What can health systems learn from Blockbuster's collapse?

The advent of online shopping spurred the downfall of traditional retailers that either invested poorly or didn't understand their customers. Blockbuster, for instance, folded in 2010 in part because the company failed to anticipate the demand for streaming and on-demand video services.

Today, a similar scenario is playing out in healthcare.

"Health systems are doing the same things, investing capital and marketing in unoptimized ways and not paying attention to how consumers are evolving," said Bill Stinneford, senior vice president at Buxton. "Ones that can figure that [evolution] out are the ones who will win."

During a March 4 webinar sponsored by Buxton and hosted by Becker's Hospital Review, Mr. Stinneford and Buxton Vice President Nikki Viner explained how healthcare organizations can use consumer data analytics to avoid the same fate as Blockbuster and other traditional organizations that fell behind the curve.

Retail: not just a cautionary tale

While online shopping did shake up the retail industry, some physical retail shops — the ones that adopted integrated, multichannel business models — are still succeeding across the country, Mr. Stinneford said. These winning organizations positioned themselves to meet consumers wherever they shop, whether that's online or in store.

This multichannel approach is essential, given that online shopping accounts for less than 10 percent of total retail sales, a number that's not expected to rise much, according to Statista. Retailers with online-only strategies might be missing customers who don't want to rely on technology or even those who simply don't see the company at the top of their search results.

"It's hard to let people know you're there and who you are when you're only on the web. In retail — and the same is true in outpatient healthcare — sometimes the best marketing vehicle can be the location itself," Mr. Stinneford said.

With good signage and an optimal location, healthcare providers can make an impression on potential patients who drive by on their way to work or while running errands. Those impressions count: the consumer will know the facility is there, think about it when a need arises and seek out that facility's services.

Where retail lessons meet patient data

Leveraging multiple access points is just the first step toward attracting and retaining patient customers. Through each of these channels, organizations must also communicate with potential and existing patients in ways that will resonate most with those individuals.

Effective communication requires understanding the consumer beyond basic demographics, Mr. Stinneford said.

For health systems, understanding the consumer means pinpointing precisely where, how and when existing and potential patients want to receive care. Combined with knowledge about the local market, this kind of data can help organizations make well-founded growth decisions.

Historically, health systems made decisions based on gut feelings and the idea that "if you build it, they'll come," Ms. Viner said. This kind of thinking won't deliver a return on investment in a value-based world.

As healthcare providers begin to focus on not only treating sick patients, but also keeping healthy patients well, considering ease-of-access is essential. The further patients are from a facility, the less likely they are to seek care there, whether in emergency or specialist referral situations.

'Here' is the place to start

Healthcare organizations must identify the point at which the distance to travel for care becomes "too far," as well as what kind of care patients might be seeking, and how they're seeking it, Ms. Viner and Mr. Stinneford emphasized. But there's another element — a simpler one — that health systems should pin down first.

"The best place to start is assessing what you have today," Ms. Viner said. "You can't develop a growth strategy without understanding whether you have an opportunity to grow what you have, or if you should relocate or close existing locations."

If a health system identifies an opportunity to grow into a new market, it will often make the mistake of taking whatever facility is available. According to Ms. Viner, that's a risky investment decision.

Instead, organizations should use complex and bountiful consumer analytics to support whatever access strategy they pursue. Ultimately, this data will help win board approval and make the investment worthwhile.

"One of the first things I learned in retail real estate was don't fall in love with a site unless you have the data to support it as well," Ms. Viner said. "You can't underestimate the importance of that. You've got to have the marriage of data and local market knowledge to make the right site selection."

To view the webinar, click here.

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