In a previous blog, “Does Cost Matter to Healthcare Consumers”, we cited the lack of correlation between access to healthcare price information and spending less on medical procedures. The reasons for this revealed that much work remains in changing the culture of healthcare cost transparency and how consumers can best use this data to make better, more informed decisions.
Some people are inclined to pay a higher price because they believe this means higher quality. Others will not, choosing to save money by being to be largely influenced by price alone. And still others will fall in between based on the procedure needed, their value system and their financial status.
The fact is, spending is not necessarily highly correlated with quality. One of the key reasons for this is that prices for the same service vary so much across healthcare institutions. Medicare payments are adjusted based on a variety of factors, including geography, medical education costs (e.g., teaching hospitals) and the cost of caring for low-income patients. In the case of private insurer reimbursements, variation is due largely to negotiations with providers. Notice that the term “quality of care” is noticeably absent from the factors affecting price listed here.
So how do we treat price when marketing healthcare services?
The same way all other marketers do when they are avoiding the pitfall of competing on price … promote value. Focusing on providing consumer-driven healthcare is key to a positive consumer experience. When healthcare consumers recognize positive experience and outcomes (quality), these factors can become more important than healthcare costs.
Value is defined by this intersection of price, experience and outcomes, and it has the potential to make an everlasting imprint on your brand identity in the eye of the healthcare consumer. But to provide value requires delivering consistent experiences and ensuring customer satisfaction.
With the healthcare industry headed more and more toward a consumer-centric (bordering on retail) model, the same consumer behavior we have seen in markets for other products and services will continue to emerge. Therefore, deciding where you fit into this positioning model and how you will communicate this positioning is not an option. It has become imperative in your marketing strategy—your brand will be defined by it.
So how do you approach this process?
- All senior management needs to become aware of this brand positioning paradigm and prioritize it as a major issue facing healthcare organizations.
- Market research should be undertaken to understand the local healthcare consumer market, the value system in place and the decision-making process. This task is too important and impactful to be based on opinion and guesswork.
- A roadmap must be designed to guide how each of these three key brand elements – quality, experience and price – will be communicated, both individually and as a whole.
No approach to any of this will be perfect. For example, the quality message is currently communicated in a variety of often-confusing ways. Click here for our Quality Measure blog. Defining quality based on an award is a common practice, but the impact can be diluted when there is no context around the award.
Deal with this and other similar interpretations in the same committed manner you approach any other challenging topic or project, with the goal of improving the customer experience. Devise a communications plan that a collaborative group agrees is best and further challenge it for any holes that may be potentially problematic. Then run with it, invest in it and be consistent. Like any brand communications campaign, success will be a function of personal investment, time and funding.
Without this plan to effectively communicate quality and experience, you can be sure that health care costs and out-of-pocket expense will become the market equalizer.
Your pricing and outcomes information is generally available now. And word-of-mouth is already playing a major role along with published measures in your patient experience reputation. Quality is communicated in a variety of random ways. If you haven’t already, it is now time to step up with a strategy to lead public perception with a messaging plan that helps consumers make sense of all of this and differentiates you in terms of your own excellent brand dimensions.
Don’t wait until it’s too late. If you do, you’ll be chasing your competitors.