until all the issues are out on the table and under discussion instead of the simplistic proposals and idealistic views, change will happen and the unintended consequences of goodwill and policy will make an already bad situation worse.

Competiton in healthcare? Now that's an oxymoron.

A most interesting column appeared in the Tuesday, January 29, 2008 Wall Street Journal "The GOPs Prescription for Health Care", by Grace-Marie Turner. A good read and provides valuable information. Ms. Turner is the president of the Galen Institute and editor of "Empowering Health Care Consumers through Tax Reform", University of Michigan Press, 1999.

But and this is a big but, the premise of empowering consumers is that competition in the marketplace will fix the healthcare ills of the US faces some serious questions. On the face of it potentially true. In most markets competition drives down cost, improves quality and diversity of choice.

Healthcare does not operate as a true free-market competitive environment. It is more complex than the private health insurance, workplace, choice debate. The fundamental problem with the healthcare landscape is that until the very basics of regulatory reform are made to impact and make it a true competitive environment, all the tax reforms, HSAs, etc., will not alter the current crisis.

Right now, tax exempt healthcare organizations through Federal and State regulation and Certificate of Need laws, are able to charge higher prices, form cartels to legally block competitors from expanding services or even entering the marketplace and collude. That does not describe a competitive environment. That sounds like a Justice Department probe for anti-competitive behavior, collusion in the marketplace to fix prices etc. We don't accept that behavior in other industries why do we accept that in healthcare?

I am sure that when the explosive growth of healthcare started motives where high, community good meant something and community leaders were trying to do the right thing at the right time. Today's world is fundamentally different that the 60s, 70s, 80s, or even the 90s. Strong bold regulatory action is needed first.

Unless fundamental restructuring of the tenets of the competitive healthcare market takes place, reform under the various proposals are not possible, unless it is universal and single payer. And heaven help us if we go there.

Healthcare market regulatory reform is something that neither party nor the candidates are addressing, except in some of the best political speak that I have seen in years.

The more things change, the more they stay the same

Economy

With the economy nearing recession it is a safe bet all the talk about healthcare reform and national health insurance will slow down. People want jobs and economic security. That debate is beginning to overshadow everything. Politicians are like a 3 year old child's short attention span and they focus on the flavor of the day. Until someone comes up with that private government combo plan for reform, its dead in the water. Look for incremental change that tinkers around the edges but fails to address underlying systemic issue. If real change is going to come it will have to come from employers large and small. As the old saying goes....Money talks and ........, well you know the rest.

Hospital margins

We all know that hospital margins for the most part have been showing signs of improvement the last couple of years. With the growth in spending in Medicare and Medicaid, and CMS realizing its out of control faster than they even thought, reductions are in the works. That will pace more pressure on margins. Also, hospitals have done very well thank you very much, in the past few years with their investment strategies which has supported margin growth. With the current state of the financial markets, some will take a financial bath. Look for losses especially with the stand-alones going forward. Higher interest rates for bond issues as well because of the sub-prime market meltdown, lower margins etc. As layoffs become more prevalent in the general job market more uninsured will be seeking care further increasing bad debt and adding to margin compression. Oh wait, my bad, bad debt is really community benefit as they like to say.

Mergers and Acquisitions

One would predict that merger activity will increase this year and for the foreseeable future with the economy the way it is becoming. The Justice Department will be looking very closely at these transactions. I have yet to see one where healthcare costs were reduced, duplicate services eliminated and big time leverage was gained for increased reimbursement from payers. Doesn't mean that it doesn't happen, I just haven't seen it.

Error rates

Nearly 100,000 people die every year from preventable medical errors. That's like crashing a fully loaded 747-400 every 1.5 days. Now we all know its unacceptable so why do we continue to allow that that in healthcare? Some payers and the government are going to stop paying for never events. A good start in the right direction. The jury is still out on whether or not P4P programs work. Mess with the medical communities money and you will see how fast the error rate and deaths associated with it goes down. Cynical yes, but true never-the-less.

Have a good week everyone and thanks for reading. Have some news or ideas just send them to themichalejgroup@aol.com All will be treated confidently and anonymity assured.