Business to Business (B2B) marketing for physicians, hospitals, and other healthcare providers is part of an overall strategy to attract and win market share by connecting with other businesses instead of directly with the consumers that make purchasing decisions.
As an experienced presenter with more than 30 years on stage, I now relax in my element and enjoy people watching and reacting to my comments. This was the case at an international conference on health tourism referral development where I recently presented the keynote. The physicians in the audience were “all ears” and busy writing copious notes as I presented. A passing thought crossed my mind: “How different from a North American audience, where the same topic would likely have been poorly attended and likely ignored by most physicians and hospital administrators. Such a pity.“
Strategy is “… an integrated set of choices that uniquely positions a firm in its industry, so as to create sustainable advantage and superior value relative to the competition.” – A.G. Lafley and Roger Martin, — Playing to Win
Healthcare reform in North America, social media, economic uncertainty, and an increased appetite for information has a huge effect on healthcare buyer behavior. Physicians, psychotherapists, hospital marketing managers, and ambulatory surgery centers benefit from keen insights we provide about patient buying mindsets, decisions tied to economic empowerment of self-pay and concierge care choices, and the process of choosing healthcare providers. In this sense, there’s much to be learned from studying the different economies of Europe and other markets where there is a basic package of insurance similar to our new ACA program, and then the private pay side for “whatever else one would like to add” to their elective care choices.
PPOs: Where self-insured, employer-selected healthcare providers are admitted to a bespoke network from which consumers can choose care suppliers
From small companies to massive multinationals, to manufacturing to retail and even to education, the self-funded and self-insured market in America far outweighs the insured and healthcare exchange buyers. There are more than 210,000 self-funded and self-insured health benefit plans offered (and funded) by employers. These plans have a distinctively different benefit design that is often much richer than the exchange plans (which barely exceed Medicaid standards). They are designed to attract retain corporate or organizational talent, and are truly seen as an “employee benefit” instead of a “government mandate.”
Now that the tables have turned on coverage and pre-existing exclusions, if a company didn’t care about attracting and retaining talent and simply viewed employees as a commodity, they’d simply push their workers out to the exchange and tell them to buy their health benefits at the exchange and pay out of pocket for choice and richer elective options. So in this sense, we’ve become a lot like Germany, UK, Nigeria, Australia, Colombia, Spain, Greece, and even India, in that sense. We have a complicated system of tiered healthcare coverage, access and consumer choice.
History of Consumer Choice in North American Healthcare
Prior to 2003, physicians, hospitals and healthcare providers of all sorts looked at contracts with local and regional managed care plans as the way to get access to the patients. Then came the advent of Consumer Directed Health Plans (CDHP) and Consumer Directed Health Care (CDHC). Back then, I was hired to give hundreds of presentations each year on what to do about these plans, how to build strategies to capture market share, how to deal with the collections tribulations caused by the transition to qualified high-deductible health plans (HDHPs). I presented award-winning seminars for the Healthcare Financial Management Association (HFMA), Medical Group Management Association (MGMA), PAHCOM, AICPA, American College of Surgeons, and hundreds of other event sponsors. I was hired by hundreds of hospitals to participate in strategic planning for their revenue cycle management department, their managed care contracting department, decision support, but rarely, their marketing department. Why? Because they didn’t have one!
The marketing department has left the building
Many hospitals “jettisoned” the marketing department staff as a cost containment maneuver, primarily because marketing wasn’t as relevant in a managed care and government payer world of reimbursement. That’s the right word too, “jettison”. It means “a voluntary sacrifice of cargo to lighten a ship’s load in time of distress” and these organizations were in financial distress. Rates going down, not up. Cost escalating, collections of high deductibles and copays through the roof, patients not meeting their financial responsibilities, and managed care all-products contracts looking like the Swiss Army Knife of fee schedules and reimbursement nightmares all in one. They still are in distress. And, I am of the strong opinion that they haven’t seen the worst of it – yet.
Fast forward to 2014 and the challenges of managed care contracting + consumer choice, revisited.
Comes now, the new era of patient buying behavior and consumer choice. These days, when a new managed care plan comes with an offer, not every provider is in a rush to execute a contract with them. Some have a ton of worthless paper and unpaid claims from the same company, “formerly known as”. Some, like psychotherapists that contracted with Magellan and then had the rug pulled out from under them with WellCare at the turning of the page on the new year, are still reeling from the wasted time and effort spent to get themselves added to the panel on Magellan, only to be outside looking in and bewildered – again – only months later. Others, after ten years of exemplary service to United, terminated for no cause, and not even shown the respect to be terminated in accordance with the procedures set forth in their contracts. I can say this in print because I have the contracts, the letters, and the facts in my possession to back these statements up. There’s no malicious intent, my purpose for naming these incidents is strictly educational. Providers have to think strategically and plan for “what if” scenarios when developing a B2B marketing strategy. That’s my purpose in this article. Businesses are free to do as they please and let the market decide how to react. I teach how to respond.
[vc_call_to_action title=”Need help with your B2B Marketing Strategy and Deployment?” button_title=”Chat with an Expert” button_link=”http://meetme.so/mariatodd”][/vc_call_to_action]
In a proper marketing strategy, managed care discounts are a merely a marketing budget allocation, aren’t they?
My thinking is this: If there’s no marketing department of speak of, and the managed care plans are to be relied upon for market “steerage”, then isn’t the discount extended to the plan a B2B marketing adjustment? If yes, than how’s that working out for you? Where are the ROI metrics?
Here’s some more of my thinking: Managed care contracts are nothing more than fishing licenses. If you get in the boat with a license and no bait and no rod and reel or net, what is your strategy for dinner tonight? Because the fish have no plans to follow you home or jump in your boat on their own. And even if the fish were so inclined to jump in a boat, why would they choose your boat?
Where do B2B Buyers get information?
If you want to influence a buying decision, you need to start by asking where buyers go for information. 87% of buyers go out and look for advice before choosing. Social media plays a role, but more than two out of three start with a search… on Google. Will they find you? According to Buyersphere: 2012, 21% of B2B buyers use social media at some point in the buying process. Whether it is quick and dirty preliminary vetting, due diligence, or just corroboration, what will they come away with if they search for you? Your branded marketing, or HealthGrades’ or some other website that lists you but doesn’t do you or your brand any favors? Right click on this link – right now – and open a new window and search for yourself.
The other two thirds use Word-of-Mouth (WOM) more often, sought specifically from female mouths. That is no surprise. Women make most of the world’s healthcare purchasing decisions, according to numerous statistical reports widely found in the stacks. When someone recommends you, that information is considered more useful than any search results.
How are buyers influenced?
B2B buyers may read your messages and unbidden advertising, but are you really influencing them? In surveys conducted on how buyers buy, the lowest scores for influence were for advertising – and the top of the pile were real world events. Does your medical practice or hospital/ASC marketing reflect this?
These days, when a client or new caller asks me to help them get their managed care payment rates increased, I have to ask: “Why would a payer agree to pay you more? What’s special about you? How will they realize how valuable or special you are – to them?” Then I have to start tapping the phone because I am not sure if there’s someone else on the other end of the line. Things get really quiet.
Really? You think what? I have magical powers as a consultant? Am I bestowed with the Captain Picard power to say “Make it So?” Dream on! No consultant has that power. We may be experts at negotiation, but we need to have something to leverage that the other side wants – or at least something we can make them “think” they want and can’t live without.
Managed care contract negotiations and business development has changed.
Healthcare suppliers and marketers who correctly identify trends in the market and in consumer behavior will be most effective in planning their marketing strategies and communications. The movement of offline events, marketing efforts, and other brand awareness strategies is increasing according to numerous marketing reports I monitor regularly. Word of mouth and engaged consumers giving testimony on request is increasingly viewed as more influential. What part of your strategy addresses this phenomena?
Healthcare buyers act differently at different stages of the buying process. There are three distinct stages of business-to-business decision-making:
- Identifying and defining the business requirement
- Identifying potential suppliers to meet the requirement
- Final selection of the supplier to be used
At earlier stages, they look for generic solutions (lower cost, better outcomes, value-based purchasing, etc.) to solve their problems. But during the later stages, they switch focus to the task of supplier selection, due diligence, and “what else”.
When do B2B buyers get in touch?
Early direct contact is more common where the purchase was something completely new to the business, and on higher value products and services. That doesn’t mean they chose you as a finalist, it simply means that you get to park at the lake. You still aren’t in the lake, in a boat, with a lure at the end of your fishing pole. If’ you plan to eat fish tonight, there’s lots more work to do to meet that objective.
B2B buyers contact sellers by a number of communications technologies – not always by phone
Many are of the post-PC era. They use tablets, smartphones, connection widgets, VOIP click-to-talk, and SMS. How do they connect with you? Through an answering service or a medical practice receptionist? OMG! ROFL! LOL! Prospects under the age of 50 access a higher proportion of their electronic information by tablet/iPad than older ones. Is your website optimized for responsive device and retina-ready visitors? Most doctors I’ve spoken with recently in the USA have no website of their own. Others have some old throwback to 2008 that hasn’t been updated in 3-4 years. How’s that working for you? No really? What are the metrics of your website and its marketing contribution? For all I know many of those websites are a detriment, not a contribution!
Thanks for reading
While I don’t claim to have all the answers, I hope I’ve encouraged you to think about your managed care contracting as a a part of a comprehensive B2B marketing strategy. There’s no doubt that B2B buyers have different needs and objectives for healthcare purchasing, and that their choices limit what consumers can ultimately choose for elective services without reaching into their pockets when they want greater choice, anonymity, and a feeling of consumer empowerment.
And of course, if you would like some help with planning how your brand will accommodate changing healthcare buyer behavior and managed care contracting, we’d be honored to assist you.
[vc_call_to_action title=”Is it time to review and update your B2B Marketing Strategy?” button_title=”Chat with an Expert” button_link=”http://meetme.so/mariatodd”][/vc_call_to_action]