The thunderous and rapid delivery of merger and acquisition headlines this past year—with Walmart and Humana most recently—leave big questions unanswered for health care marketers.
Are we headed to all national health brands? Are local or regional hospitals and health systems the next institutions to crumble under the innovative weight of Silicon Valley or convenience of on-the-right-corner national brands? Are health systems, feverishly resetting the most broken bones of any industry, going to magically grow another limb? How about a question from the Eeyore in our midst—are health systems heading toward the same fate as big box retailers—and health care marketers are just promoting a first-class ticket on the Titanic?
Rationally, we know that in the foreseeable future Amazon isn’t planning to take up neurosurgery and Walmart isn’t going to install a Level I Trauma Center. But their threat is real in today’s slim-margin and highly consumer-driven reality. And we would be exceedingly wise to not hide behind the shield of health care’s unmatched complexity and legislative dependence to protect us from the lessons of big fails in other industries.
So let’s take a moment to reflect on recent headlines, and allow our strategic mind to shift from the competition across the street to the emerging competitor in our pocket or on our countertop or credenza—where the answers to many of life’s questions and friction points seem to effortlessly disappear with a sound, touch or a swipe—and for an amount of money that the consumer forgets about more easily than their hospital bill.
Let’s start with observations, and conclude with three actions health care marketers can take right here and now.
Health care seems like the 21st Century’s Gold Rush, except California and venture capital prospectors are heading for the hills of health systems.
Recently, I was interviewing a health system finance VP in the southeast, for a client engaged in our firm’s Stand Up Branding process. I inquired about his voicemail message which clearly communicated he did not have any need for any more vendors. He receives more calls, emails and mailings every day than ever before. And in his consulting work, venture capital groups have been a-knocking for advice before investing in health care solutions. With an incredulous tone he rhetorically asked: Why do they think the money is here? Where do they think all this money is coming from?
The 3.5 trillion reasons projected for 2018 and nearly 20% of our GDP have captured the collective entrepreneurial imagination—intrigued by a broken health care system that commands fixers. As tech start-ups in the garages of yesteryear were incubators for today’s billionaires, so are the waiting rooms of health care for today’s venture capitalists. In the first half of 2017 alone, 188 U.S. digital health start-ups attracted $3.5 billion in investments. But let’s talk about the trillion dollar number again.
Why $3.5 trillion should be threatened by 44 cents.
Let’s look at how consumers are changing their habits. While the majority of sales still occur in bricks-and-mortar stores, (wait for it…) we’re in the midst of a seismic shift to online retail and it’s not (yet) the Walmart greeter waving at more sales, it’s Amazon. A staggering 44 cents out of every dollar spent online is spent at Amazon—compared to Apple and Walmart each capturing less than 4 cents for every online dollar.
As these cash-flush competitors on which consumers already depend expand in the $3.5 trillion health care market and pursue partnerships, they are tipping the table to a nice slope for consumer choice to roll to their side for more health care services outside any critically-ill needs.
The movement of care away from the hospital or health system and the shift of consumer behavior to online transactions, is a parallel narrative recently lived by big box retailers. They were operating big-scale community mall anchors with small margins. Sales were shifting online and they were slow to adapt and busy operating their complex infrastructure—and as we all know, they fell, hard. Revenue losses for an already low margin business created screaming risk that their venture capital partners couldn’t take.
Resistance isn’t futile, it’s just a hassle.
Online shopping had a slower start as a retail threat because of personal data security concerns, among many other reasons. Today, while consumers are extremely concerned about online privacy and data security, they are willing to exchange privacy for convenience and certainty in fast resolutions to their chronic pain points. “The pattern is clear. Surveillance angst may make headlines, but users will choose their favorite websites and services over privacy almost every time,” according to a Money Magazine story on a global online commerce poll.
Tech brands and retailers are already acquiring incredible amounts of personal data, and consumers are raising their hands instead of shutting their wallets. (Several years ago Microsoft’s anti-Google campaign “Scroogled” attempted to expose the data privacy and other concerns to convince consumers to switch from Google to Microsoft. Both brands are growing just fine.)
Resistance is giving way to convenience and confident resolutions—and so the importance of trusted providers and health care systems upping their value game is clear.
Here are three keys to thriving with optimism and a determination steeled by healthy fear. I’ll further expand on these in the near future.
1.) As health care marketing leaders, let’s lead a virtuous innovation cycle for consumers. A checklist to start:
- Master the science and art of human understanding. Ensure the team is leveraging all consumer listening tools and gathering the health system and marketing data. And then give face to your Big Data; share it for rapid learning across the system.
- Cultivate and promote the free exchange of ideas.
- Pilot, learn, and then scale. Don’t let the fee-for-service model handcuff innovation.
- Forge more cross-functional collaboration.
- Personalize experiences.
- Provide price transparency and choice.
- Share quality reviews.
- Open up to external expertise and partner with organizations who live and breathe for better (ahem, hint, hint, wink, wink, nudge, nudge).
2.) Future-proof with deep insight and unabashed empathy, not gold fever.
Help your colleagues frame their work by what’s impacting people. Humans, not numbers. Here are a few observations to center ourselves and focus on consumer attitudes, values and behaviors in the health care space:
Always On: Consumers live with hyper-change as the metronome of their lives. They choose convenience in on-demand services and information, and they exit when expectations are not met. Brands need to deliver on a convenient experience, or consumers will go elsewhere. Period.
Currency of Health: Consumers are the emerging health care payers who have a vested interest in rising health care costs. They question health care spending and may defer care. They are increasingly willing to spend a portion of disposable income on wellness and preventive care services, products and non-pharma solutions that hit the target of unmet need without the wait.
An Insider View: When they need services, consumers seek an insider’s view into health care. System employees are often sought after as critical, credible informants in the consumer decision-making process.
Human Connection: In a tech-dominant life, consumers crave human connection and they tend to value relationships, purpose and meaningful experiences over material possessions. From their brands, they expect personalization and emotional intelligence in meeting a real human need. They are nobody’s fool as they question the tech-enabled artifice of people and brands. They will block out self-serving brands.
Digital Health: But they do want easier, more convenient care access points for living a healthy life.
Snip-Short Attention Spans: The bombardment of information and life’s demands drives the need to engage across the communications ecosystem in order to catch more attention fragments.
3.) Relentlessly remind leaders that consumers are not captive, and we need to create experiences that captivate.
Unless there is continuous improvement of the customer experience, they will go elsewhere. They have the power to choose, and set their own terms. They want anticipatory experiences, quick adapters to their needs and a highly personalized experience.
In conclusion, keep up the good fight for your customers, and help your colleagues see them in full view. Beware of insularity that ignores or dismisses the innovative wooing from Silicon Valley and other compelling consumer options.
Interested to learn more about how to be an effective health care marketer? Here are 7 habits of highly effective health care marketers. Connect with us below to share your thoughts on this article and more.