The Affordable Care Act: Early Signs of What's Ahead

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The changing landscape of healthcare means marketers will be looking for new ways of communicating with patients. Interviews by AdNation News reveal a picture of a healthcare industry that is far more segmented than the trend would imply; as a result, marketing efforts will be increasingly targeted towards potential patients and employee groups.

We want to be paid on quality and outcome, not on volume.

Next year, millions of Americans will likely enter the health insurance system through state-based exchanges created under the Affordable Care Act (ACA). The changing landscape of healthcare means marketers may find new ways of communicating with patients. Three healthcare marketing professionals spoke with AdNation News this week about how the present and near-future are shaping up.

Interviews by AdNation News reveal a picture of a healthcare industry that is far more segmented. As a result, marketing efforts will be increasingly targeted toward potential patients and employee groups.

Marian Dezelan, Chief Marketing Officer at North Shore LIJ Health System, says that her company is creating its own insurance company, which will pair with its hospitals and care facilities. North Shore is the second-largest, nonprofit, secular healthcare system in the United States. The system encompasses 16 hospitals, as well as other facilities.

"Despite whatever mandates come down at legislative levels, we have already been headed down our own path," Dezelan says of her hospital system. "We've addressed many of the same objectives that the ACA is addressing." North Shore-LIJ 's new insurance company will be known as LIJ Care Connect, which is intended to be on the new exchange that is set to open by October 2013 in New York state (and by January 1, 2014 in all states). "The insurance company and the hospitals will be linked together," she says. Jeff Kraut, Senior Vice President, Strategy & Business Informatics at North Shore, says, "The whole point of this approach is to offer consumers a complete solution that has not been available before. It will integrate the payer and provider function."

Dezelan and Kraut both note that the marketing focus will need to place more emphasis on public education. "The strategic focus for us is lifelong relationships,” Dezelan says. "The model that we're trying to establish is one of an affordable healthcare option. Keeping a patient within a single continuum of care -- this way, we know everything about their health."

Kraut says that unlike some healthcare professionals, he is on-board with the new American healthcare of the ACA, for many reasons. "We want to be paid on quality and outcome, not on volume. We're restructuring our contracts." He says hospitals such as North Shore can profit, but more because of the long-term relationships that come about from mandatory healthcare insurance, not because of high costs.

In fact, according to a PriceWaterhouse Cooper Health Research Institute report out this week, total costs for healthcare services are expected to rise 6.5% in 2014, less than the double-digit increases seen in the early 2000s. Once annual changes to plan offerings are taken into account (such as any increases in deductibles and co-pays), employer healthcare costs are projected to increase an average of 4.5%, according to the report. How those costs are passed onto employee premiums has yet to be seen. The report does predict that there will be little impact on private healthcare costs from the influx, and it acknowledges that individuals covered through the exchanges could face high out-of-pocket costs.

The new reality, says Kraut, is that employers will be giving incentive to their employees to "do the right thing," which primarily means cutting out smoking and eliminating poor dietary habits. "We have to be highly integrated with our doctors, connected to community organizations. As an insurer and provider, it's in my strategic interest to relate to my community."

Wellness is the mantra in other places as well. Susan Dubuque leads the healthcare division of the agency Neathawk, Dubuque & Packet/ Richmond, and has a national reputation as a healthcare marketer. Her clients include Loma Linda University Health in California, Franciscan St. Francis Health in Indiana, and Virginia Commonwealth University Health.

Loma Linda University Health's "entire brand is being recast, based on a wellness-oriented message," Dubuque says. The "Live It" theme will permeate all of their advertising messaging. "From a clinical standpoint, from an educational standpoint, from a research standpoint, their organization is wholly committed to giving people the best chance for longer, healthier lives," she explains.

Marketing for the Franciscan St. Francis Cancer Center, and the VCU Massey Cancer Center, has moved toward an emphasis on survivorship, on the full lives that patients lead after cancer, Dubuque says. "In the past, a major medical center would be 'pounding their chest,' and talking about their expertise," she adds. Now, "we are not only concerned about your medical needs, we are also concerned about your quality of life; the moment you are diagnosed, our focus is on life after cancer," she explains.

Healthcare organizations are beginning to rely on more Customer Relationship Management (CRM) and direct marketing, as opposed to mass-marketing, Dubuque says. "There is a shift in some advertising dollars, from mass-media to CRM," she adds. CRM involves targeting more specific consumers, as opposed to targeting everybody.

Dezelan agrees. "There has been an overreliance on mass marketing,” she says. "We at North Shore are lucky enough to have a CRM we’ve established over the last 10 years." She says that some of the same digital technology that is used to treat patients can be used for marketing messaging as well: Skype, for instance, a video conference technology with which some doctors conduct examinations. Though this channel, and other mobile, tablet-based, and Internet channels, healthcare professionals may not only begin to diagnose their patients; providers may also begin to market to them as well -- all part of the systemic changes coming soon to American healthcare. – Rob Garber

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