The following is Part IV of a detailed five-part series focused on the drivers behind the branding transformations taking place in the healthcare service providers market.
Author of this series, Todd Lunsford, served as chief marketing officer and held substantial roles in strategy and change management for Envision Healthcare, and its predecessor AMSURG, for over thirteen years.
In the first three parts of this series, Todd covered transformational market forces ranging from the accelerating consolidation of the healthcare services provider market driven by private equity M&A investments, the long-term shift away from pricing and compensation based on procedure volume toward a value-based system, and the looming physician supply shortage. Please read Parts I, II and III now!
In Part IV, Todd examines the increasing transparency and brand differentiation through patient experience.
For the purposes of this discussion, I will use the term “transparency” to refer to the ability of consumers to compare healthcare services options across three specific dimensions:
- Price—the out-of-pocket outlay specific to an individual
- Quality—the efficacy of treatment and clinical outcomes
- Experience—all non-clinical aspects of the care process (physical comfort, staff friendliness, etc.)
Historically, all three of these have presented a big challenge for consumers. Out-of-pocket pricing is virtually impossible without time-consuming phone calls, clinical quality data is difficult to understand and access, and word-of-mouth has been the only channel to learn about good or bad patient experiences.
This article from Modern Healthcare provides a good overview of the progress and issues related to delivering true price transparency to the marketplace.
For the most part, consumers remain in the dark about what they will be asked to pay…..in that way healthcare is unlike every other aspect of the consumer experience in America.
Shelby Livingston from “Is the price right? Solving healthcare’s transparency problem”
Still, just as with the evolution toward value-based compensation (discussed in Part II), progress is being made, albeit slowly. A quick survey of the landscape reveals a movement that is gaining momentum:
- State-level reforms require more price disclosure from providers, plus the creation of databases.
- Insurers introduce or upgrade cost comparison tools and ensure that their audiences are aware of them.
- Massive amounts of venture capital flow into healthcare transparency-focused companies.
- Evidence of price shopping generates savings in some service categories, such as imaging.
Surveys show that consumers want the ability to compare prices. Most people are increasingly concerned about being surprised by medical bills, even if only a small percentage of them are actively accessing the research tools available to them.
As discussed in Part II, healthcare is unique in that consumers can’t effectively make cost-quality tradeoffs by choosing to pay more for a higher quality service if they wish. There is nothing wrong with price variation if it reflects different levels of quality, but research attempts to find a quantitative link between price and quality in healthcare have failed. And yet, the price differentials within local markets for the same service can be very large.
Furthermore, the very definition of quality remains a topic of intense debate across all medical specialties. Consensus remains a long way off. (An in-depth discussion of these issues is beyond the scope of this article, but a recent NEJM Catalyst report provides a nice summary.) One common theme is that there is a disconnect between the way physicians and provider organizations think about quality and the way their patients do:
“Most clinicians define quality care as being effective and safe…patients however, assume their care will be safe and effective…and don’t understand healthcare quality measures, [so] they use substitutes such as friendly staff, convenience, access and trust.”
Tom Miller, MD from NEJM Catalyst
In other words, patients value their whole healthcare experience just as they would in any other service purchasing situation. And while the system grinds forward in its slow evolution toward more price and clinical quality transparency, the tools available for consumers to rate the quality of the “softer” aspects of their experiences are expanding and, increasingly, being used.
When I first took over marketing at AMSURG Corp, we conducted focus groups so we could get a handle on how consumers felt about their experiences, specifically regarding colonoscopies. We examined everything from provider and facility selection all the way through to billing. Their testimony underscored the degree to which patients were willing to put up with sub-par experiences that would be intolerable in any other service setting. One respondent described waiting for a procedure on a wooden bench in a crowded hallway, surrounded by busy nurses and doctors, wearing one of those open-backed surgery gowns—and the amazing thing was that it didn’t faze her. When pressed on whether it adversely affected her opinion of the doctor or the hospital involved, she said that she really hadn’t expected a pleasant experience anyway.
Fast forward 12 years and the world has changed dramatically.
Consumers may not be ready to comparison shop for healthcare exactly like they do for other services yet, but they can easily share experience ratings. The non-clinical aspects of their experiences resonate in a powerful way and are being amplified by online review sites and social media. The ten most popular rating and review sites range from specialized healthcare sources (WebMD and Healthgrades) to more general (Yelp and Facebook).
Recent data makes it very clear that consumers now use review sites as critical components of their healthcare decision-making:
- 94% say they access these sites to evaluate physicians (compared to only 25% in 2013).
- 72% say review sites are their first step when looking for new doctors.
- 48% would go out of their insurance network and pay more for a provider with favorable reviews.
These days, active online reputation management is an absolute minimum requirement for any practice or provider organization that wants to stay in business. Consistency and innovation in delivering quality experiences will have to be part of the strategy for those who targeting growth.
Part of improving patient experience is about operational excellence and getting the basics consistently right – fundamentals such as minimizing wait times, providing comfortable surroundings, contacting patients ahead of time with cost estimates, and training staff to anticipate needs.
True innovation on patient experience also requires questioning fundamental processes, such as the need for in-person consultations and the delivery of multiple bills for a single treatment incidence. As the “experience bar” is raised, more innovation will be required of successful providers.
The Takeaway for Brand Strategy
The measured progress that’s being made on transparency, coupled with the spotlight now shining on overall patient experience, offers providers enormous opportunities to differentiate themselves. It also provides them with new channels to make their differentiation story visible in ways that didn’t exist even five years ago. For those organizations that can innovate and execute consistently on the operational aspects of patient experience, there will be a natural drive to make it a source of competitive advantage through more aggressive branding.
Along with the march of industry consolidation, it will also entice more firms to pursue the creation of national consumer-facing retail brands. But we’ll explore that aspect in the final installment next week, Part V: The Rise of National Retail Branding. In it, I’ll examine examples of creative companies attempting to capitalize on all of the forces covered in this series by competing with differentiated experience and national retail branding at the center of their growth strategies.
If this article struck a chord, it may be time for a branding Health Check from a third-party expert. At TopRight, we have partner-level resources who know healthcare, both from a marketing and clinical leadership (MD) perspective. So, let’s have a conversation. Otherwise, feel free to connect with me on LinkedIn, follow TopRight CEO Dave Sutton @toprightpartner, or if you want to go deep on transformative branding, grab a copy of Dave’s new book, Marketing, Interrupted.