Health Markets Guru

Begin with a Better Understanding of Patients

Continuation of "Better Market Research Leads to Better Hospital Growth Decision-Making":
(pt 2)

Many CEOs dismiss the opportunity to discover the plans of their immediate competition, or even of the availability of this unique knowledge. They acknowledge that, especially in states that don’t require Certificate Of Need (CON) authorization to build, competition for patients and physician specialists is increasing, but then fail to address how the market will eventually be served.

Instead, they look to patient surveys to validate plans already sacrosanct. They reason that people use hospitals in a time of imminent need, for needs that can’t be addressed elsewhere. The results of patient surveys presumably illuminate how the market is being served, un-served, or underserved.

This reasoning is flawed. Notwithstanding the skill of healthcare market intelligence firms to discover coveted competitive information, CEOs need only scrutinize most patient surveys to realize that patients are not being asked the crucial questions, the responses to which would provide a more focused understanding of service layers the market has achieved. This is but one of many kinds of intelligence with which decision teams would be better acquainted.

Organically, people fed up with navigating a physically cumbersome hospital campus and who have many choices among locations are finding equilibrium in innovative healthcare delivery that pays attention to consumer conveniences. The growth of outpatient facilities providing services which are no longer the exclusive domain of hospitals demonstrate this trend in full swing. Certainly health insurance organizations are responsible, but the benefits to patients are also quite obvious. And hospital systems are starting to take notice. 

Indeed, a few leading edge, national hospital organizations envision wide-scale decentralization of healthcare facilities – clinics and acute care centers that dispense nearly all varieties of health treatment, from the mundane to the highly specialized, in a retail-like, sometimes 24/7 setting. From an organic perspective, consumers will more greatly impact how hospitals operate, so it makes increasing sense to ask them the difficult questions most healthcare execs have been afraid to pose. Our patient interview studies for hospital clients continues to uncover a wealth of intelligence about how people will behave given different scenarios, especially when they have choices.

How will your health system change as a result of these trends? Will competition for patients and physicians create new kinds of challenges unforeseen in healthcare reform? Can you see yourself using retail medical offerings conveniently, so as to shift the entire role of the mainstay of healthcare -- the hospital? What does the slice of the aging Baby Boomer population show us about the need to understand healthcare customers and how they will access, use and purchase health services? Who among the C-suite in big health systems is reliant upon this intelligence?

----Michael

Who Is The Customer In Healthcare?

Exactly who is the customer in healthcare? With so much discussion going on right now about the future of healthcare and the system that needs changing, I find it incredibly shocking that most commentaries are not focused on the customer. This is why I would like to bring overall clarity to the very complex and challenging question of how to successfully reform the healthcare system, through the identification of customers and the needs each type holds sacred.

The primary customer may be defined as the Patient, the Patient's Family, the Physician and Physician Groups, and Society-at-large. Secondary customers may include provider staff such as Nursing or other Caregiver staff, Specialty Helpers such as those found in Operating Rooms, the Local Community & other Stakeholders, Investors, and Regulatory groups such as accreditation or enforcement bodies from governmental sources. Tertiery customers include Health Insurance Companies, the Hospital Leadership, hospital Equipment & Disposable Vendors, Consultants, Ranking Agencies like Health Grades, Watchdog groups, Medicare and Medicaid, Healthcare Futurists, Congress and the White House, and myriad Product and Service Providers bringing innovation and proven assistance to current players in the health marketplace.

Wow, that is a huge amount of potential customership! Each group has it's own set of needs and there are even subgroups within each that have very different needs and desires. No wonder healthcare reform is so challenging. Still, if we addressed the needs of the primary customer types, what might we find in terms of similarities of needs?

I recently picked up a white paper published by HFMA (Healthcare Financial Management Association) that demonstrated this technique quite well. In the piece, two insets on opposite pages showed the needs distinctions and surprising similarities of hospital decision-makers and physicians working in relationship to the hospital. This demonstrated a time-honored principal of negotiations: find common ground and build from there. The epiphany that popped up for me: redesigning our healthcare future will not be so daunting if we can sort out all needs of all customer types, then find common ground from which to build. I wonder if the candidates for president are willing to find this relatively simple approach to healthcare reform useful. Has any of the remaining 3 viable candidates revealed a solution based on listening to customer types for needs?

Sometimes I find other bloggers who express a need to listen to our constituents. Who among these readers and writers see a direct connection between understanding customers and finding a meaningful and lasting approach to healthcare reform?

For a deeper look at how one health system is taking on the challenge at a local level, see Medical City's Britt Barrett's continued works about creating a special culture in his Dallas, TX health system. If you'd like to discover case studies that speak to customer-centered decision-making for healthcare, look into works by Meg Columbia-Walsh of CommonHealth and Shel Holtz of Holtz Communication + Technology.

----Michael

Better Market Research Leads to Better Hospital Growth Decision-Making

As we sat in his office with the door closed, the CEO grimaced at the choice he needed to make on behalf of his entire organization. They had gradually and quietly acquired the land parcels necessary for this expansion for years, and yet, they were no further along in the gathering of intelligence that would help them make sound choices about the type and size facilities they needed to maximize their long-term investment.

As the lines of worry deepened on his brow, I suggested that the source of his data might well be found within the hospital’s core constituencies. Our decision-making might be able to be postponed just a short time so that more substantive measures of the future of his organization’s growth could help determine the scope of their entire investment. The weight had begun to lift from his shoulders. Our new business relationship was off to an auspicious, potentially course-correcting start.

Predicting the future hospital campus is vexing the minds of healthcare system c-deck decision-makers these days, especially in light of escalating costs and competition for the right mix of increasingly scarce specialists to provide sought-after procedures. But the data many decision-makers use to make these decisions for their respective long-range planning falls short of a well-articulated strategy to accommodate market trends and the future of medicine.

For years, these decision-makers have relied on a simple principle: build where rooftop numbers are expanding. Then they use demographics to fortify a deeper understanding of the community makeup found under these rooftops. Most executives still believe that this understanding is enough. Some take an extra step to ask doctors if they’d make a move to their facility if the circumstances were right.

Yet, many in the c-deck continue to be perplexed by the kinds of expansion which will meet their future revenue cycles. Examples of different kinds of expansion abound in urban settings. These greatly varying visions are supported by gut intuition and past experience as determinants of growth, without regard for any market analysis. Clearly, these aren’t enough. Instances where shiny new hospital facilities sit nearly vacant are commonplace, while nearby unsightly competitors are flush. Strong competitive forces and sweeping changes to healthcare delivery will dramatically reshape how hospitals are utilized and therefore built. Today’s savvy leaders need better intelligence to fortify and buttress decisions about their growth.

 

What do you believe are better sources of intelligence for C-Suite decision-makers to leverage for better decision-making? Where would they find such intelligence? What weight would they give it, in combination with the rest of what they rely upon (gut and past experience)? I'll provide these and other responses in a few days once we've fielded comments. [This article, originally penned by me in Feb 2008, is reprinted with permission from Az Medical Office, published nationally by Square Foot Magazine.]

----- Michael

Why Is Service Line Growth So New to Hospital Executives?

The invitation read: "Please come to our hospital offices this Friday and be ready to share your convictions regarding our need to assess and remix the service line bundle. We need your expertise, and are finally ready to take this seriously."

I was delighted. I was intrigued. I was flabbergasted that this took so long. I was amazed that the top guys were finally getting the message. And I was astonished at how many times this conversation had occurred in the last 2 years.

I've been providing strategic planning services to healthcare organizations for almost 20 years through my consulting practice. "Service line growth" has become the latest buzz phrase, although it's been around for longer than 2 decades.

My message is to provide clarity to decision teams about the kinds of business that they are in, the kinds of business they should be in, and the kinds of business they need to divest from their operations. My approach includes a combination of financial due diligence and market intelligence gleaned from our primary research efforts. And it never ceases to amaze me how health organizations rarely applied the practices of health diagnostics and treatment to their own fiscal stealth.

Why is this? Why are healthcare organizations and specifically hospitals and medical practice groups  wary of scrutinizing their successes and failures to find a better approach to delivering care, both from a customer-friendly perspective and a financial stewardship basis? Let's share some answers and write about this topic as the story progresses.

-----Michael

Not All Healthcare Conferences Are Alike

I just returned from the latest conference brought to us by Forum for Healthcare Strategists called Customer Based Marketing Strategies.

Despite my reservations about it not being a bastion of potential decision-authority leads nor strong source for content, I was absolutely blown away by the talent addressing this targeted audience. The faculty presented lots of compelling models and illustrative case studies to spotlight how consumerism, population growth, payment systems and health system role-shifting are intersecting to shape the future of healthcare.

Having attended three conferences in the last 5 months, I've noticed that value varies as much as clothing styles. And as I rated this conference yesterday, I solidified for myself those components that make for an excellent conference:

• Session Content that teaches me something new
• Examples that really resonate with the audience, both from identifying with the challenge and from the way the chosen solution addressed the problems
• Speaking capabilities that capture your attention and don't let go
• Invitations to interact
• People with whom I may work, either as a strategic partner or as a client
• The conference site facilities
• Opportunities to network, grow your colleague base, and improve your relationships
• Discovery of new partners, solutions and people who can help you

For my money, I was pleasantly surprised that this conference had 95% of what I desire. Perhaps the Arizona Grand was a run-down, repackaged resort undeserving of its new name (formerly Point S. Mountain), but everything else was right on target. I am also surprised and delighted that most of the attendees, perhaps even as many as 66%, fell into the category of potential clientele, people who need what I have invested 20 years into solving professionally. Additionally, the subject matter was actually the stuff that all decision-makers, and not just those with marketing responsibility, are concerned about: How hospitals can grow service lines to improve market share, positioning, and importantly, revenues; Strategies for consumer engagement with healthcare organizations; Strengthening the connection of Physicians to healthcare organizations; How to leverage the latest internet tools to grow your brand; and, Changing your culture transformationally, so that health system employees become the ambassadors for consumers to have wonderful and lasting experiences.

Did anyone attend this conference? What are your thoughts about whether it accomplished for you the things you most enjoy? Where might it have missed the mark? I also am curious how other people define success at conferences, and how you determine if the conference worked. Share your thoughts.

------Michael

Retail Medicine Impact Probably Irreversible

I'm going to a national forum on market-driven healthcare strategy beginning this Sunday, April 6 here in Phoenix, part of the ongoing healthcare marketing conversation leveraged by the Forum for Healthcare Strategists. One of the breakout sessions uses a case study to illustrate retail healthcare strategy for hospital systems. The presentation will be given by Michael O'Neal, Sr VP/COO of Memorial Hospital and Health System of South Bend Indiana.

The blurb on the conference prospectus forecasts more than 2000 retail clinics by the end of this year. Six weeks ago, I attended the Healthcare Financial Management Association's 2008 Executive Summit, and one of the best presentations came from a team of senior Deloitte consultants, John Bigalke and Glen Feinberg, who spoke of Five Strategic Shifts in Healthcare Business. One of these disruptive innovations, retail medicine, was substantiated as a strategic vector which will forever change the game for traditional providers of health care goods and services.

This coming change has been signaled by the increased use of personalized care management tools to enable consumer control of health decisions and purchases, increased integration of healthy environments and conventional health goods and services in community-based health system design and management, and increased use of in-home and mobile monitoring care management devices.

These guys are all predicting that health care consumerism will change how health is accessed and delivered in this country. But are hospitals and physicians ready for this change?

Anytime I engage with decision-makers in these circles the impact of retail healthcare is minimized in their views. Indeed, the recent closing by Walmart of over 800 in-store clinics, according to these leaders, heralds an end to self-diagnosis and treatment tendered by mere technicians. Notwithstanding the fact that Walmart closed following the mismanagement of Medicare billing such that their receivables were 180 days and getting older, these decision-makers may have a point. And yet, I wonder about the greater impact of retail medicine.

In the later half of the 1990's America saw the incredible growth of retail digital imaging centers. For a significant out-of-pocket expense, you could take a break from your shopping, lie back on a table, and get a full or partial body scan that would let you know the state of the inside of your guts. Are you rife with polyps? Are your joints deteriorating? What about the health of your kidneys?

The experiment took a turn for the worse when there simply weren't enough people streaming in with $1000 extra disposable income at their local mall to support operations and the substantial payback on capital intensive imaging machines. But while the retail scanning business began to die, something happened to the overall perception of the healthcare consumer in this country. People began to realize that their health actually BELONGED TO THEMSELVES!

Up until this point and since the days of Hippocrates, control over our own health was the exclusive domain of the physician and the environment in which he/she practiced. This shift to retail healthcare is changing the way we think about our own health as individuals, newly empowered in the society. It is a remarkable opportunity, and a scary shift in health at the same time.

What will this mean to the practice of medicine? In what capacities can physicians and hospitals still shine? And if the trend continues to have an indelible impact on the future of health care delivery, what can physicians and health systems do to collaborate with their customers to create a better tomorrow for everyone in the Future of American Healthcare?

----Michael

Market Research: The Source of Improved Health in Healthcare Reform

Recently I tuned into a speech on C-Span, entitled "The Future of American Healthcare" regarding healthcare's top priorities for near future change, given by Mayo Clinic CEO Dr. Denis Cortese. While not the finest speaker in the land, Dr. Cortese called for elegant solutions to today's most vexing health system problems.

Specifically, Dr. Cortese called attention to the fact that greater than 50% of all healthcare dollars are wasted on unreliable care in this country. Wow! That's a startling statistic! A great deal of this waste comes from mistakes and clinical errors leading to loss of life. My friend and colleague, Nick Devenney, has reiterated this claim for years. American hospitals are responsible for more than 100,000 deaths each year for people who were otherwise not terminal.

So you go into a surgical procedure, with all kinds of reassurances from your physician ("It's very routine, we'll have you back on your feet in no time."), and you wind up in a morgue because somebody on the surgical team didn't wash their hands since examining the last patient (who happened to have a staph infection). We used to hear urban myths about nurses or doctors leaving surgical instruments and sponges inside the body cavities of their patients; turns out this is a relatively common occurrence!

Dr. Cortese suggests that American Hospitals begin to develop a learning culture where all information about procedures and patient outcomes are shared throughout the nation. As we learn how things happen, we develop practices and standards of performance that lead to fewer and fewer defects. He further suggests appointing a Health Czar who reports daily directly to the United States President how many people were killed by the health system last night, and how will we prevent these kinds of deaths in the future.

Notwithstanding the expertise and passion brought to the table by the CEO of Mayo, WHY has it taken us this long to address this problem? Why doesn't our country have a central repository of health practice information to share across all lines of practitioners? Why aren't we learning collectively from common and preventable mistakes that are tragically taking lives unnecessarily?

The answers can be found throughout the health system at-large, and indeed, throughout corporate America. Decision-makers are focused on fixing today's crises, reacting to the consequences of decisions made years ago. Ours is a business culture that prefers to make decisions from the gut, rather than the collection and leverage of reliable market research data to let us know how we're doing, what areas need attention now before they become crises, and what areas are we showing improvements with the actions we have taken.

You may not think of American healthcare as a business, but at 16+% of GDP and rapidly growing, it's the largest business enterprise we have. And this business needs to do a better job of accessing its many constituents that shape how health is delivered, utilized, and indeed, accounted.

What are your thoughts? Is America's health system crippled by a reactive mindset and overpowering the cost escalation curve, or is there finally some movement toward improving the delivery of care with attention to better outcomes and successes? What pockets of performance are especially enlightened? Where can you get your operation and have the lowest chance of an accident?

----Michael