Resnick Unplugged

The Business of Healthcare 2018

• 5 for-profit health insurers have 43% market share
• 65% of community hospitals are part of a health system
• Less than 50% of physicians have ownership in a private practice
• Over 100 hospital systems operate a health plan
• Prescription drug spending is expected to be $610 billion by 2021
• Digital health venture funding exceeded $5.8 billion in 2017
• Vertical integration deals topped $175 billion in last 12-months

As the business of healthcare approaches 20% of America’s economy – a $5.5 trillion marketplace by 2025 – we’re seeing horizontal consolidation and vertical integration run rampant. What has unleashed this reshaping of the business of healthcare? Some point to the politicalization and ad hoc dismantling of the Affordable Care Act…replacing Obamacare with Trumpcare. Others say corporate America is finally fed-up with rising healthcare costs and declining health status indicators on the global stage. Following are five business drivers behind the healthcare transformation movement:

1. Fragmentation As much as the term ‘healthcare system’ is thrown around…it’s not a system! Across every vertical, the healthcare value chain is broken. Care is uncoordinated, stakeholders are siloed, and communication across the care continuum is disjointed at best. As consolidation brings key health delivery components together – providers of care, payers of care, suppliers of care –fiefdoms will breakdown and begin to unify around the consumer.
2. Scalability As many healthcare upstarts are finding out, without customers it’s a long road to growth and profitability. Operating costs represent a huge drain, not to mention challenges of low brand recognition and immature market presence that goes with a small base of existing customers. Food for thought: combine CVS’ 9800 retail outlets, 1100 clinics, 94 million PBM members, 5.5 million Medicare drug plan members with Aetna’s 38 million customers (including over 2 million drug plan members)…scale can be a beautiful thing!
3. Efficiency Unsustainable administrative costs, red-tape bureaucracy, and legacy information systems will be the death knell of healthcare as we know it. Waste represents more than 20% of total healthcare expenditures in the United States. While the jury is still out on efficiency gains of consolidated health systems, mass-negotiated pharmaceutical rates, and even value or outcomes based reimbursement schemes, these are the boundaries that must be pushed.
4. Dominance Driven by both a spirit of entrepreneurship and need to achieve efficiencies and scale in order to contain costs, new market dominators or ‘titans of healthcare’ will emerge, and be formidable adversaries. At risk in this ‘healthcare oligopoly’ is competition. Think about it: 90% of Americans live within 10 miles of a Walmart…now add Humana’s almost 9 million Medicare members; 75% of Americans live within 5 miles of a Walgreens…now add lab-testing partnerships with LabCorp and Quest.
5. Consumerism Ahhh, lest we forget about the customer! There’s a reason why so many health care entities are hiring a Chief Experience Officer (CXO). Healthcare customer service sucks! At every step along the health care customer journey there’s friction, complexity and frustration. If there’s anything driving the healthcare industry to change it’s consumers. From Gen Y to Millennials to Boomers – they will not engage with healthcare the way it is now. They are demanding change: virtual health, telemedicine, retail clinics, wearables, and active aging.

Uncertainty and volatility will reign for the foreseeable future – count on it! While there may be a period where ‘deal-of-the-day’ dynamics die down, given the number and size of transactions in the current pipeline, absorption and integration will take time. Fallout from industry consolidation we’re seeing today will need 2-3 years to settle into a mature state. In the meantime, markets will be disrupted and competitors disintermediated.

Successful companies don’t sit still in transformative, disrupted markets – whether disrupted by consolidation or innovation. Even the most risk-adverse businesses must adapt. After looking internally and externally at where you stand today (i.e., level of readiness), identify what needs to be retooled to deal with shifting markets, new competitors and changing rules of the game. Then, create a series of scenarios or pro-formas to address business objectives (i.e., growth, profitability, product and services, operations) in this re-reconfigured landscape. Finally, select and prioritize specific, tangible opportunities; build the business case; design a structured, sequenced approach to achieve results; and, formulate an actionable, measurable go-to-market implementation plan…your roadmap to readiness. Then, go forth and win!

 

Your Healthcare Radar 2016

As 2016 planning and budgeting looms large, here are ten big impact trends to consider as you finalize enterprise strategy, evaluate in-market tactics and think about the future of health care.

 

1. Clinical Marketing

2. Value Based Care

3. Consolidation

4. Healthcare CX

5. Chronic Care

6. Trustability

7. Obamacare

8. Marketing

9. mHealth

10. Big Data

 

 

Medicare Marketing Strategy

Medicare Advantage (MA) is on pace to top 17 million beneficiaries this year, and another 5 million over the next 5-years. Opportunity abounds to grow in the Medicare marketplace — particularly MA. In addition to a booming age-in market and constant flow of switchers, Medicare Supplement products remain vulnerable to MA’s value proposition.

A structured approach to Medicare marketing has never been more important: well-articulated value proposition, data-based targeting, robust B2C tactics, multi-channel selling, and a beneficiary customer experience built around superior service.

In Medicare, addressing consumers’ long list of pain points is essential: economic woes, too many choices, pre-existing conditions, and complexities of Medicare (admit it, on a good day it’s a bureaucratic nightmare tied together with red tape). From a buyer’s perspective, a commoditized set of products and multiple distribution outlets translates into a tricky buy/sell marketplace.

Here are 10 keys to any Medicare marketing strategy —

1. DATA DRIVEN - Turn data into actionable intelligence using predictive models for most likely responders and defectors as well as variable direct response call-outs to optimize media for lowest cost per lead/sale.
2. DIFFERENTIATED VALUE - Preferred Medicare plans are built on trust, credibility and relevancy combined in a differentiated value proposition as well as understanding what motivate prospects to select a plan.
3. MULTI-CHANNEL SALES - Different Medicare customers require different sales channels – face-to-face to telephone to online to retail – don’t close the door on any potential customer that wants to buy from you.
4. AGE-INS - Thousands aging into Medicare every day require new approaches to attract boomer-seniors with relevant education content, sequenced messaging, and omnichannel outreach communications. 
5. DIGITAL MEDICARE - Online Medicare shopping is the norm so it’s essential to have a digital experience that’s built for seniors and user tested, from ease-of-navigation to the pictures and words on the website. 
6. MEMBER RETENTION - In a fiercely competitive Medicare market “switcher” campaigns are routine, so only superior customer service and loyalty-based engagement will optimize member retention and ultimately, LifeTime Value. 
7. COMPLIANCE - Today’s Medicare marketers must account for the important role of CMS consumer protections, making sure the link between marketing, sales and compliance is as strong as possible.
8. CUSTOMER EXPERIENCE - Create opportunities for personalized, relevant one-on-one interaction to reinforce value every time you engage and connect with a beneficiary. Make it all about them…and their Medicare!
9. STAR RATING - Marketing’s role is critical to ensure beneficiary communications reinforce satisfaction tied to every CMS measures across the customer lifecycle to achieve highest possible Star Ratings and payment bonuses.
10. MARKETING ROI - A combination of up-front data analytics, direct response discipline, flawless campaign execution and back-end measurement will lower member acquisition costs and increase customer retention.

For a more in-depth review, download: Medicare Marketing 2016

 

Digital Table Stakes

Hello everyone, Captain Obvious here…Americans have moved to a lifestyle of digital focus. High engagement socialized online media that keeps pace with today’s “always-on” perpetually connected consumer cuts across every market and every customer segment:

• 70% of American Internet users are mobile only
• 50 billion devices will be part of the Internet of Things (IoT) by 2020
• 54% consumers age 65-74 own a tablet and 55% use a smartphone
• 71% Millennials visit a social media site once a day
• 26 minutes a day are spent texting compared to 6 minutes on voice calls
• 83% customers see value in being recognized by retailers across devices

This continued shift in consumer medium means that now more than ever it’s essential for marketers to produce highly engaging content that keeps pace with the perpetually connected. This capacity is now digital table stakes.

In 2015, successful marketers must concentrate on addressing customer needs in real time with digital assets that speak to consumers in the medium they prefer. Concurrently, marketers must also incorporate robust analytics to learn from these interactions — every visit, click and call.

The rapid expansion and continued evolution of the digital landscape makes managing a marketing budget a moving target. To maintain success and stay on track, it means constantly re-evaluating every aspect of an integrated digital marketing strategy. Here’s a few guiding principles:

• Make all digital marketing dollars accountable with direct response discipline
• Enhance user experience by focusing on needs-driven customer solutions
• Validate in-market creative and messaging using a test-and-learn process
• Gain intelligence by aggressively tracking paid and organic search results
• Leverage social media so advocates share content in their online communities

Taking a “right customer, right message, right time and right channel” approach means each digital placement — paid search, SEO, microsites, landing pages, registrations and email — requires individual data-driven optimization focused on marketing ROI. Its table stakes!

Healthcare Consumerism

Power To The People

The consumerization of healthcare has the customer in control: budgeting benefits, choosing providers, and navigating care. Perpetually connected consumers are comparing prices, quality, convenience, and outcomes. And, technology innovations have become the great equalizer, making it easier and faster for consumers to access information, comparison shop, and make purchases in a healthcare marketplace.

With the rapid growth trajectory of High Deductible Health Plans, Health Savings Accounts, public/private health exchanges, and Accountable Care Organizations, a patient-centric future demands engaged, enlightened and empowered consumers. Power to the people!

This Infographic, Healthcare Consumerism, looks across the health care landscape at the forces pushing and pulling the most important stakeholders.

Trustability Wins

Smart health care companies are responding by creating communities for connection, collaboration and communication. They get it…if we ask customers to take personal responsibility for their health care decisions the onus is on the industry to help consumers make value-based individual choices.

Healthcare consumerism is not a fad. In fact it’s the “bombogenesis” for marketplace change:

• Shift of financial burden and decision-making to the individual
• Increased access to relevant healthcare information
• Acceptance of (or forced) consumer health accountability
• Technology-driven innovation facilitating personalization
• “SoMoLo healthcare” is happening (social, mobile, local)

Health care brands are now inseparable from their ability to engage and empower the customer. They need to provide customers a reason to engage by guiding them through healthcare’s maze of choices and reward them with interactions that do the right thing for their healthcare. Relevant engagement yields customer empowerment…and empowered patients have lower costs and better outcomes.

Lastly, as put forth in the recent article, 2015: Healthcare’s Year of Trustability, both payers and providers need to reestablish a “relationship of trust” with today’s consumer. This means building and maintaining a personalized dialog with each customer throughout their healthcare journey. The payoff is a superior user experience, higher satisfaction ratings, and better customer retention. They will promote you, refer you and most importantly, they will become customers for life.

First Movers

The linkage of health and technology has innovators racing toward the next best consumer engagement solution. Market leaders are leveraging Social, Mobile, Big Data, Hyper-Segmentation, Cloud and Wearables. In its report Healthcare IT: Digital Disruption is Knocking, Accenture Health forecasts funding of digital startups in the U.S. healthcare market will double over the next three years, reaching $6.5 billion. And, a leading health-tech accelerator, Rock Health reports consumer engagement and telemedicine in its Top Six Trends in Digital Health Funding.

Consumers will use healthcare innovations that make it easier and more convenient for them to:   

• Self-diagnose a condition
• Change a habit or accomplish a goal
• Stay on a course of treatment or drug
• Interact with all their health care providers
• Achieve a healthier lifestyle and better quality of life

Disruptive innovation will affect every aspect of healthcare consumerism and be guided by a simple philosophy: first movers may sometimes fail, but last movers don't survive.

 

Big Data, Small Data, Good Data

For direct-to-consumer businesses the ability to gather, store, analyze and interpret big data is now table stakes…where to put it, what to do with it and how to turn it into value. Ingesting big data, structuring information and creating actionable insights to inform strategy and drive in-market tactics is a huge differentiator in today’s intensely competitive landscape.

In the last 10-years, global Internet traffic grew from 8.6 million Gigabytes of data to 1 billion Gigabytes. We send 183 billion emails every day and search Google 4 million times every minute. We’re transmitting, exchanging and integrating big data 24/7. Now bring on the Internet of Things (IoT), connectivity of devices and systems that go beyond machine-to-machine communications and cover a vast array of protocols, domains and applications. It’s estimated that more than 30 billion devices will be wirelessly connected to the Internet of Things by 2020.

For many, big data is a big mystery. Gartner reports that 56% of companies are struggling to know how to get value from their data. The volume of data is so large it’s now measured in Zettabytes. IBM says about 80% of the information created and used by an enterprise is unstructured data. Dan Ariely Professor, Duke University sums it up best…

Big Data is like teenage sex: 

• everyone talks about it
• obody really knows how to do it
• everyone thinks everyone else is doing it
• so everyone claims they’re doing it too.

Realizing big data’s value, while wadding through the all-important maze of data security and privacy, is no easy task. Like most business disciplines it takes an enterprise data strategy and sequenced action plan.

Tackling big data is often put in the context of the “Four Vs” –

Volume – ingesting vast amounts of data generated inside and outside the organization.

Velocity – managing speed at which data is produced and flows across business functions.

Veracity – determining trustworthiness and messiness of data being handled and processed.

Variety – juggling different types of data being generated, communicated and distributed. 

Getting your act together around big data breeds a better understanding of your customer segments. It helps construct a complete snapshot or “unified view” of the customer to attract, acquire and retain the best customers for your business. It also enables sophisticated approaches to product development and customer outreach by linking data to core business strategies and in-market tactics. The ROI of business analytics solutions that incorporate data-driven predictive analytics is said to approach 250%.

Finally a practical, integrated approach to big data enhances a company’s ability to influence customer behavior. With enriched data-driven insights–core demographics, purchasing habits, lifestyle or lifestage attributes, and attitudinal indicators–you create tighter, better orchestrated customer engagement by knowing where they go, what’s important to them, who’s at risk of leaving, who they’re talking to…and what they’re saying.

An integrated big data enterprise strategy enables a cross-functional approach to engagement. It fosters a more personalized, lower-cost customer relationship that improves bottom-line performance and optimizes customer LifeTime Value.

Big Data INFOGRAPHIC

 

mHealth On A Roll

The opportunities around mHealth, both connected devices and consumer applications, are set to change healthcare delivery as we know it today. From prescription-ready online eye exams to GoogleGlass operating rooms to consumer financial decision support tools, over the next 12-24 months mobile will take us places we could never imagine just two years ago.

Personal health technology means more informed, smarter consumers who will push payers and providers toward delivering better outcomes.

Let’s put mobile in context. There are approximately 6 billion mobile phone subscribers across the world. Over 40% of U.S. household has already gotten rid of their landline. The average smartphone user checks their phone 150x every day and most have their phone with them 22 hours per day. By 2015 an estimated 1 billion consumers will use mobile payment generating about $1 trillion in transaction value.

Healthcare companies get it! They recognize that today’s always addressable consumer has a mobile mindset…an expectation that any desired information or service is available on any device at a person’s moment of need. Almost a quarter of Facebook’s 1 billion users are "mobile only", it’s almost 3x for Twitter. Mobile is rapidly growing as the most important channel throughout the customer journey. For Millennials, who send an average 88 texts per day, mobile isn’t an activity it’s a lifestyle…it’s their way of connecting.

 From a care delivery perspective mHealth is an exploding category. It includes both connected medical devices (monitors and trackers across a range of specific conditions or metrics (e.g., wellness wearables; weight loos or medication trackers; diabetes, sleep apnea or cardiac monitors) and mobile healthcare applications that perform a number of functions: inform, instruct, record, display, guide, remind, communicate. For example, over the next five years it’s expected that 13 million wearable connected devices will be integrated into wellness plans…a $6 billion industry. And. roughly 1/3 of patients use their mobile device or tablet on a daily basis for health research and/or to book appointments.

mHealth means communication between patient and provider is no longer a one-way monologue, but rather a data-driven, personalized interactive dialogue–that’s portable. Here’s an Infographic looking at the impact trends surrounding the Mobile Mindset.

Fast Start: 2014 Trending Up

“If things seem under control, you’re just not going fast enough.” -M. Andretti

Polar vortex, Putinpalooza, Facebook’s $19 Billion acquisition of a mobile messaging company with 55 employees, and the World Wide Web had its 25^th birthday…KABOOM…2014 is off to a fast start.

In healthcare, Obamacare enrollment is set to surpass 5 million, Accountable Care Organizations continue to see unprecedented growth, Medicare is being squeezed, and technological innovation is changing care delivery from patient engagement to wearable wellness monitors to mind-controlled exoskeletons. 

On the marketing front, vast shifts in consumer expectations for how, when and where they receive information are turning communication and sales channels upside-down. At the same time socialnomics continues to extend its reach connecting consumer communities through broad-based sharing and two-way conversations. 

Following are the hottest developments and most important trends to watch inmarketing and healthcare as 2014 trends upward with fast-paced action and unforeseen market surprises. 

 

Marketing Trends

• B2B–B2C Integrated data, marketing automation, personalized customer relationships, and CMO–CIO bonding are common themes - http://goo.gl/eWqWFE & http://goo.gl/zv621h 

• CMO With digital marketing budgets doubling in next 5-years what else do top CMOs see down the road and why is their job security looking up - http://goo.gl/oMAl8w & http://goo.gl/PGr54o

• CX In the age of the customer marketers need to stop talking about customer focus & start delivering customized, omni-channel interactions - http://goo.gl/HQnpF6&http://goo.gl/f8cDNT

• GENERATIONS Let the battle begin as 76 million Millennials and 43 million Seniors go digital, get social and flex their online muscle - http://bit.ly/1ggnbyA & http://goo.gl/CZ9leL

• SOCIAL As companies leverage social media to establish connection communities, the future is all about keeping an eye on customer SLTV (Social LifeTime Value) - http://goo.gl/eaoBRB

 

Healthcare Trends

• ACA As Obamacare moves forward with implementing Marketplaces, ACOs and Medicaid expansion, here’s a State of the States - http://goo.gl/bST5In & http://goo.gl/8TUoYZ

• HEALTHCARE A watchlist for 2014: Obamacare 2.0, paying for quality, big data, wellness wearables, SoMo health, and customer loyalty - http://bit.ly/1gIlD1Y

• INNOVATION For a web company to reach a million users a great app is great, but backend infrastructure is key; for next-gen healthcare just be amazed - http://goo.gl/9wDqel & http://goo.gl/x89GU0  

• mHEALTH Early wisdom says make it about life not illness, make it personal & reinforce social connections - http://goo.gl/XO57ek& http://goo.gl/5PwnMC   

• PROVIDERS Variations in quality, particularly around “narrow networks”, combined with primary care shortages, are challenging the delivery system- http://bit.ly/1kitBQN & http://goo.gl/Lb6Sj0

 

SPECIAL  OFFER

Sign-up here for KBM Group: Health Services’ free Webinar Obamacare 2.0: Roadmap for 2015

 

Brand Direct: A Marriage Made in Marketing

 

Marketing has changed forever. Competitive rivalry is intense and corporate America is feeling the pressure. Companies are rethinking the balance between localization/globalization, product focus/customer focus, online/offline and growth/profitability.

At the same time, consumer impatience is at an all time high as they are attacked from every angle. Stop, look, listen, even smell – marketers are everywhere and hitting hard. Unfortunately, too much “throw it up against the wall” marketing has created disenfranchised, disengaged customers rapidly becoming savvy cynics.

Brand and direct response marketing have long been cornerstones of successful advertising. On their own, each contributes an important piece of the marketing puzzle.  Brand is every aspect of the relationship a company has with its customers. A strong brand is a long-term asset that drives mind share and influences decisions to try, repeat and remain loyal to a product or service. Direct response is a data-driven discipline that encourages immediate consumer interaction through a creative call to action. It gets personal, generates leads and produces sales. Both are intimately tied to growth and margin.

More and more the line between these two disciplines is blurred. Marketing no longer depends on traditional silos such as branding, direct response, advertising and communications. The pace of change – technological advances, demographic values, regulatory oversight and product commodization – demands an integrated approach that achieves integrated goals.

Brand direct is a way of combining brand messaging with the tools and techniques of direct response. It means opening up a dialogue with consumers and carefully tracking the conversation. The result is consistent, branded communications that encourage interaction from prospects and ultimately increases sales and creates a better customer experience. Here, the tools and techniques of direct response marketing (data-driven, measurable consumer outreach) converge with brand advertising (unique point of distinction that commands preference and shifts demand). 

 

 

6 Success Factors of a Brand Direct Approach

Forward thinking marketers recognize the importance of a brand direct approach. To get there, it takes an understanding of six critical success factors:

1. Break down traditional marketing “ownership” silos
2. Negotiate an integrated approach (budgets, priorities, responsibilities)
3. Leverage data and analytics to support a combined effort
4. Include all aspects of online, offline and social platforms
5. Adjust the brand creative process to reflect different needs
6. Extend across entire customer lifecycle from acquisition to retention

Direct response can continue to stand alone to generate leads and, brand advertising can continue down a path of building awareness. However, marry the two and the result turns more prospects into customers by having a productive, one-on-one relationship with consumers across the customer lifecycle.

 

For more information see TOP 10 HEALTHCARE TRENDS: 2014 

 

Top 10 Healthcare Trends: 2014

Impact Trends. Impact Solutions.

Putting a lens on future trends is an important first step in bringing strategy to life.  Now what? Making information actionable is critical for success. Here are 10 trends each with an idea to guide next steps.

1. Obamacare 2.0 Track and analyze key take-aways from early ACA enrollment experience (internally and competitors) to make in-market adjustments over the next 6-12 months.

2. Risky Capacity Risk management and capacity challenges going forward require an integrated data strategy that crosses organizational fiefdoms and forces information to be used to define Key Performance Indicators. 

3. Quality Matters Measurable clinical outcomes mean establishing tight controls around payer/provider integration, product mix, business processes, corporate governance, and clinical standards.

4. Chronic America Patient-centered chronic care management is the key to successfully “bend the cost curve”. It takes oversight and education to help patients understand their condition and improve quality of life.

5. Behaving Healthy Effectively influencing healthcare consumer behaviors and attitudes takes a “medical marketing” approach that combines principles of direct response and evidence-based bedside manner.

6. Good Data Good data needs customization based on markets served, product portfolio, existing technology platforms, and most of all it’s about actionability–turning data into insights and insights into results.

7. Retailization Engage retail consumers with three tactics: deepen relationships with existing customers, expand your base through measurable marketing, and bolster communication to augment sales and enhance loyalty.

8. Mobile Health As your customers demand instant access, follow mobile’s three “Rs”–relevance, reliability and relationship: compelling content, user friendly navigation, and tools that facilitate a customer conversation.

9. Socialnomics Measure your company’s social engagement by monitoring real-time information about a brand’s social reach (how many express interest) and engagement (degree of involvement and interaction).

10. Customer Centricity Improve customer LifeTime Value and achieve a superior user experience by understanding internal cross-functional touchpoints and take an outside view of their path to purchase.

We’ll see fast-paced action in 2014 so keep a close watch on the trends impacting your business and take a proactive approach to managing change with actionable solutions. Welcome to 2014!

Here’s a complete copy of TOP 10 HEALTHCARE TRENDS: 2014