FROM ENVISION HEALTH
HOW THE AFFORDABLE CARE ACT HAS IMPACTED PROVIDER AND PAYER GO-TO-MARKET STRATEGIES AND HOW YOU CAN ADAPT.
Dickinson Wright had the opportunity to sit down with leaders from Envision Health to obtain Envision Health’s perspective on a number of questions relating to the industry implications of the Patient Protection and Affordable Care Act, Public Law 111-148 on provider and payer marketing and business strategies. Below are a few of our questions and Envision Health’s responses, which our readers may find to be interesting. Set forth below are Envision Health’s interesting insights and industry perspective. The full version can be found on the Envision Health website www.envhealthsolutions.com
According to a recent study by Accenture, by 2017 approximately 18 percent of the American public will purchase insurance through exchanges versus relying on traditional employer healthcare coverage or foregoing insurance coverage entirely. What does this mean for health plans and their relationship with their members?
Healthcare Industry Perspective (according to Envision Health):
First of all, many insured Americans do not have a good understanding of the services provided under their current health plan, nor do they spend much time considering available benefit options during open enrollment. A study conducted by AFLAC showed that 41% of employees spent 15 minutes or less researching their benefit options (AFLAC Open Enrollment Study, 2013 / 2014). Comparing the amount of time spent researching benefits with the amount of time deciding what type of television to buy (2 hours) or researching a new car purchase (10 hours), it is clear that health plans face significant challenges in marketing services to potential members, regardless of the type of health insurance exchange.
Prior to the ACA, employees receiving health benefits via their employer had little choice or incentive to spend much effort analyzing health options provided by their employer. That will soon be changing. Recent employer surveys indicate that more than 1 in 4 employers are considering moving to a private exchange in the next three to five years.
Envision Health Perspective:
The ACA has transformed how health plans go to market. While their core expertise has traditionally been business-to-business (B2B), they must now become adept at direct to consumer (D2C). In fact, delivering effective consumer marketing, education and informational tools will now become critical to their survival. This is quite a disruption for an industry that until recently lacked valid email addresses for the majority of their covered lives. According to Kelley O. Smith, RN, MPH, and COO of Envision Health, “Health plans are asking us ‘Can you help me find and attract the young and healthy?’ The most progressive carriers are rapidly finding ways to augment their existing talent with consulting expertise to help them win on the exchanges. These new challenges require a deep understanding of marketing, technology and segmentation tools…and consumer health from a clinical perspective.”
Health plans are not the only industry players that are affected by the current market trend. How are healthcare providers affected? Do they need to modify their marketing strategies as well? Healthcare Industry Perspective (according to Envision Health):
Providers are in the midst of a classic market disruption. The ACA has fundamentally changed their compensation model so they must become adept at population health management and find ways to take out internal costs. At the same time, providers must adapt to increasing regulatory requirements while attempting to capitalize on new technology breakthroughs. The following are some of the ways healthcare providers will be affected:
New patients, more services covered – as more patients are insured, providers should see a rise in requests for service. The good news is an increase in revenue. The potential bad news is the risk of overloading physician practices, in particular, primary care physicians. In addition, the ACA requires coverage of 63 different preventative services, also potentially increasing the burden on physicians.
- Increased price sensitivity – co-pays and high deductibles may discourage patients from visiting the provider.
- Transparency – consumers will have more insight into costs of care and quality of care.
- Loss of revenue – due to patients using more “retail-orientated” options.
- Reimbursement changes – new payment methodologies based on outcomes, such as bundled payments, patient-centered medical homes, and shared savings in ACOs, as well as penalties levied based on the Physician Quality Reporting System (PQRS).
- Increased collection activities - more out-of-pocket expenses for the consumer may result in higher rates of non-payment of services.
- Consolidation – hospital systems buying hospitals, hospitals buying physician practices, small physician groups merging.
- Competition among hospitals, surgeons, physicians – all seeking to engage the “best patients”.
Envision Health Perspective:
Providers today are well on their way to traversing the rocky road from fee-for-service to value-based care. Unfortunately, while they straddle both worlds, they must continue to drive revenue by attracting more patients for profitable services while avoiding readmissions penalties and achieving quality standards defined by public, private and physician-led ACOs, patient centered medical homes, Medicaid health homes, the CMS Delivery System Reform Incentive Programs, etc. Addressing these challenges requires a strong command of the latest technology advances, federal healthcare policy, clinical workflows, and how to drive behavior change through advanced marketing. According to Kelley O. Smith, “Each of these initiatives requires some level of risk stratification and consumer engagement; these are not exactly skills providers were known for prior to ObamaCare, but it’s precisely the type of work that Envision Health and other ‘new age’ consulting firms do best.”
That being said, what do you think are the best strategies for providers to compete in the marketplace? Healthcare Industry Perspective (according to Envision Health):
First and foremost, hospitals must not only understand the current legislation, but also the intent of the federal legislation to anticipate where it is headed and align their strategies accordingly. Providers, especially hospitals, need to “re-think marketing”. Gone are the days when just having a website, having billboards and publishing press releases was sufficient. Many hospitals now employ a Chief Marketing Officer who engages directly with the executive board and helps to inform their business strategy. There are numerous marketing strategies developed and refined across more advanced consumer-centric industries that can be applied to providers today:
- Understand your market – Know your audience, define personas, and segment and personalize your messages wherever possible. Learn to “think like insurers” and utilize big data to your advantage. For example, all providers have (non-PHI) patient data that could be used to reach out to existing and past patients and to develop predictive models to attract the right types of new clients. Predictive analytics tools are proliferating in the market today and are becoming more highly customized to specific segments of the population. Begin with the end in mind. You must define your goals for marketing campaigns in advance. That which gets measured, gets improved.
- Include a Call-to-Action – Make your calls-to-action contextual. For example, if an individual is browsing the physician section of your website, include a “Schedule an Appointment?” button to activate the consumer to respond while they are “shopping”.
- Understand “Local” Search Engine Optimization (SEO) – Where does your practice or hospital “land” on a web page when the consumer types in “hospitals near me” or “cardiac surgery in Detroit”? Appearing in the number one position will help your organization get nearly 35% of the clicks. Appearing in the second position gets just 12% while the third gets 9.5%, and it trickles down to 2.2% for the tenth position. Make sure your hospital or physician group practice gets included in all the appropriate local, regional and national listings (e.g., bariatric surgeons in Michigan, etc.).
In addition to the above recommendations, provider marketing plans must consider the following realities in today’s consumer-driven marketplace:
- Be ready for transparency – Consumers are increasingly looking at a number of options and criteria when making health care decisions. Cost and quality metrics are becoming more available and will continue to expand.
- Embrace social media, including mobile – Some providers are asking their patients to share their story on Facebook and other social media sites. Patient testimonials, where the patient talks about their condition, procedure, life struggles can be very powerful because they are sincere and believable.
- Use innovative tools to engage patients – For example, a mobile health solution that has generated an 80% engagement rate in a 12 month pilot study. By preparing patients for surgery and recovery through prescriptive programs, the application is helping healthcare providers reduce costs and length of stay by an average of 30%. These types of solutions will not only help providers achieve financial rewards from shared savings initiatives, but they also result in real patient benefit that can be shared more broadly with prospective patients, families, care teams, and referring physicians.
- Legal issues to consider – Providers must carefully review all public-facing materials to ensure that advertising claims are not overstated. Your marketing leaders need to be aware of the most common causes for healthcare consumer lawsuits. Inflated advertising and other messaging can become a PR, and possibly, legal nightmare.
Envision Health Perspective
It is possible for providers to not only survive, but to thrive in today’s market. In order to do so, they should simultaneously align their strategies to healthcare’s Triple Aim and rapidly apply marketing best practices from other industries. They have much to learn from “local” digital marketing strategies such as those refined for automotive dealerships and in other industries – and they need to apply them to population health management and fostering patient engagement and loyalty. According to Tim J. Busche, “Successful marketing in these changing times is both a fine art and a constantly evolving science. On one hand, providers have always needed to create innovative, integrated and targeted marketing campaigns. In today’s evolving marketplace, however, they now need to create strategies that align with where federal healthcare legislation is headed. This is not simple. Our clients have chosen to work with Envision Health because we enable them to connect the dots…in a way that makes sense for their business.”