What Where They Thinking?

The last couple of weeks have been interesting in the world of hospital marketing. It was one of those what were they thinking moments.

Let me set the stage. A new hospital opens in Bolingbrook, Illinois. It has been under construction for two years and is the first new greenfield hospital in 25 years. Looks like a major PR opportunity but no. The marketing consisted of some billboards without any mention of location, one full page advertisement, and one direct mail piece. Most of which happened during that two years before the hospital opens. Now that's useful.

So what do they do, open the hospital, a couple of newspaper stories and a billboard way off the expressway and a radio commercial. Build it and they will come mentality. Guess what? People are not coming. So for the last couple of weeks high on top of the hospital, the Adventist's and yes its Adventist Bolingbrook Hospital puts a giant black sign with white letters saying "NOW OPEN". Oh, I bet that will draw the patients. What were they thinking? Hey it works in retail, it will work for us? What is next a grand re-opening? Me thinks they are having trouble attracting docs to admit patients.

There I go again thinking that docs hold the patient admittance keys.

Thankfully, the sign finally came down.

Just another great example of what people in the hospital industry don't know about brand, marketing or even common sense.

A word of advice to the Adventist Health System in Winter Park, FL. You all have $2 billion in cash in the bank, the Midwest region pulls down nearly $500 million annually after expenses, spend some of that cash and do it right. But its going to cost you a whole lot more now because you have already lost the market opportunity.

I should have taken a picture and posted it. On second thought, I am sure they finally became embarrassed enough.

>>> What Where They Thinking? >>>

New Beginnings in Healthcare

Its been a short while since I have posted. The main reason being the wealth of new knowledge and lessons learned at the American College of Healthcare Executives, 75th Annual Congress on Healthcare Leadership. The theme of this years Congress was Redefining Healthcare. Much to ponder from new insights and understandings.

An under-current of thought at the Congress was the sense that healthcare is undergoing some fundamental restructuring. No, not the kind that really addresses the underlying systemic process and care issues, not the "medicalized" social issues like the estimated 47 million men, women and children without health insurance, nor the crisis in Medicare solvency. The kind of change that over a generation will have a basic and fundamental shift based on the transparency of quality and data reporting.

Where we were

Healthcare in general for far too long, has been mired in secrecy and arrogance. No data releases, no voluntary reporting of adverse events, little effort to report how well a hospital does what it does. It is what is is, but that is really beginning to change. And I call the change the Age of Quality Transparency. An evolution of sorts.

Real Change is Generational in Nature

Looking at the past, it appears that healthcare in every generation has gone through a fundamental change. In the sixties, it was the age of insurance - employer and based private, the introduction of Medicare and Medicaid which had profound effects little understood or anticipated. Hill-Burton grants for construction and modern healthcare as we know it was born. Explosive growth little control and we will do things to you and take care of you. You take this pill, have this surgery, do this rehab.

Like parents talking to children, the industry took care of us.

In the 80s and 90s, the introduction of DRGs, managed competition, managed care, HMOs, PPOs, POS and the list goes on. Control of rising costs by attempts to limit utilization and place more burden of cost on the patient. A big change was the introduction of the concept of personal responsibility for your health. Wellness programs became an effort to change lifestyle. A change that is generational in nature for which we are all finally starting to see it pay-off.

Most cost control efforts are still in place today, but have done little in restricting choice and limiting payment having no effect on the continued unabated rise in the cost of healthcare. A failed attempt at meaningful reform and a single government payer system as proposed by the Clinton's in the 90s only added to the dilemma.

Today, HSAs, MSA, higher co-pays, employers dropping coverage and reports that healthcare will top the $4 trillion mark in a few short years. A new call for national health insurance. What we never had until the past few years is the spoken realization that quality pays, individuals have the right to know and that informed decision making based on measured performance against a peer group or nationally recognized care standards is fundamental to controlling utilization and cost.

Medicare will no longer pay for what they consider to be never events. Amazing when you think about it that we as an industry were paid for preventable errors.

Where are we headed?

To the brave new world of price and quality performance data reporting. Informed decision making based on information that is available, free and transparent. Dashboards, report cards, comparisons, call them what you will but it is data reporting none-the-less. This is not a fad, only the beginning of change. Consumers, government and employers being able to make informed choices. Asking a hospital or other provider what there prices are and getting a clean and understandable answer.

Will there be excesses, yes. Its happening already with healthcare organizations using Thompson, Healthgrades, Press Ganey, PRC reports and other reporting companies as evidence that they are better than the competition. Run an advertisement! Yep, that will sure do it. Unfortunately, the use of that medium to report data is not creative in the least and does a disservice to consumers and others, leaving it to the hyperbole of advertising claims.

I do think a clearing house is needed for all of us to sort through the claims, unless of course hospitals and other providers can shift to a more meaningful approach to transparency and quality data reporting than what we are now seeing. It's not about the ad. It's not about the newsletters. It's about doing the right thing this time before other tell the industry how to do it.

>>> New Beginnings in Healthcare >>>

Accountability, Responsibility and Change

$1.5 Trillion and Counting


A couple of weeks ago, Health Affairs reported that healthcare spending increased by $750 billion to $1.5 trillion. It was also predicted that by 2017 healthcare spending would increase to $4 trillion. Okay, can anybody without giggling too hard really admit that they can comprehend and understand exactly what $4 trillion means? Monopoly money... it has no meaning except for those that can figure out how to be part of that spending. Hospitals, health systems, medical device manufacturers, pharma, physicians, associations etc., all looking at what piece of the pie is theirs. The economist's know what that means. So what else are we to spend our money on?

Well, that kind of spending is unsustainable and will force concrete action to fix a broken healthcare system. Just what that will look like is any ones guess at this time. Don't fix it and we will have rationing, long waits and a national healthcare system where no one is cared for. And a dollar that so far south of the Euro that it will never come back. Government has enough trouble running Medicare and Medicaid now, what in good gosh almighty makes anyone think they can run a national healthcare system.

A bet and forecast for my money..... Like Chicago politics, once everyone figures out how they get theirs, healthcare reform will happen. Everybody wins except for the consumer......


Medicare Rates Are Cut!


Scream the headlines and the hospital administrators, national leaders decry the action. OK, what does it really mean. First, Medicare is not being cut. Second, it is still growing. Third,what was cut was the rate at which Medicare is growing. And fourth, it is just not the rate healthcare people want. How about instead of crying for what we don't have find ways to be more efficient and productive, reduce medical errors, promote standards of care and become more self sufficient and less whinny.


Having been outside of the hospital part of the healthcare industry now for a couple of years and reading and watching, I never realized how whinny hospital execs are. We are expecting someone else to fix our problems. Maybe its time as healthcare executives we stepped up to plate, reached consensus on a strategy and drove some real national policy agenda and change. Instead we are reactive and acting surprised when someone steps with a solution on issues that we should be leading and then we react with the why it will not work, not the why it will. Oh wait, if we did that we couldn't complain much anymore. No wonder no one takes the healthcare industry seriously. I am sure this really endures me to the industry.


IT Anyone?


Expensive... needed.... and the right thing to do. EMR, e-prescribng, RHOIs (which may be dead anyway) and a whole host of issues besides the technical ones. Seems to me to be the cost of doing business. We all agree that government wants IT, doctors and hospitals want IT, employers want IT from providers and national healthcare leadership want IT and the AHA wants government to pay for IT. Sorry, there I go again not being part of the solution but adding to the let someone else pay for what I need to do for my organization from a cost of doing business perspective.

My simple question is, so why is the government expected to provide the cash to hospitals, health systems and others to move to computerization? Money for IT might just be available if every hospital in the US didn't have to provide every service, piece of new technology, improved efficiency and productivity, reduced medical errors and improved customer satisfaction.

In the end....

These are not simple problems and do not have simple answers. I have made light and poked fun, and I am sure irritated a bunch of people along the way. But at the end of the day, unless we can come together, use a little common sense and ask what is right for all instead of what's in it for me, we could solve these problems. Maybe that's what Senator Obama has figured out, the American people have figured out and we are just waiting for everybody else to catch up.

>>> Accountability, Responsibility and Change >>>

HIPAA and the Press

The Chicago Bears, Brian Urlacher and HIPAA

No, this is not a joke. It has been most interesting reading sports columnists and broadcasters lament to a great common chorus that no one knows about the extent of Urlacher’s injury and his neck surgery. The Bears aren’t talking, the doctors aren’t talking and nobody else is talking. It is as if some serious plot has developed to keep the real story from the media. Hogwash…..

As a 20 year healthcare executive life changed a few years ago when HIPAA became the law of the land. Simply put, if an individual does not want anything released about their medical condition, treatment, so forth and so on, that was that. No press leaks, no briefings from the Bears, no info from the hospital, doctor’s or anybody else. The federal government has clamped down really hard on the privacy issue and this falls into that. Urlacher is the only person, who can make the decision on who does or does not receive any information about his medical condition or treatments. Who he designates as being able to receive information is prohibited from releasing any content. If you want to know you have to speak to Urlacher.

What you simply have here is that he decided not to allow for the release of medical information. The Bears won’t say anything, the hospital won’t say anything, and the doctors won’t say anything. Why, simply put they are prohibited by Federal law. Big fines, imprisonment, law-suits, malpractice judgments and loss of professional license will result if found violating HIPPA. That’s all it is, nothing more than that.

Gone are the days when tips would be called in. Staff will get fired for that. As a healthcare marketing executive, HIPAA makes life a lot easier for me and not having to deal with the press. Privacy is privacy and the law make no distinction whether you are Joe average or a superstar. Everybody is this same. It does make the media job harder.

So everyone please stop with the grand conspiracy theories and keeping things quite because the Bears don’t want others to know. It’s all about privacy and his wanting some. Everybody is pulling the media chain, you guys give free press and the Bears and NFL are laughing all the way to the bank.

Frankly, as a Bears PSL and season ticket holder, at this point could care less. They will be bad next year and the year after that. I have no confidence in an arrogant coaching and administrative staff, that can’t change and adapt to different situations. They are self delusional in thinking that and believing that they are better than they are. Their window slammed shut and is closed tight for at least another three years.

>>> HIPAA and the Press >>>

Competiton in healthcare? Now that's an oxymoron.

A most interesting column appeared in the Tuesday, January 29, 2008 Wall Street Journal "The GOPs Prescription for Health Care", by Grace-Marie Turner. A good read and provides valuable information. Ms. Turner is the president of the Galen Institute and editor of "Empowering Health Care Consumers through Tax Reform", University of Michigan Press, 1999.

But and this is a big but, the premise of empowering consumers is that competition in the marketplace will fix the healthcare ills of the US faces some serious questions. On the face of it potentially true. In most markets competition drives down cost, improves quality and diversity of choice.

Healthcare does not operate as a true free-market competitive environment. It is more complex than the private health insurance, workplace, choice debate. The fundamental problem with the healthcare landscape is that until the very basics of regulatory reform are made to impact and make it a true competitive environment, all the tax reforms, HSAs, etc., will not alter the current crisis.

Right now, tax exempt healthcare organizations through Federal and State regulation and Certificate of Need laws, are able to charge higher prices, form cartels to legally block competitors from expanding services or even entering the marketplace and collude. That does not describe a competitive environment. That sounds like a Justice Department probe for anti-competitive behavior, collusion in the marketplace to fix prices etc. We don't accept that behavior in other industries why do we accept that in healthcare?

I am sure that when the explosive growth of healthcare started motives where high, community good meant something and community leaders were trying to do the right thing at the right time. Today's world is fundamentally different that the 60s, 70s, 80s, or even the 90s. Strong bold regulatory action is needed first.

Unless fundamental restructuring of the tenets of the competitive healthcare market takes place, reform under the various proposals are not possible, unless it is universal and single payer. And heaven help us if we go there.

Healthcare market regulatory reform is something that neither party nor the candidates are addressing, except in some of the best political speak that I have seen in years.

>>> Competiton in healthcare? Now that's an oxymoron. >>>

The more things change, the more they stay the same

Economy

With the economy nearing recession it is a safe bet all the talk about healthcare reform and national health insurance will slow down. People want jobs and economic security. That debate is beginning to overshadow everything. Politicians are like a 3 year old child's short attention span and they focus on the flavor of the day. Until someone comes up with that private government combo plan for reform, its dead in the water. Look for incremental change that tinkers around the edges but fails to address underlying systemic issue. If real change is going to come it will have to come from employers large and small. As the old saying goes....Money talks and ........, well you know the rest.

Hospital margins

We all know that hospital margins for the most part have been showing signs of improvement the last couple of years. With the growth in spending in Medicare and Medicaid, and CMS realizing its out of control faster than they even thought, reductions are in the works. That will pace more pressure on margins. Also, hospitals have done very well thank you very much, in the past few years with their investment strategies which has supported margin growth. With the current state of the financial markets, some will take a financial bath. Look for losses especially with the stand-alones going forward. Higher interest rates for bond issues as well because of the sub-prime market meltdown, lower margins etc. As layoffs become more prevalent in the general job market more uninsured will be seeking care further increasing bad debt and adding to margin compression. Oh wait, my bad, bad debt is really community benefit as they like to say.

Mergers and Acquisitions

One would predict that merger activity will increase this year and for the foreseeable future with the economy the way it is becoming. The Justice Department will be looking very closely at these transactions. I have yet to see one where healthcare costs were reduced, duplicate services eliminated and big time leverage was gained for increased reimbursement from payers. Doesn't mean that it doesn't happen, I just haven't seen it.

Error rates

Nearly 100,000 people die every year from preventable medical errors. That's like crashing a fully loaded 747-400 every 1.5 days. Now we all know its unacceptable so why do we continue to allow that that in healthcare? Some payers and the government are going to stop paying for never events. A good start in the right direction. The jury is still out on whether or not P4P programs work. Mess with the medical communities money and you will see how fast the error rate and deaths associated with it goes down. Cynical yes, but true never-the-less.

Have a good week everyone and thanks for reading. Have some news or ideas just send them to themichalejgroup@aol.com All will be treated confidently and anonymity assured.

>>> The more things change, the more they stay the same >>>

Quick Hits and Other Notes

Happy New Year everyone.

Jan, 1, 2008 and another year starts anew.

Check out the poll on Certificate of Need.

Quality Ads

Been seeing a lot of hospital quality ads lately. HealthGrade ratings are out touting we are the best. How many people out there really understand that hospitals and health systems have to pay a lot of money to use the HealthGrade logo and rankings? Not many I expect. Five stars, four stars etc, kind of like choosing from a menu at a restaurant. Wish my doctor had admitting privileges at all those hospitals, then we could pick and choose where to go. Like that is going to happen. I'd rather have info about medication and surgical error rate and malpractice suit results, physician qualifications and satisfaction rates.

Hospital Ad Wars

Always fun to watch hospital dueling in the marketplace with ads. Especially in a two hospital town. Lots of ad dollars and the only ones that profit are the local papers and radio stations. The ads are silly, cover nothing, have no call to action and look the same. My doctor and I make the decision of where to go based on my insurance, what's needed and the hospital she prefers to practice at. Humm..... there I go again thinking that doctors and managed care plans are the ones driving where to go, not hospital advertising. Gee, think they might want to work on customer service and improve how they treat people?

New Hospital Opening
Illinois newest greenfield hospital was to open December, 2007. Rumor now has it that it will open on January 14, 2007, over 5 weeks late. Last one was built and opened over 25 years ago.

How are they marketing leading up to the opening? Poorly at best. It is typical of the old build it mentality and they shall come. What an opportunity passed by. I live in the community and little marketing is taking place. Arrogant and Imperial. Each time I go to work and drive past the place its as dark and quite as could be.

I know lets do a some silly billboards with no call to action or even showing where the hospital is, no radio, one direct mail piece and one newspaper ad. Yep, that will sure draw attention. Think that maybe after spending $160 million plus to build it that it would take a little more than that to raise awareness. A couple of weeks to go and a big thud in the market.

That's it for today. Happy New Year everyone

>>> Quick Hits and Other Notes >>>