This week's Colleague to Colleague talks with Suzanne Houck, president of Houck & Associates, which provides training and consulting to healthcare providers and vendors. She can be reached at 1820 Hawthorn Ave., Suite 240, Boulder, CO 80304. 303-443 -9597; FAX 303-415-1486.
Q: Lately, it seems, the providers of healthcare _ primarily doctors and hospitals _ are fighting back against the growing power of managed care organizations by forming Integrated Healthcare Networks (IHNs), also called Integrated Delivery Networks (IDNs). How will this affect marketers?
A: It's not clear whether it's a case of "if you can't lick 'em, join 'em," or of "if you can't join 'em, lick 'em."
Formed to strengthen their members' clout in negotiating managed care contracts, such IHNs are seeing dramatic growth in ever more and broader geographic areas, and sometimes even embrace health plans.
The rapidly growing buying clout of IHNs is having a major influence on healthcare marketers. For many companies, continued success, even survival will hinge on innovative sales and marketing strategies, as well as product repositioning to meet the needs of these networks. A business as usual, traditional marketing strategy with IHNs is a recipe for disaster.
Q: What do marketers need to know in order for them to tailor their plans?
A: To market successfully to integrated networks, it is first necessary to understand what defines them, why they are spreading so rapidly, how they are structured, and their strengths and needs.
IHNs consist of hospitals, physicians, other outpatient providers, and sometimes health insurance plans -- that unite to provide healthcare for a broader geographic area. They're often formed to strengthen members' clout in negotiating managed care contracts. The majority of IHNs are vertically integrated to include different functional areas - i.e. physicians, hospitals, other outpatient services and sometimes an insurance plan. Kaiser Permanente Health Plan and Group Health of Puget Sound are two of the earliest vertically integrated IHNs.
Q:How do your sell to IHNs?
A: As IHNs evolve, the healthcare marketer's strategies must keep pace. Just promoting features and benefits won't work in a consolidating system where efficiency is king. Successful sales and marketing must vary with each phase of IHN development. Personal relationships with clinicians are vital. Successful selling also often means focusing on a product's technological superiority. Price is much less important because providers can still pass most costs on to insurers or patients.
Marketers should be aware that providers may fixate on lowest price at the expense of technology or even total cost. Stories abound about sales lost at the last minute because a competitor came in with a lower price. Selling during this phase is much more unstable, largely because turnover is high in provider organizations.
For this reason, it's imperative for marketers to develop more than one internal champion within a provider organization. Today's internal champion may be tomorrow's ex-employee.
Q: Do you have to reinvent the marketing "wheel"?
A: Yes and no. Using historical marketing strategies with sophisticated IHNs is a recipe for disaster. Fewer vendors will be selling to fewer customers. To survive and succeed, healthcare companies must quickly reposition themselves around the changing needs of these customers. Just being the quality leader is not longer enough. This means repositioning both products and services to help customers reduce their costs and manage risk.