Health Economics 101: Own the Cost Transparency Conversation
With so much of the healthcare industry in flux, providers are increasingly looking for the next sure thing on which to place their bets. Recently I contributed to a Holmes Report article, “2015 PR Trend Forecast: Healthcare,” where Paul Holmes noted five big trends in healthcare for the coming year.
- Health economics – “Healthcare will be increasingly influenced, if not dominated, by discussions surrounding cost and value.”
- Consumers in control – “The trend of consumers taking charge of their healthcare is going to accelerate.”
- A bolder approach to digital – “The health industry in North America, though regulated and risk averse, has started to embrace many of the techniques that consumer marketers have deployed for the past decade.”
- More integration – “Whether via a consumer’s desktop, laptop, tablet or smart phone, message, content matters more than ever.”
- The impact of technology – “The increasing convergence between healthcare and technology, particularly in the context of mobile and wearables, is a fast growing area that will increasingly start to take a share of voice in the health communications field.”
Over the next few weeks, I’ll be doing a deeper dive on each one of these trends, offering my prediction and strategies for healthcare executives to prepare their organizations and get ahead of the market.
Let’s start with health economics. Don’t worry, I’ll keep the acronyms light – less ACO, PCMH, or CMS and more good, old-fashioned dollars and cents. Because when we talk about health economics today, that’s what people mean. In a time of relative scarcity, everyone is trying to keep what they have and maybe get a little bigger piece of the pie. To do that, most have to give up a little bit of control.
My prediction for 2015 is that it will be the year that transparency finally moves mainstream in healthcare – for both cost and quality. While some organizations are on their way to embracing transparency, especially in the quality arena, most providers have put up a strong line of resistance. In 2015, organizations that can’t meet the transparency demands of consumers will be left behind as patients flock to retail competitors like CVS and Walmart, who talk about cost in a very real and concrete way, so patients know what they’re getting, and how much it will cost. Even insurance companies are embracing transparency. Blue Cross Blue Shield of North Carolina just launched its online comparison tool, which allows consumers to compare the cost of common procedures at hospitals and other healthcare providers. Then there’s the hospital universe. For many years, healthcare providers have gotten a pass and been able to hide behind the “it’s complicated” line. Those days are over.
Yet at the same time, it’s tricky.
Despite terms like “value” and “affordable” being used by nearly every party in healthcare, there is little consensus around exactly what it means or how to achieve it. To some, value means low cost. To others it means quality. And to others it’s the intersection of cost and quality. You can see this clash play out in so many relationships within the industry. What’s affordable to the employer buying the benefit plan and the consumer who is now responsible for paying more of those benefits may be very different. And what is high-value to a hospital may not be high-value to a physician and certainly not to a payer. It goes without saying – it really is complicated.
From a communications standpoint, the challenge is around owning the space early. We advise clients to meet this challenge by setting themselves apart as the market leader. Whether it’s talking to employers, patients or payors, organizations that can clearly articulate their value proposition, back it up with quality and cost data, and make it easy for consumers to understand will get ahead in 2015.
So what can you do? Well, start somewhere. You don’t have to transform your organization overnight, but you have to start the conversation. Whether it’s just defining your value proposition, developing messages around cost and quality, or really taking a leading role in the market by having conversations about cost with patients – it’s all a step in the right direction.
Next up… Are consumers in control? In an age of information, do consumers have enough information and know what to do with that information to be in control?