Being a healthcare leader is stressful. Period. Besides the challenging macro-trends impacting the industry, day-to-day operational challenges plague executives.
“Data is only valuable if it can deliver insights and better decisions... Healthcare organization have a wealth of demographic and medical information about patients, but know very little about their motivations. As healthcare transitions from episodic care to population health, it is more important to understand consumer behavior and decision making.�? - The Future Role of the Healthcare Strategist
You’ve probably asked yourself some of these strategic questions:
How do I…?
- Increase patient volume, referrals, diagnostics…?
- Build a brand that’s respected in my community?
- Know where to expand or provide new services?
- Prioritize marketing efforts across multiple service lines?
- Target advertising messaging to get better ROI?
- Do more with less?
You’ve also probably read books or attended seminars on how to develop strategy driven by the “patient voice�? or “voice of the customer.�? There are so many self-help books out there for healthcare leaders and marketers because the truth is, it’s hard marketing and driving growth in healthcare organizations. This is partly because healthcare has been resistant to think of patients as customers and of healthcare organizations as businesses. This has had wide-spread implications in how the industry has approached strategic planning and market development in the past.
But, no one has a choice anymore. Even if there’s not a hospital across the street that you compete against, you’re now competing for reimbursement dollars from CMS against hospitals across the nation, and other service lines are facing similar pressures. It’s not only about providing great care, it’s also about keeping the doors open in the face of competition. You need to know where to improve or grow services to meet the needs of your patient population while competing against others trying to do the same thing.
Trouble is, what’s perhaps worked in the past is no longer obtaining the same results – the market has changed and continues to change. Michael Porter and Thomas Lee say quite frankly, “It’s time for a fundamentally new strategy. At its core is maximizing value for patients: that is, achieving the best possible outcomes at the lowest cost.�?
While Lee and Porter suggest fundamental changes to cost structures and care delivery models, at the heart of their plan is a paradigm shift: focusing on what provides value to patients. This shift in thinking has widespread implications in how we approach strategy.
At the core of every strategic challenge faced within the organization is a customer (patient) making a choice based upon what they value. Patients have free will to choose, and we as organizations succeed when they make choices that favor us. Maybe this is choosing you over a competitor or even choosing to engage in better health behaviors. If we can understand what aspects of value are important to healthcare consumers when making that choice, we can build strategy to influence those decisions.
This probably seems fairly logical so far, but the trouble is that healthcare executives have to act quickly. And in our haste to develop strategy, and lacking appropriate data to generate this type of insight, we fall back on our own seasoned judgment and perspective. We start with the words “I think…�?
- I think this is what matters to patients.
- I think this is why patients are going to our competitor.
- I think this is where we should invest for the future.
So how do we get from, “I think�? to “I know?�? A great place to start is to actually ask customers. I know, revolutionary thinking, right? Sounds obvious, but there’s some very real reasons why folks don’t often do this. It takes too long. It can be expensive. It means having to deal with those people in marketing or an outside agency. And, most importantly, why bother when we “think�? we know the answer anyway, right?
But the sad truth is that we’re not very good at predicting what’s important to patients and engaging with them. Even the best of us. We have a natural internal bias and we make decisions rooted in this bias without even realizing it.
Evidence of this bias is out there. Just think… How many hospital marketing campaigns have you seen where it’s all about the organization? Their providers talking about their awards and their mission. But are these tactics effective in winning patient choices? If we’re honest with ourselves, are they achieving the results we want?
The only way to know is to gather customer insights to find out what patients value. I bet the idea of basing strategy on customer insights is nothing new to you. In fact, if you have patients, you no doubt already gather patient satisfaction or CAHPS data. Maybe you’ve even done focus groups or market research in the past to understand why patients or prospective patients choose you. This allows you to know where you are providing value to patients. Here’s an example:
While that’s definitely important information to have, here’s where most healthcare organizations have a scary blind spot: the competitive component.
Healthcare organizations not only need to know about what patients value - they also need to know how their competitors fair on those factors compared to them. That’s where things get really interesting.
When you have the competitive information, all of a sudden you realize that the much of the value you provide is matched by your competition – it’s not providing you an advantage. You can’t depend on it to win you any patient choices. And you also find that your competitor “owns�? value that you don’t provide in your patients’ opinion.
There are all sorts of implications for strategy here – a discussion for another day. But let’s go back to those strategic questions that plague you as you’re trying to go to sleep. It’s no longer enough to “think�? you know the answer, you must “know.�? And the only way to “know�? is to view your market through your patients’ eyes. Give it a try, and see if you sleep better at night. Sweet dreams!