Heathcare is Bulit for a Tie

Score Tied and No Extra Innings
Ever think about it? Healthcare is built for a tie. Throughout the industry no one can ever get a competitive leg up. We all have the same managed care contracts, similar programs and services, even our docs go to a group of hospitals. So, in a commodity market environment, which healthcare is, and price is becoming king, how can anyone expect anything less than a tie? You can not be a clear winner, you can not dominate your market, you can not keep out new entrants. Okay, maybe for a short while but not indefinitely. Tie score, 7-7, "same ol same ol" across organizations and it may not change anytime soon. We all do the same things.

Breaking the tie
The only way you can break a tie is with your people. That's right, your employees. They make the difference and set you apart from the field. In a zero sum game where the truth be told, no one can really define service and quality, people make the difference. That is what doctors and patients will remember. That is how you can gain an advantage, that is part of the road to prosperity as an organization. Train them and get them into the community with presentations.

And oh by the way, there should not be a single presentation that anyone gives from the CEO on down that is over six slides. If you can't deliver a presentation in 4-6 slides, then you do not know what you are talking about. Stop the show up and throw up approach to information. People aren't stupid, they can read and that is exactly what they do when you put miles of information with 60 slides in a presentation. They read and don't listen, so why did you even bother giving a presentation? When you do that, then 80 percent of the presentation is about you, and only 20 percent about your audience. Think they really want to hear how great you think you are?

Employees satisfaction is one part of the puzzle to breaking the tie
Still think employee satisfaction isn't important or is only relegated to a bi-annual survey? Think again. The healthcare industry is built for a tie and if you want passionate committed employees and physicians, then you really need to treat them better. Otherwise, its a tie.

And ties aren't a lot of fun.

>>> Heathcare is Bulit for a Tie >>>

Strategy vs Tactical Marketing

Stewart vs. Cramer

First this message. If you did not see the Jon Stewart's interview of Mad Money Jim Cramer from CNBC on Comedy Central Daily Show, you really need to see what everyone is talking about. I actually felt sorry for Cramer, but hey, CNBC needs to get its act together and figure out what their responsibility is in financial reporting. Yea for the little guy! Thanks Jon.

http://blog.indecisionforever.com/2009/03/13/jon-stewart-and-jim-cramer-the-extended-daily-show-interview/

Now back to the regularly scheduled program........

Hospital Advertising, my favorite subject

Seeing an increase in hospital advertising. Once again, it’s not clear what people are attempting to accomplish. That's because the strategic essence of marketing is missing.

Look, anybody can create an ad.

Anybody can hear the CEO, run out, spend some money and throw it up against the wall to see what sticks. How is your advertising supporting the business objectives? What is your brand message? Is a billboard on a busy expressway where people zip along at 65 miles an hour really that memorable? How about a call to action? What does your brand stand for and how is that supported by advertising? Do you even know what your brand is?

Please stop insulting consumers with promises of "World Class Healthcare". Unless you are Mayo, The Cleveland Clinic, John Hopkins etc, you don't have a world class healthcare offering.

Maybe you have missed the headlines and stories, but the US has the most expensive healthcare in the world, with some pretty dismal outcomes. There is nothing about a community hospital that is world-class. Unless you have people coming from around the world for care; not a believable message for me. And that goes for a lot of consumers too.

Really now. No awards like The Top 100 Hospitals, US News and World Reports ranking, Malcolm Baldridge Quality Award or even a JD Powers Patient Satisfaction award, how can you say with a straight face that your healthcare is world-class?

With that kind of marketing coming from agencies and marketing departments, this is what makes it so difficult to get people to understand the true nature of marketing. It is all about the marketing strategy. And there is a great gaping hole lacking some serious marketing strategy.

Figure out the right strategy first, then the rest comes easy.

>>> Strategy vs Tactical Marketing >>>

Billions and Billions and Billions......

$150 billion dollars for healthcare in the stimulus bill, $19 billion of which is for IT. Think everyone is trying to figure out how they get theirs? And I don't mean the hospitals and IDNs. I figure McKesson and Cerner are well on their way, including a host of other niche players (small and large) healthcare IT providers trying to figure out (as if they haven't already) what's in it for them.


With all the different systems and no common standards will this turn into a really more expensive version of the Betamax vs VHS video tape format wars from the mid 1980s with that ancient technology of VCR?


Now the budget contains another $600 billion plus for healthcare reform. All told, this totals in excess of $700 billion. Just the first down payment for fixing the system folks. I bet the AHA and AMA are busy figuring out how much they can get without having to change anything.


Like I said in previous blogs, its all about politics. Obama being a veteran of Chicago politics, knows that when he figured out how everybody gets theirs, reform happens. It has to happen. It is going to be expensive.


Now for all you CEOs out there who think they can hold on for a couple more years and things will go back to the way they were, hold on for the ride. If we can come up with a European style healthcare system- maybe. If we have the Great Britain Universal Healthcare System- here comes rationing and long waits.


To all those hospital marketing departments out there, here is a clue for future activity regardless of the system. Americans hate to wait in lines. So, your job is to figure out who can pay privately to not wait in queues for service. That's the nugget.

Why? Think about what happens when you suddenly increase demand and all those hospital beds that have been taken out of service. Combine that with a primary care physician shortage and lack of RNs, you get the idea.


Anything else and you have to hire me as a consultant.


Cheers........

>>> Billions and Billions and Billions...... >>>

Have you looked at your CGM lately?

CGM, sounds like a disease. Well, it can be. It can be unknown. It can be helpful. It can be harmful. It can be your best friend or your worse enemy. Do you even know what it is?

Is your marketing department aware of CGM? Can they even tell you what this means?

Simply put if you do not know what CGM means you and your hospital, physician practices, or any healthcare setting is at risk.

CGM means Consumer Generated Media. It means that in the age of the Internet, disgruntled patients, unhappy employees, media, anybody- can write about their experiences, post photos, interview and show to the world how good or bad you are.

Anyone with a computer and Internet connection can create CGM. Won't matter if what is written is true or false. The world does not care. But those who read it will believe it.

Scroll through this blog and you will find plenty of examples of CGM: Silver Cross Hospital; Agfa Healthcare; Adventist; State of Illinois; etc.

Look at: Comcastmustdie.com; Ihatedell.net; Technorati.com; Youtube.com; MrConsumer.com, all examples of CGM. And it could be you tomorrow.

If you don’t know what your consumers are saying about you, or what your competition is saying for that matter, you are losing control of your brand.

You operate in a virtual marketplace.
Consumers know more than about you than you realize.

You lose in a CGM fast-break. Disgruntled patient or discharged employee creates Consumer Generated Media. CGM is picked up by media- print and electronic. You won’t even know what hit you. You lose control of your brand and message.

Welcome to the age where customers are the new paparazzi.

>>> Have you looked at your CGM lately? >>>

Employee Satisfaction + Service Excellence = Customer Evangelists

The Crisis

Faced with a well documented financial meltdown, the global consequences and a deep national recession, how can a hospital or system CEO keep the doors open and the lights on?

The answer is simple, yet complex and difficult to carry out. Few try and most of those that do fail.

Think about this for a moment, there is little if any differentiation in the healthcare marketplace. Hospitals on average look the same. They provide the same services, have the same managed contracts contract and even have similar medical staffs. Patient satisfaction runs in the 80th – 90th percentile satisfied. Looks like an industry that is very close to becoming a commodity which will eventually compete on price alone.

The hospital CEO, medical business leader, managing partner, vice president, director or manger needs to be creating customer evangelists to not just survive, but grow and thrive in this and any future environment.

The answer: Customer Evangelists!

A customer evangelist is an individual, who has such an outstanding service experience that they freely become your positive spokesperson in the community. They are not paid. They have no financial sake in your survival, but have come to believe so completely in what you do, they drive business to you. This happens because you have highly satisfied employees that provide exemplary, detailed, person-focused service.

Notice I did not say patient or customer satisfaction. Anyone can have good and even high patient satisfaction scores, and that my friend is the fix you are in- high satisfaction scores do not for one minute translate into customer evangelists. Don’t stop measuring satisfaction; you have to for a variety of reasons. I say focus on creating customer evangelists and the scores will be fine.

The tile of the post says it all Employee Satisfaction + Service Excellence = Customer Evangelists. From now on, my posts are going to focus on this topic. I will be talking about creating an environment that results in highly satisfied employees and putting processes and systems in place to be able to provide outstanding customer service to create customer evangelists. It is an unassailable position in the market. Do you want to be a market leader in healthcare? Do you want to grow and not merely hang on? Do you want the best doctors on your medical staff? Then create customer evangelists.

Some notes and comments:

RSNA starts in Chicago this week. Stop by the Agfa Healthcare booth. They do have the finest PACS I have ever seen and had the privilege to market. Agfa has had a tough couple of years with the never ending restructuring and global leadership changes, but if you are going to RSNA at McCormick Place, take the time to learn about their IMPAX PACS, you won’t be sorry.

Retail Clinics:

I would like to clarify a couple of things about my blog on retail clinics. I do understand them very well. Yes, it is a model that has the potential to lessen some of the waiting and service problems experienced in healthcare delivery, but they are not the answer.

I go to a physician who does not have a NP or PA. My kid’s did see a PA but that was under direct supervision of a physician. The retail clinics popping up are not and let me be very clear about this, not under the direct supervision of a physician. And yes there is a quality of care difference between those PAs and NPs under direct supervision of a doctor and those not. Most of these companies creating these clinics do not even have a medical director, so please, let us not place them on par with physician treatment when they have trouble keeping up with changing standards of care and all that counts is the bottom-line.

As to the accreditation argument, accreditation means that the organization has meet the minimum acceptable standards of the organization that is conferring accreditation. You don’t get points or any other kind of awards for going above and beyond those standards. You paid your fee. Maybe there was an on-site survey. If you passed and few fail, you received a certificate and can say you’re accredited. It is a piece of paper that does not guarantee anything.

>>> Employee Satisfaction + Service Excellence = Customer Evangelists >>>

Financial meltdown, recession, mergers, affiliations, uninsured and retail clinics

With the financial market meltdown, worldwide recession I say look for new mergers and closings in the hospital industry. Even though many are profitable, well at least slightly, that will go by the way side with investment income losses, higher numbers of uninsured, rising bad debt and lengthening delays in Medicaid payments from the states, the picture is bleak. Declining utilization and tighter reimbursement from managed care doesn’t help either. Oh yea, those pesky retail clinics won’t help either. I am surprised more hospitals don’t go that route, partner with their doctors and drive those babies out of their markets.

Insuring the 45 million and growing uninsured is not in the cards fore the foreseeable future, not till 2010 at the earliest. President-elect Obama has his hands full. First priority is fixing the financial system, second is the economy, and third is healthcare. Without the first two, the third never happens.

Hospitals are cutting back, but it is in marketing as always. CEOs never did understand the value of marketing and what it can do, but then why do we need to be customer focused? Part of that blame goes to marketers who are unable to prove value; focus on the fluff stuff; and not holding themselves accountable for a bottom-line result. Could be too many newsletters, ads touting services people don’t need or want and not positioning on a quality and service perspective.

Answer this…. if you can’t say in 25 words or less about how you are different from everyone else, then you are adrift in your marketplace and your key customers can’t either. But then your competitors are in the same boat and they just may be as clueless as you are. Define and differentiate before someone else does it for you...

The hospital industry is undifferentiated and it’s becoming a commodity. Focus on satisfaction- employee and patient. You won’t have satisfied patients without satisfied employees. More to follow latter on that one

By the way I am hearing some not so flattering reports about the quality of primary care in those retail clinic settings. Wrong diagnoses, medication errors and faulty in site quick tests make we wonder how soon before the government step in and regulates. More direct physician oversight, certification and training are needed to prevent someone from dying. Hasn’t happened yet but it will. It’s just a matter of time. If you have a good or bad story about the retail clinics post it up.

The company I work for is going through a major reengineering. Look for big and I mean big reductions at the coporate staff level first quarter 09. Lots of uncessary layers and they could really benefit from a dose of lean management. Probably means I will be out of a job. Oh well, here we go again, that will be the seventh time in eight years. I have the nack for finding those companies.

>>> Financial meltdown, recession, mergers, affiliations, uninsured and retail clinics >>>

Been busy and P4P

Its been a long time since I posted. Much has been happening in healthcare, but frankly, family has been at the forefront of my life. My daughter plays fast-pitch travel softball, so know you know the rest of the story. Weekend tourney's, lots of practices and games. No national bids this year but it was a lot of fun. Try-outs last weekend for 12U, start again and she's playing fall ball. Left-hander, pitches and plays first base and outfield. Pretty good from Dad's point of view....

Now back to the issues....

P4P, Patient Satisfaction and my read on what you need to do Mr. Hospital CEO......

Attempts at payment system reform to stem rising healthcare costs by controlling access and utilization through various insurance programs and market based reforms- PPOs, HMOs, MSAs and HSAs to name a few, have meet with limited success. With projected healthcare spending to potentially exceed $4.1 trillion by 2016[1], Pay-for-Performance (P4P) represents a potential mechanism to reign in unsustainable healthcare spending growth.

Pay-for-Performance, commonly referred to as P4P, is a concept whereby hospitals, health systems, physicians and other medical providers are incentivized along agreed upon quality standards for specific procedures. In return, they receive increased reimbursement rates based on meeting defined quality standards of which patient satisfaction is one of the critical performance measures.

The short historical background of the P4P movement begins in[2]:

1991, the National Committee for Quality Assurance (NCQA) with the introduction of the Health Plan Employer Data and Information Set (HEDIS)
2001, the Institute of Medicine proposes that quality-based incentive payments to healthcare providers can improve quality
2002, the Center for Medicare and Medicaid Services (CMS) launches its pay-for-performance plan based on 10 quality measures, and in conjunction with the Agency for Healthcare Research and Quality (AHRQ), develops and introduces HCAHPS
2003, Medicare Prescription Drug, Improvement and Modernization Act of 2003, hospitals reporting quality data in 2004 receive enhanced payments in 2005
2003, CMS and Premier launch the Premier Hospital Quality Incentive Demonstration Project (HQID)
2004, employer-based groups entered the P4P debate with the concept of “Care-Focused Purchasing” using quality standards based on medical evidence
2005, the Joint Commission and the American Medical Association begin to more heavily weigh into the debate

Underlying all is the concept that patient satisfaction is a key value-based decision driver patients can use to make reasonable purchasing evaluations when seeking treatment, as well as positively affecting patient compliance and adherence. Organizations demonstrating the ability to consistently deliver high levels of satisfaction will improve their quality outcomes and be rewarded accordingly through higher reimbursements.

The Patient Satisfaction Imperative

Satisfied patients[3]:

Are more compliant with treatment regimens
Even if the medical outcome is not good, believes that he or she had a quality medical experience.
Recommend you to others
Return to you for care
Litigate less

Highly satisfied patients are a source of continued revenue, cost avoidance and positive community image. A culture of satisfaction is one of the major focuses of the institution. Lead by senior executives, satisfaction is measured, evaluated and defined as an organizational imperative[4]. In a P4P environment where a portion of the hospitals reimbursement is at risk by not achieving required quality standards, the institutionalization of patient satisfaction processes, measurements and departmental change capabilities targeting benchmark performance can result in additional revenue. This enhanced revenue possibility could potentially be the difference between growth, expansion and continued mission, or an uncertain future that hospital leadership has little ability to control.

Taking Advantage of Pay-for-Performance

Understand that P4P is a risk-taking proposition requiring dedicated resources, measurement capabilities and access to proven quality improvement techniques and systems. The hospital or health system that applies the following principles established through years of research and market success can take a step forward confidentially thriving in a P4P environment. Some of the key programmatic elements for a successful venture into P4P include:


Robust survey
Rigorous measurement and analysis
Willingness to focus on change
Access to current thought-leaders, case studies and white papers
Peer group comparisons and the ability to network
Gain-sharing with physicians, employees and vendors
Vendor risk sharing and support


Conclusion

Pay-for-Performance represents a significant opportunity in the age of data transparency to improve quality, reduce costs and improve outcomes. Leadership’s action supported by proven expertise can allow for the taking of calculated, defined risks necessary to capitalize on payments for achieving high levels of patient satisfaction. As consumer-directed health becomes more relevant and employers continue to shift the cost of care to employees, high levels of patient satisfaction will be one of the determinants of reimbursement, exclusive agreements, expansion and market share growth.

[1] John A. Poisal, Christopher Truffer, Shelia Smith, Andrea Sisko, Cathy Cowan, Sean Keehan, Bridget Dickensheets, The National Health Expenditures Account Team, “Health Care Spending Projections Through 2016: Modest Changes Obscure Part D’s Impact”, Health Affairs, March/April 2007, (26) 242-253.
[2] White Paper, Plexis Health Systems, Inc., “Pay for Performance: Improving Quality and Efficiency of Healthcare Delivery”, 2008, 1-4.
[3] Ralph Bell, PhD, Michael J, Krivich, CHE, “How to Use Patient Satisfaction Data to Improve Healthcare Quality”, ASQ, January 2000, 6 -7.
[4] Michael J. Krivich, FACHE, PCM, “Only Sixty-eight Percent Satisfied” Healthcare Matters Blog, April 2008, www.michael-healthcarematters.blogspot.com

© 2008, Michael J. Krivich, FACHE, PCM. All rights reserved.

>>> Been busy and P4P >>>