4 Ways to mitigate risk, accelerate efficiencies and drive additional revenue

Today, every healthcare executive is charged with creating a stable and sustainable future for their hospital or clinic.

But "how" is a big challenge, given they face what can only be described as a perfect storm:

1) Consumers are demanding impeccable service and top-notch care—yet resent rising costs and demand transparent pricing.
2) Insurers are requiring maximum value and cost-effective population management—yet they can't explain how much they'll pay for it because, in the face of today's shifting legislative environment, they can't predict their own business models.
3) To survive, hospitals and clinics are working hard to provide more successful outcomes; to position themselves for competitive distinction and brand strength in order to have an advantage in the race to merge, acquire or consolidate.

However, some hospitals and clinics are successfully boosting quality, gaining share, increasing revenues and growing profitably.

We found that the most successful healthcare organizations have all taken a similar tack: Integrating strategic marketing with operations to the point they are one and the same. That's because marketing's research and insights provide operations with critical strategies on where to play in the marketplace, then how to win in that space.

This conclusion is based on our extensive meta-analysis of research including that from leading category consultants such as Deloitte and PricewaterhouseCoopers, healthcare journals and conference presentations, books from Cleveland Clinic and Mayo Clinic, and others. We also conducted one-on-one interviews and surveys of marketing executives both within and outside healthcare.

Four findings in particular were especially compelling.

ONE) Integrating marketing with operations has the potential to produce multiple benefits simultaneously, including cost savings, efficiencies, improved performance, attracting patients and employees and increased revenue.

For example:
• Marketing analysis reveals that nationwide, health systems spend more than $1 billion a year palliating oral pain and dental issues with expensive emergency room care. By starting their own dental clinics and preventing disease, systems are curbing emergency room visits while also identifying and managing populations at risk for diabetes and heart disease—both complicated by poor dental health. And as if these benefits aren't enough, they also come with new revenues from providing dental services.
• A classic marketing strategy to boost revenue without additional expense is "more throughput" at the same location. Enabled by lean methods and healthcare-specific scheduling software, clinics are finding that not only do revenues and efficiencies go up, so do patient satisfaction ratings. Less waiting has value to time-starved customers. It can create preference for the clinic and decrease price sensitivity, too.

TWO) A matrix long-proven in other categories to mastermind growth strategies can be a game-changer when applied to healthcare.

When charting the marketing and innovation strategies discovered in our research, we realized they fell into the quadrants of a matrix where the horizontal axis ranges from current to new customers; and the vertical axis ranges from existing product and service offerings to innovative new ones.

When sharing the matrix with healthcare executives, we were surprised to find it was a new concept to many of them. Yet they immediately could grasp the degree to which it could help them concept and organize strategies with a portfolio approach—choosing incremental ones for their low-risk and
short-term impact, and the higher risk strategies precisely because of their transformational potential.

Examples from each quadrant of the matrix include:

Market penetration: Selling more of one's existing offerings to existing customers.
This focuses on low-risk strategies like identifying new uses for existing products and services, and getting current users to buy more. A great example is Geinsinger's bundling of services around patients and their families to prevent and manage disease and promote healthy behaviors. Branded "Proven Health Navigator," it's another great example of the multiplier effect of marketing integrated with operations. Not only has it helped grow revenues, it lowered both costs and admissions.

This quadrant's efforts are the purview of fresh thinking about what you already have to "sell." The key is to market them with 12 practices newly vetted to drive preference, sales, share, margin and brand strength. A sampling includes:
• Over indexing share of voice to one's share of market. (It's practically guaranteed to drive growth.)
• Allocating 60% of a marketing budget for long-term brand-building; 40% to activating behaviors in the short term.
• Favoring creative campaigns. Not only was their originality proven to be more engaging and thus more media efficient, they're also now proven to drive hard business results better than communications judged to be less stimulating.

Market development: Selling existing product and service offerings to new markets.
This quadrant focuses on identifying and leveraging new market segments, new distribution channels and new geographic territories. Some examples:
• New and unregulated fee-for-service programs that help children and adolescents manage their weight.
• Taking clinic space used only weekdays and renting it out nights and weekends for sleep clinics, psychologists serving school children with learning disabilities and nutritionists coaching working adults on their diets.
• Systems branding and licensing their current methods to non-competitors, like Johns Hopkins does with their "Hospital at Home Program" which again resulted in multiple benefits, like improving patient outcomes while lowering healthcare costs and having the potential to provide new revenue streams from additional services.

Innovative product and service development: Marketing new offerings to existing customers. Examples include:
• Line extensions. For example, not just marketing in-person consults but electronic or telephonic ones, too.
• Tiered quality levels, like Massachusetts General's concierge service that offers round-the-clock, priority access to your doctor for what's essentially a premium-priced retainer.
• Entirely new product and service offerings like complementary medicine, behavioral health clinics, cosmetic surgery and financing elective procedures.

Of course, a hospital or clinic can also promote these new offerings to new customers and new markets, too. That's the focus of the last quadrant.

Transformational diversification:
Our research found dozens of hospitals and clinics disproving the presumption that this quadrant is the most difficult to tackle. Instead, they're actively marketing innovative new products and services they concept themselves, develop through joint ventures or acquire by investing in startups.

Each approach is often in service to vertical integration. Deloitte argues that it's necessary just to remain viable in healthcare today.

Whatever the new offering, customer segment or market place, it will have to be insightful and ingenious. Our research found healthcare systems are no longer competing only against each other. They're competing against companies like Apple, Google, AT&T, Ford and IBM. All of them excel at innovation and are investing heavily in consumer-facing healthcare products and services.

In fact, PwC reports: "Nearly one in two consumers said they would choose new options for more than a dozen common medical procedures, such as using an at-home kit to diagnose strep throat or having chemotherapy administered at home. This simple shift in the market threatens at least $64 billion of traditional provider revenue."

In light of this, our next finding should not surprise:

THREE) Many healthcare systems (large and small) understand that playing it safe has never been riskier.

It's why they're aggressively recruiting new hires from categories with a tradition of cutting-edge innovation and marketing science. They're appointing Chief Innovation Officers and creating dedicated "disruption" teams.

It was impressive to find the number of institutions feverishly working to create a culture of innovation: Brigham and Women's Hospital has an annual hackathon where diverse, multidisciplinary groups pitch problems impacting care, developing solutions over a two-day period. University of Texas Medical Branch has created a "medical makerspace" where nurses and doctors can build ideas into prototypes. Others stage "Shark Tank" type contests to inspire and reward employees for ideas that simultaneously drive quality, efficiency and competitive advantage.

And "simultaneously" is the operative word here because everyone in the vortex of today's healthcare storm knows that time is of the essence. But not everyone realizes...

FOUR) Everyone's performance goal is now to improve faster than peers.

Any hospital or clinic system that doesn't get good at multiple things simultaneously will be at increased odds of shutting down or being acquired.

This means the storm is really not about how good a system gets at population health, efficiencies, attracting nurses and physicians, capturing share, new revenue generation, profitable growth and brand strength. Rather, it's about how fast one makes significant strides to get good at them all at the same time.

And that's precisely the genius of integrating marketing and operations: As our research found over and over again, when marketing strategy is integrated into operations, a healthcare organization's performance is greatly enhanced, and results can be multiplied, amplified, accelerated. Since the storm facing healthcare is not going to subside any time soon, the time to integrate is not next month or next week or tomorrow. It's right now.

Marsha Lindsay is Chief Strategist for Growth, Brand and Innovation at Lindsay, Stone & Briggs. Her firm specializes in the successful positioning, launch and accelerated growth of brands and their innovations and was recently named by Ad Age as a Small Agency of the Year for their thought leadership, creative prowess and marketing effectiveness. Client's her firm has served include Tampa General Hospital, SSM Health, Marshfield Clinic, Delta Dental, GE Healthcare, Exact Sciences and Forward Health.

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

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