Dump a bucket of super balls off a first floor balcony and with the ensuing chaos you have just replicated the US healthcare market. Today, virtually all aspects of our healthcare systems are facing dynamic change. The disruption to what was once business as usual is impacting everything from delivery of care to commercial strategy and management.
One of the broadest reaching developments has been the emergence of the patient as a consumer. Historically patients have played a passive role within the decision making process. From selecting coverage through to the delivery of care, patients were recipients and at best influencers but were not the buyers. Employers decided on the insurance plan to offer and physicians directed the patient’s healthcare. This paradigm existed because the patient had a limited financial stake in regards to the decisions that where being made.
Even as this has been changing for some time it has accelerated over the last five to ten years driven largely by cost shifting. Over the past decade the individual’s contribution has more than doubled as the employee’s portion of the cost has increased 134% . Between increases in premiums, deductibles and out of pocket expenses, the patient’s decision making process has moved from low involvement to high involvement.
Change Requires Change
As the landscape shifts, organizations are forced to adjust their approach to business. Simply put, business as usual is no longer sufficient as providers must fight to define and defend their position within the market. With the patient as a consumer stakeholders are looking to DTC promotion more and more in an attempt to inform and influence patients.
While this is common practice for pharma who consistently spend north of $4 billion per year on DTC, healthcare providers are now also becoming active in the space. According to Kantar, hospitals, clinics and medical centers combined to spend $2.3 billion on DTC in 2014 which includes a 55% increase in TV spending by Hospitals alone between 2011 and 2014.
As provider organizations launch into the DTC space it is important to build upon the learning and experience of organizations that have come before them. In the healthcare industry this would be pharma who have been engaging in consumer promotion for nearly twenty years. And like providers, pharma has faced many of the same obstacles and restrictions. Yet in spite of operating in a highly regulated space, they have done a good job of getting to know and understand their consumers.
More Consumer Focused
What this means is that organizations must become more consumer focused which requires developing analytical capabilities in order to tap into the power of patient level healthcare data. Traditionally provider’s ability to track and analyze patients has been limited to activity within their walls. To truly understand the patient, the analysis needs to include all healthcare behavior. For this external data sources are required.
The use of external claims data enables marketers to fully understand the patient’s healthcare journey. Working at very granular levels it offers the ability to profile patients within a community. It not only provides incidences and patient volumes but also paints a detailed picture of the socioeconomics and demographics of the population that are impacting health outcomes and cost. Further application of the data and analytics can address questions of patient flows; deliver insights into volume and value of referrals. The implications of these insights cut across multiple aspects of commercial operations from marketing through to informing M&A activity.
Keys to Success
The healthcare landscape has and will continue to change. Success will come to those who are best able to adapt to the new environment and prepare for what comes next. With the right data combined with good analytics and the right people to make data driven decisions, organizations can create a competitive advantage. Big data are no longer buzz words. In healthcare the concept will quickly move from a competitive advance to cost of entry. The organizations that embrace and continue to develop their capabilities are the ones who will find lasting success.
Eric Talbot is the Managing Principal at Epiphany Insights, a marketing analytics consultancy helping companies increase sales and profitability by advancing the use of data and insights via evidence-based decision making. Prior to Epiphany Insights, he was VP of Strategy & Insights with Univision and is a healthcare industry veteran with nearly 20 years of consulting experience.
AON’s analysis of employee contributions 2015 www.insurancejournal.com/news/national/2015/11/12/388800.htm