"It's the economy stupid", to quote a now famous phrase.
Revenue in hospitals, clinics and physician offices are down. Looming Medicare cuts. Slow pay or no pay from Medicaid programs across the country. Increased self-pays. Lowered insurance reimbursements.
As much as we like to believe otherwise, healthcare is not a discretionary purchase. And, there is little if any differentiation between medical providers. With so many individuals out of work, consumer confidence eroding and wage earners fearful of losing jobs, healthcare, whether doctors visits, medication purchases, or hospitalizations, are the last thing on peoples' minds.
What is a healthcare provider to do?
We all know the drill. Cut costs, lay-off staff, hiring freeze, decrease marketing. etc. All retrenchment strategies to "weather the storm." In most cases necessary steps. All fatal to the healthcare organization. When recovery ensues, which it will, you can't take advantage of new opportunities that present themselves because you are trying to recapture what you lost. Focusing your resources and efforts to make back the revenue and market share that you lost.
You can drive volume and revenue is a recessionary or slow growth economy. Here's how:
Step One: Recognize that healthcare is a purely a discretionary purchase. No one wants to get sick. No one plans to get sick. No one thinks about what health provider they will go to when they get sick.
In recessionary or slow growth economy here is the paradigm: ( I am not saying its right to do, but it is what people do.)
I get sick » self diagnose and try over the counter medications » doesn't work » consider retail clinic yes/no » call primary care physician yes/no » go to hospital ER.
Hospitals are last on the list, and individuals decisions in the economy are driven purely by price. What is going to cost me in co-pay or out of pocket if no insurance and what is the cheapest price?
Realize too that there is little if any differentiation among providers. You all look and feel the same. Market and "walk the talk" about value and price, not about image.
Step Two: Focus on physician and patient experience. Understand every touch point that a doctor or patient comes in contact with you from the first moment that they learn about your brand, to the medical services, to leaving is an opportunity to create a lasting positive impression and repeat business. Complete a patient experience map and a physician experience map. Find the issues and fix them now.
Step Three: Focus on the core. That's right, focus on your core services that pay the bills. No wild fancy flights of new services that are consumer or physician discretionary or elective in nature. People won't buy them in this economy. So don't waste the time and energy, except for planning for those new service lines when the economy turns around. But not now.
Create pricing and service specials for your existing outpatient lab services such as schedule, test and results in two days (STaR2).
Step Four: Crank up the media relations. Press releases, statements, white papers, outcomes studies, anything that puts you in a positive light and keep you in the media. Consider a steady stream of health and wellness tips etc. Drive people to your web site and don't forget to use social media efficiently and effectively. Patient and physician success stories are needed as well.
Step Five: Constantly measure and evaluate. Change on the fly. Don't stop. Be consistent in your brand messaging.
The opportunity is now.
Michael Krivich is Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association and can be reached at michael@themichaeljgroup.com or 815-293-1471 for consulting services in strategic marketing, media relations and interim marketing executive leadership assignments. Huthwaite SPIN selling trained and a Miller Heiman Strategic Selling alumni, both highly respected and successful international sales training organizations , I can lead your organization though the challenge of integrating sales and marketing.
Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
Thursday, September 2, 2010
Sunday, March 2, 2008
Accountability, Responsibility and Change
$1.5 Trillion and Counting
A couple of weeks ago, Health Affairs reported that healthcare spending increased by $750 billion to $1.5 trillion. It was also predicted that by 2017 healthcare spending would increase to $4 trillion. Okay, can anybody without giggling too hard really admit that they can comprehend and understand exactly what $4 trillion means? Monopoly money... it has no meaning except for those that can figure out how to be part of that spending. Hospitals, health systems, medical device manufacturers, pharma, physicians, associations etc., all looking at what piece of the pie is theirs. The economist's know what that means. So what else are we to spend our money on?
Well, that kind of spending is unsustainable and will force concrete action to fix a broken healthcare system. Just what that will look like is any ones guess at this time. Don't fix it and we will have rationing, long waits and a national healthcare system where no one is cared for. And a dollar that so far south of the Euro that it will never come back. Government has enough trouble running Medicare and Medicaid now, what in good gosh almighty makes anyone think they can run a national healthcare system.
A bet and forecast for my money..... Like Chicago politics, once everyone figures out how they get theirs, healthcare reform will happen. Everybody wins except for the consumer......
Medicare Rates Are Cut!
Scream the headlines and the hospital administrators, national leaders decry the action. OK, what does it really mean. First, Medicare is not being cut. Second, it is still growing. Third,what was cut was the rate at which Medicare is growing. And fourth, it is just not the rate healthcare people want. How about instead of crying for what we don't have find ways to be more efficient and productive, reduce medical errors, promote standards of care and become more self sufficient and less whinny.
Having been outside of the hospital part of the healthcare industry now for a couple of years and reading and watching, I never realized how whinny hospital execs are. We are expecting someone else to fix our problems. Maybe its time as healthcare executives we stepped up to plate, reached consensus on a strategy and drove some real national policy agenda and change. Instead we are reactive and acting surprised when someone steps with a solution on issues that we should be leading and then we react with the why it will not work, not the why it will. Oh wait, if we did that we couldn't complain much anymore. No wonder no one takes the healthcare industry seriously. I am sure this really endures me to the industry.
IT Anyone?
Expensive... needed.... and the right thing to do. EMR, e-prescribng, RHOIs (which may be dead anyway) and a whole host of issues besides the technical ones. Seems to me to be the cost of doing business. We all agree that government wants IT, doctors and hospitals want IT, employers want IT from providers and national healthcare leadership want IT and the AHA wants government to pay for IT. Sorry, there I go again not being part of the solution but adding to the let someone else pay for what I need to do for my organization from a cost of doing business perspective.
My simple question is, so why is the government expected to provide the cash to hospitals, health systems and others to move to computerization? Money for IT might just be available if every hospital in the US didn't have to provide every service, piece of new technology, improved efficiency and productivity, reduced medical errors and improved customer satisfaction.
A couple of weeks ago, Health Affairs reported that healthcare spending increased by $750 billion to $1.5 trillion. It was also predicted that by 2017 healthcare spending would increase to $4 trillion. Okay, can anybody without giggling too hard really admit that they can comprehend and understand exactly what $4 trillion means? Monopoly money... it has no meaning except for those that can figure out how to be part of that spending. Hospitals, health systems, medical device manufacturers, pharma, physicians, associations etc., all looking at what piece of the pie is theirs. The economist's know what that means. So what else are we to spend our money on?
Well, that kind of spending is unsustainable and will force concrete action to fix a broken healthcare system. Just what that will look like is any ones guess at this time. Don't fix it and we will have rationing, long waits and a national healthcare system where no one is cared for. And a dollar that so far south of the Euro that it will never come back. Government has enough trouble running Medicare and Medicaid now, what in good gosh almighty makes anyone think they can run a national healthcare system.
A bet and forecast for my money..... Like Chicago politics, once everyone figures out how they get theirs, healthcare reform will happen. Everybody wins except for the consumer......
Medicare Rates Are Cut!
Scream the headlines and the hospital administrators, national leaders decry the action. OK, what does it really mean. First, Medicare is not being cut. Second, it is still growing. Third,what was cut was the rate at which Medicare is growing. And fourth, it is just not the rate healthcare people want. How about instead of crying for what we don't have find ways to be more efficient and productive, reduce medical errors, promote standards of care and become more self sufficient and less whinny.
Having been outside of the hospital part of the healthcare industry now for a couple of years and reading and watching, I never realized how whinny hospital execs are. We are expecting someone else to fix our problems. Maybe its time as healthcare executives we stepped up to plate, reached consensus on a strategy and drove some real national policy agenda and change. Instead we are reactive and acting surprised when someone steps with a solution on issues that we should be leading and then we react with the why it will not work, not the why it will. Oh wait, if we did that we couldn't complain much anymore. No wonder no one takes the healthcare industry seriously. I am sure this really endures me to the industry.
IT Anyone?
Expensive... needed.... and the right thing to do. EMR, e-prescribng, RHOIs (which may be dead anyway) and a whole host of issues besides the technical ones. Seems to me to be the cost of doing business. We all agree that government wants IT, doctors and hospitals want IT, employers want IT from providers and national healthcare leadership want IT and the AHA wants government to pay for IT. Sorry, there I go again not being part of the solution but adding to the let someone else pay for what I need to do for my organization from a cost of doing business perspective.
My simple question is, so why is the government expected to provide the cash to hospitals, health systems and others to move to computerization? Money for IT might just be available if every hospital in the US didn't have to provide every service, piece of new technology, improved efficiency and productivity, reduced medical errors and improved customer satisfaction.
In the end....
These are not simple problems and do not have simple answers. I have made light and poked fun, and I am sure irritated a bunch of people along the way. But at the end of the day, unless we can come together, use a little common sense and ask what is right for all instead of what's in it for me, we could solve these problems. Maybe that's what Senator Obama has figured out, the American people have figured out and we are just waiting for everybody else to catch up.
Sunday, January 20, 2008
The more things change, the more they stay the same
Economy
With the economy nearing recession it is a safe bet all the talk about healthcare reform and national health insurance will slow down. People want jobs and economic security. That debate is beginning to overshadow everything. Politicians are like a 3 year old child's short attention span and they focus on the flavor of the day. Until someone comes up with that private government combo plan for reform, its dead in the water. Look for incremental change that tinkers around the edges but fails to address underlying systemic issue. If real change is going to come it will have to come from employers large and small. As the old saying goes....Money talks and ........, well you know the rest.
Hospital margins
We all know that hospital margins for the most part have been showing signs of improvement the last couple of years. With the growth in spending in Medicare and Medicaid, and CMS realizing its out of control faster than they even thought, reductions are in the works. That will pace more pressure on margins. Also, hospitals have done very well thank you very much, in the past few years with their investment strategies which has supported margin growth. With the current state of the financial markets, some will take a financial bath. Look for losses especially with the stand-alones going forward. Higher interest rates for bond issues as well because of the sub-prime market meltdown, lower margins etc. As layoffs become more prevalent in the general job market more uninsured will be seeking care further increasing bad debt and adding to margin compression. Oh wait, my bad, bad debt is really community benefit as they like to say.
Mergers and Acquisitions
One would predict that merger activity will increase this year and for the foreseeable future with the economy the way it is becoming. The Justice Department will be looking very closely at these transactions. I have yet to see one where healthcare costs were reduced, duplicate services eliminated and big time leverage was gained for increased reimbursement from payers. Doesn't mean that it doesn't happen, I just haven't seen it.
Error rates
Nearly 100,000 people die every year from preventable medical errors. That's like crashing a fully loaded 747-400 every 1.5 days. Now we all know its unacceptable so why do we continue to allow that that in healthcare? Some payers and the government are going to stop paying for never events. A good start in the right direction. The jury is still out on whether or not P4P programs work. Mess with the medical communities money and you will see how fast the error rate and deaths associated with it goes down. Cynical yes, but true never-the-less.
Have a good week everyone and thanks for reading. Have some news or ideas just send them to themichalejgroup@aol.com All will be treated confidently and anonymity assured.
With the economy nearing recession it is a safe bet all the talk about healthcare reform and national health insurance will slow down. People want jobs and economic security. That debate is beginning to overshadow everything. Politicians are like a 3 year old child's short attention span and they focus on the flavor of the day. Until someone comes up with that private government combo plan for reform, its dead in the water. Look for incremental change that tinkers around the edges but fails to address underlying systemic issue. If real change is going to come it will have to come from employers large and small. As the old saying goes....Money talks and ........, well you know the rest.
Hospital margins
We all know that hospital margins for the most part have been showing signs of improvement the last couple of years. With the growth in spending in Medicare and Medicaid, and CMS realizing its out of control faster than they even thought, reductions are in the works. That will pace more pressure on margins. Also, hospitals have done very well thank you very much, in the past few years with their investment strategies which has supported margin growth. With the current state of the financial markets, some will take a financial bath. Look for losses especially with the stand-alones going forward. Higher interest rates for bond issues as well because of the sub-prime market meltdown, lower margins etc. As layoffs become more prevalent in the general job market more uninsured will be seeking care further increasing bad debt and adding to margin compression. Oh wait, my bad, bad debt is really community benefit as they like to say.
Mergers and Acquisitions
One would predict that merger activity will increase this year and for the foreseeable future with the economy the way it is becoming. The Justice Department will be looking very closely at these transactions. I have yet to see one where healthcare costs were reduced, duplicate services eliminated and big time leverage was gained for increased reimbursement from payers. Doesn't mean that it doesn't happen, I just haven't seen it.
Error rates
Nearly 100,000 people die every year from preventable medical errors. That's like crashing a fully loaded 747-400 every 1.5 days. Now we all know its unacceptable so why do we continue to allow that that in healthcare? Some payers and the government are going to stop paying for never events. A good start in the right direction. The jury is still out on whether or not P4P programs work. Mess with the medical communities money and you will see how fast the error rate and deaths associated with it goes down. Cynical yes, but true never-the-less.
Have a good week everyone and thanks for reading. Have some news or ideas just send them to themichalejgroup@aol.com All will be treated confidently and anonymity assured.
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