Archive for Marketing
by Scott MacStravic
May 1, 2008 at 9:14 am · Filed under Business of Health, Population health management, Marketing
Honesty is required by law in advertising of medical treatments and pharmaceuticals, though both are subject to some “overenthusiastic” promotion by physicians and drug companies, alike. On the other hand, there have been even more cases of overenthusiastic promotion by manufacturers of vitamins and food supplements, as well as providers of “alternative medicine” services whose methods have not been subject to scientific proof of safety and effectiveness before being advertised.
The regulation of treatments and products used in sickness care has long been a major effort in the interest of protecting patients from unscrupulous manufacturers, retailers, and providers who can easily take advantage of patients desperate for something that works, or those who rely too much on emotional vs. rational bases for making decisions about the care and providers they seek. There are certainly a large number of complementary and alternative medicine treatments that have solid evidence behind them. But in some ways, this makes it easier for unscrupulous sellers to make the case that their offering will work, by citing other examples where medicine has been wrong in concluding that previous CAM therapies were worthless.
The growing popularity of health management, of persons and populations (both deserving to be labeled “PHM”) has opened up a large new market for CAM therapies. Where CAM providers have achieved greater credibility among their patients for their approaches, and even greater success in terms of bang for the buck, thanks to their holistic approach to patient care, or their ability to enlist more enthusiastic collaboration among patients, they may be significantly more successful than are traditional physicians, at least in terms of benefits vs. costs.
Achieving a greater benefit/cost ratio is sure to make CAM providers more popular among payers, whether governments, commercial insurers, or employers. A growing number of insurers, for example, are offering, and employers as well as consumers selecting, lower-priced coverage plans that involve more use of CAM providers for health management of sickness care services. The generally lower prices they charge for their services, and lower overhead/operating costs for their practices, make CAM providers more likely to be able to compete on costs, at least.
The challenge in PHM is to promote honesty in advertising by its providers, whoever they are – specialty organizations that focus on PHM, traditional providers, or CAM alternatives – about what kind of results they are getting for what kinds of costs. If honesty in advertising were enforced in PHM, then unscrupulous or simply ineffective providers would be severely limited in their ability to attract payer clients, or even consumers, whether they pay out of their own pocket, or have a third party doing so.
There would be a significant number of current PHM providers who would probably be forced out of business if there were forced honesty in advertising, or even if there were the kind of comparative testing and reporting of outcomes and providers as is increasingly true with sickness care. Commercial insurance plans are already talking about developing and rating the performance of physician practices in terms of managing the health and costs of patients with chronic diseases. It would be relatively simple to do the same for practices engaged in protecting and improving their patients’ health, such as the MDVIP retainer medicine practices, now numbering over 200 in the US.
If honesty in advertising were required across the board in PHM as well as in sickness care, there would naturally be the same two effects as already noted with publication of comparative quality in sickness care. The lower-performing providers would strive and many succeed in improving their performance to make themselves more competitive with their higher-performing rivals. Or they would be forced out of business, as more consumers and payers would be able to “Buy Right” in PHM, as well as sickness care.
It will take a major improvement in the numbers of payer clients forcing and financing rigorous evaluation of the actual performance that PHM providers achieve. This will have to be done on a set of comparable outcome dimensions, rather than only those that individual PHM providers choose to measure or report. And there would have to be the kinds of rigorous analysis of the different results that different PHM providers get as has already been done in sickness care, and even in disease management D(M), though for the wrong reason.
Instead of rigorous scientific analysis of a number of different PHM providers and methods, there should be equally rigorous analysis of individual PHM providers’ results across their entire book of business. And instead of pursuing a ludicrous and futile answer to the general question of whether PHM works, as has characterized reviews in DM, these analyses should aim to develop comparable performance data on competing PHM providers to identify which do the job best.
This will speed up the ability of PHM sponsors and buyers to identify and selectively prefer those PHM providers who have been shown, in objective, accurate, and rigorous ways, to deliver the best outcomes. Ideally, these “best outcomes” should include both economic effects on payers, and personal health/life quality for those persons and populations that participate and invest their own time and effort, as well as their money in many cases, to achieve these outcomes.
The same amount of money already wasted on answering the unanswerable general question of whether it works could go a long way toward identifying which PHM methods work best. The general question is unanswerable because PHM, as is true for DM, is simply not one “treatment” that can be examined across different populations and problems to find out if it works. PHM and DM are a wide range of significantly different approaches, with highly varying costs and intensity, being applied to highly variable sets of problems and populations. The individual programs that do work should be the focus of analysis, not the collection of diverse programs, where some do and some don’t, virtually guaranteeing the almost always equivocal and uncertain results of studies addressing the general question.
Armed with comparative, rigorous, reliable and valid data on the performance of competing PHM methods and providers, the entire discipline and market of PHM could become dramatically more effective and efficient, and in a far faster time than is possible without such an effort. When the results of publishing such data are combined with regulated, honest advertising, PHM would have its best chance of succeeding, for its providers, its payers, and the populations that should be benefiting from such success.
by Scott MacStravic
April 26, 2008 at 11:19 am · Filed under Prevention and Health Promotion, Business of Health, Marketing
Honesty is required by law in advertising of medical treatments and pharmaceuticals, though both are subject to some “overenthusiastic” promotion by physicians and drug companies, alike. On the other hand, there have been even more cases of overenthusiastic promotion by manufacturers of vitamins and food supplements, as well as providers of “alternative medicine” services whose methods have not been subject to scientific proof of safety and effectiveness before being advertised.
The regulation of treatments and products used in sickness care has long been a major effort in the interest of protecting patients from unscrupulous manufacturers, retailers, and providers who can easily take advantage of patients desperate for something that works, or those who rely too much on emotional vs. rational bases for making decisions about the care and providers they seek. There are certainly a large number of complementary and alternative medicine treatments that have solid evidence behind them. But in some ways, this makes it easier for unscrupulous sellers to make the case that their offering will work, by citing other examples where medicine has been wrong in concluding that previous CAM therapies were worthless.
The growing popularity of health management, of persons and populations (both deserving to be labeled “PHM”) has opened up a large new market for CAM therapies. Where CAM providers have achieved greater credibility among their patients for their approaches, and even greater success in terms of bang for the buck, thanks to their holistic approach to patient care, or their ability to enlist more enthusiastic collaboration among patients, they may be significantly more successful than are traditional physicians, at least in terms of benefits vs. costs.
Achieving a greater benefit/cost ratio is sure to make CAM providers more popular among payers, whether governments, commercial insurers, or employers. A growing number of insurers, for example, are offering, and employers as well as consumers selecting, lower-priced coverage plans that involve more use of CAM providers for health management of sickness care services. The generally lower prices they charge for their services, and lower overhead/operating costs for their practices, make CAM providers more likely to be able to compete on costs, at least.
The challenge in PHM is to promote honesty in advertising by its providers, whoever they are – specialty organizations that focus on PHM, traditional providers, or CAM alternatives – about what kind of results they are getting for what kinds of costs. If honesty in advertising were enforced in PHM, then unscrupulous or simply ineffective providers would be severely limited in their ability to attract payer clients, or even consumers, whether they pay out of their own pocket, or have a third party doing so.
There would be a significant number of current PHM providers who would probably be forced out of business if there were forced honesty in advertising, or even if there were the kind of comparative testing and reporting of outcomes and providers as is increasingly true with sickness care. Commercial insurance plans are already talking about developing and rating the performance of physician practices in terms of managing the health and costs of patients with chronic diseases. It would be relatively simple to do the same for practices engaged in protecting and improving their patients’ health, such as the MDVIP retainer medicine practices, now numbering over 200 in the US.
If honesty in advertising were required across the board in PHM as well as in sickness care, there would naturally be the same two effects as already noted with publication of comparative quality in sickness care. The lower-performing providers would strive and many succeed in improving their performance to make themselves more competitive with their higher-performing rivals. Or they would be forced out of business, as more consumers and payers would be able to “Buy Right” in PHM, as well as sickness care.
It will take a major improvement in the numbers of payer clients forcing and financing rigorous evaluation of the actual performance that PHM providers achieve. This will have to be done on a set of comparable outcome dimensions, rather than only those that individual PHM providers choose to measure or report. And there would have to be the kinds of rigorous analysis of the different results that different PHM providers get as has already been done in sickness care, and even in disease management D(M), though for the wrong reason.
Instead of rigorous scientific analysis of a number of different PHM providers and methods, there should be equally rigorous analysis of individual PHM providers’ results across their entire book of business. And instead of pursuing a ludicrous and futile answer to the general question of whether PHM works, as has characterized reviews in DM, these analyses should aim to develop comparable performance data on competing PHM providers to identify which do the job best.
This will speed up the ability of PHM sponsors and buyers to identify and selectively prefer those PHM providers who have been shown, in objective, accurate, and rigorous ways, to deliver the best outcomes. Ideally, these “best outcomes” should include both economic effects on payers, and personal health/life quality for those persons and populations that participate and invest their own time and effort, as well as their money in many cases, to achieve these outcomes.
The same amount of money already wasted on answering the unanswerable general question of whether it works could go a long way toward identifying which PHM methods work best. The general question is unanswerable because PHM, as is true for DM, is simply not one “treatment” that can be examined across different populations and problems to find out if it works. PHM and DM are a wide range of significantly different approaches, with highly varying costs and intensity, being applied to highly variable sets of problems and populations. The individual programs that do work should be the focus of analysis, not the collection of diverse programs, where some do and some don’t, virtually guaranteeing the almost always equivocal and uncertain results of studies addressing the general question.
Armed with comparative, rigorous, reliable and valid data on the performance of competing PHM methods and providers, the entire discipline and market of PHM could become dramatically more effective and efficient, and in a far faster time than is possible without such an effort. When the results of publishing such data are combined with regulated, honest advertising, PHM would have its best chance of succeeding, for its providers, its payers, and the populations that should be benefiting from such success.
by Scott MacStravic
March 26, 2008 at 10:59 am · Filed under Health Plan/Payer CEOs, Hospital and Health System CEOs, Business of Health, Marketing
When I began my career in healthcare marketing in the mid 1970s, I thought I was making a significant positive difference to the inaccurately labeled “health care system”. Back then, essentially nobody did, wrote, or even said much about things like patient satisfaction, patient-centered care, etc. nor spent anything remotely resembling the kind of current marketing budgets. In essence, there were no marketing budgets, no marketers, and no marketing in healthcare at all.
I was lucky enough to get in on the early wave of its development and implementation, with two books and a host of articles, as well as some delightful consulting engagement. With nobody else marketing, it was a simple matter to achieve dramatic improvements in market share, revenue, and profits for my clients, simply by doing pretty basic marketing stuff, like devising more convenient and satisfying patients experiences, and doing the same for physicians where referrals were needed.
To describe the prevailing situation back then would make it sound like the Dark Ages, compared to the emphasis on patient and physician experience management, direct-to-consumer (DTC) advertising, the thousands of people now engaged in marketing efforts, and the awareness among executives of the necessity for significant spending thereon. We have come a long way, though I confess, not necessarily in the direction I had anticipated back then.
My original aim was to combine doing a better job of identifying and meeting patients’ and physicians’ needs, wants, and expectations as a way to achieve a truly WIN/WIN result for the healthcare organizations who did so earliest and best. My first consulting engagement in 1974 or thereabouts turned around a failing hospital-sponsored primary care center into what became a highly successful “chain” of such centers and a major boost to the fortunes of the hospital involved. But this was due to making the product, place and price elements of what the clinics offered dramatically better and more attractive/satisfying for patients, not through expensive advertising, which did not even exist at that time.
Since then, marketing has taken off dramatically in health care, and hardly any provider can afford to ignore it. I made an excellent living at it, and have been able to retire in comfort to a life of “freelance scholarship”, with a lot of research and writing, and frequent enough consulting engagements to keep up with its present developments. But it is clear that marketing in health care has had a lot of unfortunate effects that I never considered or anticipated, and we are all suffering from them.
As is pointed out concisely and persuasively in another blog, ”Health Status Is Not the Only Predictor of Medical Costs”. I recall reading about this back in graduate school before the marketing idea emerged, thinking it was an interesting factoid, but not really connecting it to an opportunity that marketing can address. But it is clear that the natural drive for healthcare providers, drug manufacturers, and other purveyors to succeed, has led them to exploit this potential, and not entirely to the benefit of patients.
The blog reminds us that only about 20% of healthcare use is explained solely by health status, though the correlation between status and use is strong, particularly at extreme levels of good or bad health. But people with similar levels of health/illness overall do not use the same levels of care. Their use, the other 80% at least, is more reflective of individual attitudes and preferences, insurance coverage, provider (“supply-based) effects, and economic incentives that apply to remaining at work vs. taking time off. [W. Lynch & H. Gardner “If We Only Consider One Possible Cause, We Will Be Left with Only One Type of Solution” Health as Human Capital, Mar 2, 2008]
Numerous studies have shown that economic incentives and geographic variations in the supply and care philosophy of physicians have yielded enormous variations in how a given patient with a given condition will be treated. Such variations come with very little evidence that more treatment is better, and a lot of evidence that over-treatment makes the patient worse, to say nothing of the added costs that all of us end up bearing, one way or another. And marketing clearly has a lot to do with promoting over-treatment.
It is easy to put a lot of blame on pharmaceutical advertising, which has promoted widespread perceptions in new “diseases” such as “restless leg syndrome” as well as new ways of dealing with old problems, such as “erectile dysfunction”. When I began my career, the only intent in marketing was to win more patients to the providers I worked with, not to drive up demand as a whole.
But to a great extent, it is impossible to separate the two. If healthcare becomes more attractive and satisfying for patients and physicians, it is bound to be used more. And all providers can benefit when a “rising tide” of increased demand “raises all boats” among providers of care. After many years of promoting the ER as a source of convenient care, with guarantees that patients will be seen within 30 minutes, for example, we now have a serious problem of overuse of ERs.
There is a “marketing” solution to this problem, of course, and many hospitals as well as the natural workings of the market have resulted in some significant “solutions”. Hospitals, themselves, along with insurers and employers, have “de-marketed” ER use with information campaigns, (“de-advertising?”), and the creation or support of alternatives, such as “fast-track” options to ERs on hospital campuses, “retail clinics”, and “urgent care centers”, though these often have trouble competing with the overwhelming market advantage that ERs have for patients of not being able to turn away non-paying patients.
The authors of the blog piece noted that they had used regression analysis to “predict” or account for medical costs in a large population, based on age, gender and general health ratings of its members. This combination of demographic and health factors achieved an R2 predictive success of only 11%, meaning that 89% of variations in use were due to other factors. It also predicted the differences in medical costs for employers with two different sets of incentive dynamics, but similar populations and illness. The expected costs of one, based on high-deductible health insurance and a consumer-directed health account, a culture of communicating the costs to employees of their employee benefits, and shared responsibility for time away from work, were over $2000 less per employee per year than costs for the other.
Perhaps more important, even when the second firm has a more educated workforce and more wellness programs, the differences in costs persist, because of the strong impact of the economic incentives on employees’ behaviors. While wellness programs and other efforts to improve employee health have been shown to save significantly through improved productivity and performance, apparently economic incentives can counter or at least reduce their effects.
To the extent that marketing promotes positive attitudes toward health care use over self-management of health and prudent management of one’s healthcare use, along with making one provider more preferred than another, it is part of the problem. But it is likely that altering economic incentives, along with the effective marketing of health and good self-health-management, will be necessary to “solve” the health care cost crisis. Efforts to make health insurance coverage universally available will not solve, but exacerbate this crisis, unless they are accompanied by ways to “de-market” unnecessary and avoidable health care use and expense.
by Scott MacStravic
November 28, 2007 at 2:16 pm · Filed under Health Plan/Payer CEOs, Group Practice CEOs, Business of Health, Marketing
While marketing in the health care industry has a fairly long history, finally, it is nowhere near as long as that of other, indeed most other industries. The modern discipline of marketing, with market research, customer experience management and targeted advertising is roughly 60 years old, having emerged soon after WWII, while health care marketing is only 30 years old or so. As a result, we have long looked for models in other industries.
As a service industry, it has been natural for health care to look at other service industries for a model to follow, or at least to adapt. The financial services industry has been suggested by many, since it involves a valuable “life asset”, namely wealth, and services that are designed to help people manage that asset, as is somewhat true with another life asset, i.e. health.
Retail sales industries have been suggested as models, since “customer service” is an essential component of health care, in addition to clinical quality. Besides, many marketing gurus have recommended that health care organizations increase their revenue sources by engaging in retail sales of health-related products. And health care has increased its availability and access through “retail” convenience clinics that are located in popular shopping malls, supermarkets, drug stores and superstores.
But there is another possible model available to health care – the automotive industry. It might seem counterintuitive, since that industry deals in a durable good, the automobile, rather than a service, but there is much to recommend the idea. Primarily, it is the fact that the automotive “customer experience” lasts far longer than the purchase transaction. People keep and use their cars for years, if not decades, and the benefits vs. costs of ownership is a major factor in customer loyalty, not merely the purchase transaction.
The auto industry has moved significantly in its marketing, from decades-old focus on the features and attributes of their product to a recent, usually overblown emphasis on the “driving experience” it offers. Prospects are being told that everyone will envy their having a particular brand, want to drive with them, and look up to owners of that car. They are being told that their lives will become better, their stress reduced, their enjoyment and excitement increased, merely because they drive a particular car.
While this marketing could be criticized as ridiculous “puffery”, it at least suggests something that health care marketers could emulate – a focus on what happens to patients after and because of their health care patient experiences and relationships. What “meaning in their lives” do patients perceive as consequences of their hospital stays, outpatient visits and physician relationships? What differences would they expect in their lives if they chose other providers and relationships, if any?
Health care providers become significant partners in a host of life-meaning experiences. From pregnancy and childbirth to menopause and aging to end of life, hospitals and physicians are frequent partners in life stages and events that the majority of patients experience. And the consequences of acute disease treatment and chronic disease management, to say nothing of proactive efforts designed to reduce the incidence of disease and injury in the first place – make major differences in people’s lives.
Until providers expand their horizons to see their “products” in terms of life meaning and impact, health care marketing will be mired in myopia, focused on features and attributes, or rare and episodic encounter experiences. Unless providers recognize and make the most of the life impacts they already have, and on added impacts they might have, hopefully in a more realistic and credible fashion than is true with automobiles, they will miss out on huge opportunities to become major “life partners” with patients, instead of modest sickness fixers.
