It's always been the axiom in healthcare, like in the movie "Field of Dreams," that if you build "it," "they" will come. The "it" was a hospital, ambulatory center or other facility. "They" were the physicians. And it was a delightful time for all.
But now "it" is a network and "they" are employers and consumers. Few of those involved in building these new entities have much experience in taking them to the marketplace.
Indeed, the customer has changed. In fact, just about all the marketing elements have changed. The four P's-product, place, price and promotion-never had it so rough.
A recent conference of the Chicago Chapter of the American Marketing Association explored some of the emerging marketing issues for integrated healthcare networks. Panelists included representatives from Aetna Health Plans, Orlando (Fla.) Regional Healthcare System, BJC Health System of St. Louis, employer purchasing groups and other healthcare players. While certainly not complete, the discussion offered some initial direction.
Price, of course, remains a central issue. Assuming you have come to grips with your costs and pricing, there are a few other areas on which to focus.
Defining the audience. For quite some
time a prevailing question has been: Is the organization based on an industrial or consumer model? It's an important distinction because it will serve as the core of strategic and marketing plans. The former assumes the provider sells strictly to big purchasers like employers; the latter assumes it is necessary to influence the end user-the consumer.
Answering the question requires deciding what role your organization is going to play in a managed-care environment. Some believe it's possible to survive simply by being a provider of hospital services to a larger entity. Being a so-called "wholesaler" of services means adopting the industrial model. The focus is on the main purchaser, and little, if any, attention is paid to the users.
Organizations that choose to be both a provider and a driver of the market probably will opt for more of a consumer model. Evidence in such states as Florida and Washington show that while alliances have strong contracting power, the consumer is still making the final choice, thus influencing actual utilization of services.
Customer satisfaction.A recent study
by New York-based Foster Higgins reported that, next to price, customer satisfaction was considered the most important determinant of success in a managed-care environment. The research indicated that satisfaction was more important than outcomes data, quality improvement programs and other considerations.
Satisfaction, we are told, is determined by the patients' experiences with providers and the consistency of service. Those elements pose a formidable challenge to networks on two key levels.
First is setting service standards. Just what is it that the networks want their customers to experience? Service standards now cover everything from waiting times to accuracy of billing to clinical performance. The keys are measurability and scope. In other words, how extensive should the standards be? Suffice it to say traditional patient satisfaction measurements on food, courtesy and the like will only be a portion of the data that will be collected and reported.
Next is consistency of service. While individual entities have worked gingerly on customer satisfaction within their confines, a network is a different animal. The network is a collection of cultures that will be required to, as they say, all sing from the same hymnal. And sing on key. That will be tough to achieve even if the network is fortunate enough to have operational control over all the network's partners. To change behavior will require a serious commitment of resources.
Value of the brand.During an
open-enrollment period in one market recently, it was reported that the lion's share of new enrollees went to one major provider simply because its name started with the letter A, putting it first on the list of options. That's nice for them, but what do you do if your name starts with Q or-egads-Z?
Brand equity-often confused with image-has always been a controversial topic among healthcare managers. As a result, executives have not invested enough in communicating the value or point of difference of their institutional brands. In a physician-driven world, many probably reasoned it was unnecessary. But in the new healthcare environment, the perceived value of the brand may be a critical determinant of success. In the above example, customers obviously weren't in a position to make an informed choice, so they just made an easy one.
Brand equity often is measured by customer preference. In the physician-driven market, physician preference ruled. But in a free-choice market, employer and consumer preference are the more likely harbingers of success, particularly when compared with other key indicators such as market share. Historically, market preference often predicts market share. The theory is that the more people want you, the easier it is to build business. Conversely, if market preference is lower than market share, one could expect share to drop. In your network planning, a reality check of preference scores would be a wise strategic move.
Many elements influence preference. Every market is different. Longstanding measures such as convenience and specialty care still will play a role in many decisions in the short term. But soon, buyers will have hard data to start differentiating brands in more ways than anyone ever thought possible.
Data by itself is rarely the sole factor in decisionmaking. Consumer research shows a wide disparity in the acceptance of so-called "outcomes data" for selecting a hospital, unless, of course, the data are severely negative. Similarly, other research shows that words such as "system" and "continuum of care" are met with more confusion and skepticism than enthusiasm.
The skilled marketer will have to carefully craft performance data with a humanizing message, balancing fact with a true benefit for the purchaser.
If you are still in the network building stage, think now about how you will get them to come.