In the midst of a mobile healthcare revolution, hospitals pursue 1980s marketing strategy
Did Nero actually fiddle while Rome burned? While perhaps aprocryphal, the saying is meant to invoke an image of someone blissfully disregarding an episode of major change. While the healthcare industry may not be burning, there are certainly major changes afoot. In addition to payment reform, mobile health is accelerating both the consumerism and decenetraliztion of healthcare. So why are health systems still spending the bulk of their marketing and patient engagement dollars on print advertising -- an investment that is singularly weak in helping a health system prepare for the healthcare landscape of the future?
Spudz says "Print rulez!"
According to the Content Marketing Institute, nearly half of healthcare marketers invest in print advertising -- putting their use of print 50% higher than that of the non-healthcare marketer. The report points out that healthcare marketers are two-years behind their peers in other industries when it comes to virtually all aspects of digital engagement. This seems like exactly the wrong time to be behind the curve in digital engagement.
In a previous post, I outlined some of the economics behind hospital marketing. Here's an excerpt from the post:
Hospitals operate in a unique economic environment.
- The market for routine services is hyperlocal and the market for specialty services is largely regional.
- The way service is delivered, including the tools used, is subject to regulatory standards and approvals.
- The end customer (i.e. the patient) is increasingly sensitive to quality, but much less so than in other industries.
- Patients typically pay for about 5-15% of the cost of the services. The government and third party private insurers typically pay for the rest.
- Patients largely direct purchase decisions, which are influenced by a health system's reputation.
- Patients increasingly choose health systems vs. individual doctors.
- Reputation is built through word-of-mouth from other patients and through referrals from primary care physicians and specialists.
A hospital marketer's job is to differentiate the health system from the competition. To do this, they must find a way for the message to cut through the noise and reach the target. This is called positioning. The authors of the marketing classic "Positioning: The Battle for Your Mind" characterize the positioning challenge this way:
"The mind, as a defense against the volume of today's communication, screens and rejects much of the information offered it. ... [Generalities] have become a way of life in our overcommunicated society. Once a mind is made up, it is almost impossible to change. Certainly not with a weak force like advertising."
We live in an era of extreme information overload. As consumers, it is very difficult to cope with this deluge of information without simplifying and categorizing that which is constantly coming at our eyes and ears.
Successful positioning recognizes this and concentrates on the "receiving side" of its marketing messaging. Specifically, it seeks to create a message that can break through the clutter and stick in a person's mind. In communication, as in architecture, less is more. This message must be sufficiently differentiated from that of competitors. Here are some healthcare examples:
"The state's leading cancer center"
"Cardiac and vascular center in partnership with the Cleveland Clinic"
"New robotic surgery center for less-invasive procedures"
Once the positioning is honed, the marketer chooses appropriate advertising vehicles to make people aware of it. Many health systems' marketing stall out at the awareness phase, which is at the beginning of the buying cycle. Some health systems use search engine advertising to capture patients at the other end of the buying cycle. Very few health systems have a program that bridges the awareness-to-purchase continuum. That patch of strategic ground is called engagement. And engagement is where patient loyalty is created.
Without an engagement program, health systems stand to lose much of the value of their advertising investment. Not only is the ad investment lost, but more importantly, the opportunity to drive patient loyalty is lost, which is the goal of the advertising.
How Ads are Priced
There are variety of ways to price advertising, but a common method is based on "impressions". In the print publication world, impressions are typically counted by totalling the number of paid subscribers with the number of people that get the publication at the newsstand. The sum is the "total circulation" for the publication. Each of the people in the total circulation is counted as an impression. Publications then express a price in terms of the cost to make 1,000 impressions. The shorthand for this is CPM (Cost Per M with "M" standing in for 1,000 as a Roman numeral.)
An ad buy within a mid-sized monthly print publication might look like this:
|Units of 1,000 (M)
|Cost for one ad
|Ads per year (i.e. "ad schedule")
|Total ad buy
Each ad vehicle (outdoor, online, etc.) has its own nuances, but the idea behind the pricing is roughly the same. Cost per action ads, like those offered by Google, charge the advertiser every time a user takes an action -- like clicking on an ad. All in, the annual ad spend for a hospital can quickly get into the hundreds of thousands of dollars -- and sometimes much more.
According to the St. Louis Post-Dispatch: "The nonprofit BJC Healthcare system, which operates 13 hospitals in Missouri and Southern Illinois, spent $13.4 million on “advertising and promotion” in 2010, according to two of its IRS Form 990 tax filings."
How Mobile Drives Patient Engagement & Loyalty
For the price of a bi-monthly ad schedule in a regional publication, a health system can maximize the effectiveness of all advertising and promotion. A mobile app is a natural "call-to-action" to download to learn more about virtually any health care campaign message.
From Awareness to Conversion
"Half the money I spend on advertising is wasted; the trouble is I don't know which half."
This famous quote attributed to an early 20th-century retail tycoon cuts to the heart of display advertising's biggest liability: measurement. A call-to-action inserted within the ads establishes something that can be measured: conversion. Mobile apps are a natural complement in this regard. The app download is the first conversion. The next step is to offer the patient utility such as a library of health content that is pre-loaded on the app. Another onboarding feature is to give patients that ability to communicate with the health system. This could take the form of a click-to-call hospital directory or a mechanism by which patients can provide feedback to the health system.
From Conversion to Engagement
Health systems are in the business of healing and wellness. Apps can be powerful tools that drive patient engagement in wellness. Apps give patients the ability to take control of the management of their condition. Consider migraines, a condition that is behind 112 million bedridden days every year. Knowing what triggers migraines, as well as when, where, and how often they occur, is a key to proper treatment and management. Keeping track of that information can be difficult, especially for those suffering from the condition. A phone allows a very simple way to track otherwise unwieldy information. Here's how Axial's app handles migraine management:
Since people have easy access to their phones throughout the day, a well-designed app can be a convenient way for a patient to capture clinically-relevant information about their condition. Migraine management is just one example of a virtually limitless array of health management tools that lend themselves to smartphones. This user-generated health information is expected to be included in Meaningful Use 3.
From Engagement to Loyalty and Word-of-Mouth
True patient loyalty develops once a patient begins to actively manage their health via tools provided by the health system. It becomes solidified when a health system's providers actively use the patient-tracked information as a key input in the care process. From there, word-of-mouth builds courtesy of the "pocket demo". A pocket demo occurs when a user is so enthusiastic about the capability of a mobile app that they happily demonstrate it to colleagues, friends, and family. But isn't a health app different? Do people share informaton about their personal health with friends and family? They do. Cholesterol, migraines, glucose management, and weight loss programs are discussed with frequency. Smart health systems understand this and leverage it. (Read the full post: The The ROI of Patient Loyalty.)
Research show that demand for mobile health is growing, yet just 13% of health systems are planning to offer their patients a branded mobile app this year. For a health system, not having a mobile engagement offering in 2013 may be similar to not having a website in 2003. (Quick fact: more Americans have smartphones in 2013 than had home broadband in 2003.)