As out-of-pocket expenses for medical care continue to rise for consumers, the need for hospitals to become as transparent as possible with pricing is more important than ever. Clearly, consumers should have greater access to what their treatment will cost so they can evaluate their options and make the best, most cost-effective decision.
But is this happening? Do consumers shop around for the best price when their health is at stake?
A recent Harvard Medical School study showed patients with access to a price transparency tool spent the same amount of money on their outpatient care as those who did not have the information. The study, which involved outpatient care for 149,000 employees at two national companies in 2011 and 2012, found that only 10 percent used the tool.
The Organization for Economic Co-operation and Development Health at a Glance 2015 edition reports that the US spends more than any economically developed country on healthcare because of, in part, the “highly fragmented nature of the health system.” There is a lot of waste within the US healthcare system in the United States, consumers have no real understanding of what they are spending and they are not taking advantage of the tools available to lower their spending.
It Starts with Perception
Even though there is no evidence that higher prices translate into higher quality, many consumers still believe this to be true. In a survey published by Health Affairs, a journal of health policy research, most of the people who had compared pricing believed price and quality were associated. Thus, the challenge for healthcare providers is to train consumers to understand pricing and how it relates to quality, and to educate them on how best to compare the medical services being offered.
Price transparency was designed to give consumers more control of their spending and, by extension, lower overall healthcare spending. The Harvard Medical School study revealed a need for healthcare providers to find better ways to engage consumers to research medical costs.
“We’re trying to change a culture here,” said Barbara Anthony, a senior fellow in healthcare at the Pioneer Institute, a non-profit think tank, in an article by the Boston Globe . “You don’t do that by saying, ‘Here’s a site, go use it.’” According to Anthony, insurers need to “double down their efforts to motivate consumers to choose high-value, low-priced services.”
In an article that appeared in the American Medical Association’s AMA Journal of Ethics, a key tie of cost to quality would be to tailor payments to decision-making entities (clinicians or health care organizations) based on outcome measures. Increased adoption of value-based purchasing practices and the creation of accountable care organizations, which tie reimbursements to quality metrics, are examples of this.
Transparency Tools Made Easy
Hospitals can make price transparency tools more user-friendly through mobile apps, text messages and emails that encourage consumers to take advantage of the pricing resources. An immediate reward such as a gift card for using a pricing tool is another good idea.
Insurance companies and healthcare facilities can work together to create tangible benefits that will drive consumers to research medical costs. It works. For example, in another study by Health Affairs, patients given a price transparency tool generally choose less expensive options when selecting an MRI provider.
Educate and Build Loyalty
Consumers obviously want to reduce their out-of-pocket expenses and the best way to achieve that goal is to have the ability to shop and compare when considering a medical procedure. Healthcare providers that enable consumers to do that through pricing transparency that is quick and easy will gain consumer trust. You may not always be the least expensive, but if you can explain why, you will gain consumer respect and a new patient.
By engaging and educating consumers from start to finish with detailed pricing and data, patient satisfaction is enhanced and loyalty is built.
I’m always on the lookout for interesting observations about the latest changes, trends and tactics in healthcare marketing. Here are five takeaways from marketing strategists I admire:
- While physician recommendations are the most important factor in provider selection, additional information offers an influential stamp of approval.
Research shows that advertisements build brand awareness of hospitals and that there is a relationship between this image building and market share. Ads are especially effective in adding credibility once a PCP has recommended a particular hospital or provider. (Jeff Steblea, Market Street Research)
My comment: Invest in a complement of B2C and B2B brand marketing activities and find ways to introduce more metrics-based success measures to validate the investments in each (see #2 below).
- Use measurement to market your marketing.
Tag everything to know what is working and ensure that marketing gets proper credit for it. Create baselines, analyze metrics, look at what isn’t working and fix it. Look at financial investment vs. increase/decrease in traffic. Keep dashboards simple, especially when getting started. Here are some great tools: Wistia for video analytics, Marchex for phone call tracking and Sprout Social for social media. (Dan Dunlop, Jennings & Brooke Tyson Hynes, Tufts Medical Center)
My comment: A good place to start thinking about how to better measure ROI is the fabulous SHSMD publication entitled “Life Beyond Promotion: Core Metrics for Measuring Marketing’s Financial Performance”.
- Simplify market facing brand architecture.
Today’s healthcare consumer gets confused by the network of providers they have to navigate. They deal with hospitals, systems, physician groups, labs, imaging centers, even holding companies. And they get communication and bills from all. (Chris Bevolo, ReviveHealth)
My comment: Streamline brand architecture and naming conventions to cultivate consistency, clarity and brand recognition, and, ultimately, brand recall and value.
- Be strategic in managing change and the “endings” involved.
Our ability to manage organizational change is particularly applicable in healthcare these days because of acquisitions, mergers, affiliations, re-brands, etc. If we don’t understand our role in change, it becomes a lost opportunity. When employees affected by these changes are left in the dark, they will misunderstand. Change is inevitable and we must lead this change as effective communicators. The “people element” is often left out of the process. Ultimately, understanding is more important than agreement. Acknowledge people’s losses and understand that grieving is natural and necessary. Give people all the information they need and clarify what is and is not ending. Be open, talk and let people lament. In the end however, remove excuses to hold on to the past. (John Looney, Lahey Health & Julia Sorensen, Cooley Dickinson Hospital)
My comment: Include a plan for internal communication when undergoing any change of consequence to the organization. Bring both top and middle-level opinion leaders to the table early in the process for input and buy-in.
- The revamp of a major healthcare website should be guided by a 3-year roadmap.
Year one starts with a digital strategy built on research, digital governance, staffing plans, digital change management, tools and infrastructure. Next is site design, CMS, mobile, content development, SEO, training and analytics. Year three is the year of optimization, including patient portal, eWorkplace, content management, service lines and social media. (John Bidwell, Baystate Health & Elizabeth Scott, MedTouch)
My comment: Be inclusive in the web planning process by bringing a variety of individuals into the project early on. Pay particular attention to the relationship between marketing and IT. Be realistic about your timeline given how deliberate this process can be in the hospital setting.
The healthcare industry is ultra-competitive, highly visible, strictly regulated and constantly changing, creating unique challenges, pressures and potential stress for healthcare marketers.
An awareness and understanding of these factors will help put us in a better position to deal with the stress they may bring. So what issues raise the stress level for healthcare marketers these days?
- The consolidation and expansion of healthcare institutions.
The marked shift toward consolidation and expansion in healthcare has created an environment of tremendous change involving merging organizations, brands, people, cultures and marketing functions. Healthcare organizations are re-examining their brand communications and re-developing messaging that accurately represents these new combined entities.
- Multiple stakeholders.
CMOs have to answer to a C-suite, board of directors, physicians, administrators and other community leaders, few of whom possess marketing experience. They must effectively inform and coalesce this group, developing marketing solutions that work best for the overall good and somehow make everyone feel good about it all.
- Changing payment models and regulation.
As hospitals move away from fee-for-service, marketers are tasked with understanding new payment models, knowing how they affect a variety of target audiences and deploying the most effective way of messaging this complex subject matter.
- Healthcare is behind in its digital marketing efforts.
The urgent need to integrate the digital age into healthcare environments introduces the need to be proactive across a variety of digital channels, including web platforms, site optimization, mobile deployment, CRM, patient portals, social media conversations, email campaigns, etc. This is a difficult situation made even more challenging given the issues that are unique to the healthcare industry.
- Competing service lines.
Balancing marketing resources to be allocated to a variety of service lines has always been complex and is no less today. Acquisitions and alliances have introduced a need for fresh campaigns over multiple channels that most often have to be approved by multiple institutions. And with a more competitive environment than ever, everyone understandably wants more for their departments.
- Sensitivity of subject matter.
While HIPPA has been around since 1996, the Affordable Care Act, digital platforms and online data security concerns have all shifted the nature of patient-provider interactions to even more scrutinized levels, presenting a host of new challenges for healthcare marketers.
- Patient Demand for Knowledge
Patients are taking charge of their healthcare in ways we could not have imagined even a few years ago. There was a time when the majority of information was physician-based. Healthcare consumers now get information from multiple sources. Therefore, patients are able to drive their own healthcare decisions and interact with the medical community in an entirely new way.
What keeps you up at night? Take the first step toward a more settled landscape by identifying the factors at play. Only when you understand these issues and their underpinnings can you begin to develop solutions for dealing with them in a positive way.
How do people choose a hospital? There are a number of considerations, but understanding generational differences and how they affect selection behavior is a critical step toward new patient acquisition and patient loyalty.
Members of the Greatest Generation, Baby Boomers, GenXers and Millennials consider a variety of factors when choosing their healthcare provider. Are you developing the right message for each?
The Greatest Generation (born up to 1942): “Direction”
The Healthcare Strategy Institute study shows that The Greatest Generation selects hospitals first by physician direction, then by prior experience, reputation and proximity to home. This aging group of people relies on primary care physicians when choosing a hospital. They want to be directed. They also have rigid definitions of service, believing “the customer is always right.” While they are a declining population, the Greatest Generation has the most hospital stays.
Baby Boomers (born between 1942-1960): “Engagement”
Like their parents, Baby Boomers tend to select hospitals first by physician direction, then by prior experience, reputation and proximity. They also share information with physicians and nurses, and research recommendations before deciding. They want to be engaged. Their focus on quality of care measures is critical, as evidenced by their use of third-party comparisons and ratings as a means of decision making.
GenXers (born between 1961-1981): “Education”
This is the first generation that starts to stray from the way their parents did things, choosing a hospital by reputation, then prior experience. Physician direction drops on their list of priorities, just ahead of proximity to the home. They want to be engaged, but, more importantly, they want to be informed about their care. They want to be educated. GenXers are more likely to choose a hospital based on their most recent experience.
Millennials (born after 1981): “Connection”
This is where shifting values are most evident. Like Baby Boomers, Millennials tend to select their hospital by reputation, then prior experience, physician direction and proximity to the home. But they also value technology and seek information from multiple sources. They want to feel connected. Millennials value health information technology and, like GenXers, are more likely to switch hospitals if they lose confidence in the care provided based on their most recent experience.
So how does a hospital market to such divergent demographics?
Although loyalty is developed over many years and experiences, an opportunity exists to foster it within every age range. While The Greatest Generation values reputation and Baby Boomers are more likely to consider resources, all generations consider prior experience to be an important factor when choosing a hospital, so providing a positive experience at each visit is essential.
Understanding these differences will allow hospitals to deliver the right message, foster loyalty and remain top of mind.
The healthcare industry is conservative by nature and so is the way it is marketed. But the healthcare business is rapidly changing and conventional healthcare marketing needs to change as well.
According to the Forrester Digital Marketing Forecasts, the average American business will allocate 30 percent of its marketing budget to online/digital channels in 2016. However, according to Validic’s “Global Progress on Digital Health” Survey, 59 percent of healthcare respondents report they are either behind schedule with their digital health strategy or have no digital health strategy at all currently in place. With this in mind, it may be time for healthcare organizations to audit their marketing mix, review budget allocations and reevaluate their commitment to digital marketing.
For example, healthcare has traditionally invested in print advertising at higher rates than other industries. Research by the Content Marketing Institute and Marketing Profs indicates that 47 percent of healthcare marketers incorporate advertising in print magazines as part of their marketing strategy and 43 percent use printed newsletters. That’s 34 to 54 percent higher than marketers in other industries such as travel, banking, education and insurance. The research also reveals that healthcare marketers use blogs 22 percent less than all marketers and spend 26 percent less of their total marketing budget on content marketing activities.
This needs to change. Why? Because health-related searches are among the top three online activities in the world, with 72% of internet users saying they looked online for health information within the past year.
Clearly online marketing remains a growth opportunity for many in the healthcare industry. So why do we lag so far behind in the adoption of online marketing tactics?
Here are five factors to consider:
- A heavily regulated environment leads healthcare organizations to be cautious by nature and slow to change.
- There is a general reluctance to embrace marketing in the healthcare industry. It’s a business where the ultimate goal is patient health and marketing is by no means the star. To be on the forefront of new marketing strategies and tactics can be difficult for organizations that are far from being marketing-driven.
- Healthcare organizations have a large variety of stakeholders, all of whom have preferences for how the organization is marketed. This creates an environment that makes it challenging to adopt new approaches.
- The older demographic for many service lines, e.g. heart and vascular, consumes traditional media at a higher rate than other target audiences.
- Measurability is a digital marketing driver and, as a rule, healthcare organizations don’t do this well. It is ironic that a culture that so highly prioritizes measurement and evidence when applied to health-related outcomes has been so slow to make the measurement of marketing success a similar priority.
Perhaps if we better understand the reasons why healthcare lags in the implementation of digital marketing, we can more effectively craft strategies to correct this shortcoming, like investing in a robust and responsive web platform. A successful digital market campaign needs to commit to content marketing and coordinating those efforts with proper Search Engine Optimization, and it needs to make full use of marketing automation to communicate effectively with selected segments of your target audience.
Hopefully, leadership will take note and act soon because the longer the wait, the more acute the need becomes. Healthcare providers that don’t adapt to change will not be able to keep up with their competitors.
The same goes for healthcare marketers.
Whether you are a heart surgeon, neurosurgeon, dentist or dermatologist, it is virtually impossible to build your business without patient referrals from primary care providers. According to a study by JAMA Internal Medicine, the number of physicians referring patients to other physicians nearly doubled from 1999 to 2009, growing from 4.8 percent to 9.3 percent. That represents a jump from 40.6 million referrals annually to 105 million.
Clearly, patient referrals are the lifeblood of a medical specialist’s business, so it is important to formulate a plan that will lead primary care providers to recommend you to their patients when they require care in your field of expertise. Here are some strategic ways to build patient referrals:
Communicate, communicate, communicate.
Your goal is to remind referring providers how you can help them. Identifying the right channels, such as LinkedIn, emails, workshops, etc., to build your business is essential. Creating quality content about your expertise and service is an effective means of attracting patient referrals. This content could be packaged into a newsletter, a professional alert or even a handwritten note that focuses on the features and benefits of your practice. An effective, mobile-optimized and user-friendly website is a necessity.
Take time to interact with referring providers at every opportunity.
Join them in the hospital dining room. Participate in medical society meetings. Take a physician to lunch to explain your background and philosophy. Doctors refer patients to specialty practices they know and trust. Work at knowing each referring doctor’s style and communication preferences. Keep the referring physician informed about the patient’s progress or complications. Consider yourself part of a team in caring for the patient.
Build and mobilize a strong office staff.
Your office procedures and the behavior of your staff are a critical part of your total service. Make certain calls from referring providers are taken promptly and your appointment staff understands your priorities when working with newly referred patients. Be sure written reports to the primary care physician are processed quickly and accurately. Positive staff interactions with patients are big plusses for your practice, and patients will also relate a positive experience to their referring physician.
Embrace your sources.
Identify the physicians who send you the most patients and spend extra time and resources cultivating those relationships. Inform them about updates at your practice, such as extended office hours or new diagnostic equipment. Tell them how much you appreciate them. Send written thank-you notes. Don’t take for granted that your referring physicians will always be there for you.
Remove any obstacles.
A misunderstanding about your area of specialty, your credentials, insurance plan participation or your availability could deter a referral. Be available to see a patient promptly. Make it easy for patients to get an appointment. Avoid scheduling phone tag between the two offices.
Get to know the staff members at the referring office.
Physicians may give their patients a list of specialists, but their staff often recommends the doctors they really like.
In the final analysis, the way to build patient referrals goes beyond providing high-quality care. You must reach out to primary care and other referring providers. Get to know them and make sure they know you. In so doing, both sides will see the benefits of working together.
In the new era of the Affordable Care Act (ACA), Accountable Care Organizations (ACOs), medical homes and pay for performance, the primary care physician (PCP) is fast becoming the gatekeeper for admissions, referrals and treatment. According to a survey conducted by the physician recruiting firm Merritt Hawkins, for the first time, primary care physicians are driving more hospital revenue on a per-doctor basis than specialists. The study revealed that in 2013, median revenue per primary care physician is nearly $1.6 million, while specialists account for $1.4 million per physician.
Merritt Hawkins makes reference to major shifts in healthcare that have emerged since 2010. The ACA is of course a major factor, assigning more responsibility to PCPs to cut costs and keep patients healthier. As a result of these increasing pressures and challenging new revenue models, more physicians are seeking hospital employment instead of owning their own practices. According to an Accenture analysis, 36% of practicing physicians now hold an ownership stake in their practice, down from 57% in 2000. As a result, hospitals are capturing more direct primary care revenue as opposed to just referral revenue.
These trends reflect the growing role of primary care and consequently, the need to focus on improving the way in which these practices are marketed. Add to this the fact that millions of newly insured individuals will be entering the market via healthcare exchanges on January 1st and they will be looking for PCPs. Building a differentiated market presence for primary care and an orchestrated approach to acquiring covered lives is now more important than ever.
Understanding how consumers make their decision regarding who to use for primary care is the first important step toward building an effective healthcare marketing campaign. People learn of potential providers through a variety of means: personal referrals, advertising, online directories and information hotlines. So the healthcare marketing strategy must start by building communication tactics that will connect with likely targets at these touch points, create brand awareness and put your providers into consideration.
With your healthcare marketing strategy engaged and your providers on the “shopping list” of a growing number of healthcare consumers, decision making moves to other stages of consideration, not unlike any other typical buying process. These include the evaluation of the alignment of the provider with personal needs and wants, the comparison of features and benefits and the analysis of value. During this process, healthcare consumers make assessments based on the same new market drivers in play for all types of medical care in our evolving consumer-centric market: 1) outcomes (quality), 2) patient engagement (experience) and 3) price (value). Then for primary care, we add a fourth important factor: 4) location (convenience).
With competition as fierce as ever and the stakes so high, being passive and conservative is not an option for hospital marketers. The good news is that there are opportunities to gain market share for those who understand their markets and how they respond to messaging and initiatives.
Healthcare marketing continues to evolve and adapt in a time when changes in healthcare have come quickly. Here are some things to think about:
1. You can’t engage people who don’t believe they need your services.
The fact is that people have an overly rosy picture of their health. One poll showed that nine out of 10 Americans believe they are healthy. You need the right message to reach them. If you say seven of 10 people will have a problem, most people think they will be among the three. A positive spin can work better … “let us help you stay healthy”.
2. In healthcare, ideas sell, not things and procedures.
Outside unique specialty care, much of healthcare is becoming a commodity. Distinction will be built around values.
- Foster trust
- Build relationships
- Connect to the community
- Embrace ethical values by affirming core values
- Emphasize education, not “sales”
3. Technology is mobilizing healthcare as never before…
by opening up healthcare globally in terms of information, transparency and diagnostics. Mobile is established, but there is much more on the horizon, e.g., Google Glass, Samsung Simband and Apple diagnostic solutions.
4. There are more than 100,000 health and wellness mobile apps available for download.
But less than three percent of healthcare apps originate from traditional healthcare players (including pharmaceutical, hospitals, health insurance and medical technology). There is opportunity for hospitals to make an impact. Key questions to ask when developing a mobile app: Will it support your brand? Will it foster stickiness (typical app usage is 2-3 times a week)? Is it a new way to help manage a health issue? Will it improve overall patient experience?
5. The impact of quality in healthcare marketing is no longer a trend, it’s the reality.
Quality ratings and transparency are important for consumer perception, but perhaps even more important to the providers that buy services for people. Employers and other payors, including major health plans and Medicare, have begun requesting or requiring data to inform their plan participants and to guide purchasing decisions. Quality messaging is most relevant for those who have a specific need, but it is also effective in increasing overall hospital perception, consumer preference and, ultimately, market share.
6. Healthcare website development:
Today’s online healthcare consumer wants to find a doctor, find a location, schedule an appointment, pay bills and access electronic medical records. Trends include:
- Minimalist design
- Growing importance of typography
- More focus on content and information hierarchy
- More transaction and commerce applications
- Higher quality imagery and increasing role of video
7. Do you have a vision of getting your docs involved in providing good online content?
Rules to live by: Take what you can get, make it as easy for them as possible, minimize their time, make it frictionless, leverage what you’ve got, give them comfort, be their mother hen, show them the return. Follow these five steps:
- Introduce your doctors
- Find your champions
- Collect topics
- Coordinate contributors
- Support engagement
8. People engage in hospital Facebook pages by specific interest. Find things people want to express and then give them the platform to do so. They will go forward and share with others.
9. Technology has made a significant impact on healthcare and that is not going to change. Technology predictions:
- Technologies such as iBeacon® will bring “location aware” features to the web.
- Mobile device manufacturers are moving towards Wi-Fi technologies for interior mapping and positioning.
- Health & Wellness is a hot niche on which device manufacturers and web/app developers will continue to focus.
10. Healthcare marketing starts with internal audiences. We can only promote externally what we can sell to our doctors, nurses and staff.
- Identify internal target groups and market teach according to their jobs, preferences, intellect, etc.
- Develop a value proposition and find ways to promote your concepts, such as posters, video, events, and merchandise.
- Develop a strategy for opinion leaders and dedicate a special effort to recruit them as positive influencers.