Top Seven Health Industry Trends of '07

We have one of our first looks at what is bound to be a year of polarizing strategy shifts in health care. According to PricewaterhouseCoopers' survey just released yesterday, consumers will continue their charge for transparency and regulation in 2007. What is striking about the findings is something survey leader Davin Chin, MD, pointed out:

"Our survey...found a disconnect between what the American people, policy makers and industry think is wrong with our nation's health system and how to fix it. It appears that consumers may not appreciate the complexity of healthcare as a business, and therefore the industry's messages about itself and the challenges it faces are failing to resonate in the court of public opinion. This disconnect must be addressed before real progress can occur."

Then it points out this boggling statistic:

"Nine out of ten Americans (90 percent) believe that greed is a major reason that U.S. healthcare costs are rising, a greater number than those citing drug prices, care for the uninsured, business inefficiencies or malpractice costs."

As a public relations professional, that number astounds me. It signifies a chasm that at this point seems unbridgeable. It makes me question what messages are being communicated, how well they are being received and who is receiving them. That's Communications Theory 101, and apparently it's where we must return to re-connect the health care industry with our consumers.

The article summary is intriguing; the full report is available in PDF:
http://sev.prnewswire.com/health-care-hospitals/20061130/NYTH02830112006-1.html

PricewaterhouseCoopers Identifies Top Seven Health Industry Trends of '07
Predicts Tipping Point for HSAs, Pressure on Pharmaceutical Pricing and More State Action

PricewaterhouseCoopers has identified the following as the top seven trends in the health industries for 2007, based on its work with leading employers, policymakers, associations, advocacy groups and organizations across the health industries, including hospitals, health systems, physician groups, government and commercial health insurers, pharmaceutical companies and life sciences firms:

1. States Take the Initiative: In the presence of federal gridlock, states are taking the lead on divisive issues such as stem cell research, health insurance coverage for the uninsured and oversight of advertising and promotion by pharmaceutical companies. Responding to local social and fiscal concerns, states are developing innovative insurance programs, forming public-private partnerships to spur innovation and passing legislation to drive greater accountability and transparency from hospitals, physicians and pharmaceutical manufacturers. According to PwC, such state-led initiatives will likely expand in 2007, but the risk is a patchwork quilt of local programs and regulations.

2. Transparency Could be Revealing: The demand for transparency around pricing, quality measures, safety standards and community benefit is being driven by and is supportive of consumer-directed healthcare and pay-for-performance. In 2007, the health industries will focus on becoming more transparent, but government, insurers and employers need to educate consumers about the availability and use of such information. Providers will need to dedicate more resources to reporting, a strategic issue that can no longer be delegated down in the organization.

3. Time to Walk the Talk on Technology: Developing a digital backbone to support electronic health records, interoperability and transparency is a national priority, but the public mandate is unclear and the industry is struggling with the cost and return on the investment. According to PwC's research, nearly one-quarter (24 percent) of Americans don't yet believe that having an electronic health record will improve the quality of healthcare, and four in ten consumers (42 percent) are unsure. Progress will take an investment of resources from the government and/or the private sector.

4. Consumers Take the Wheel: The shift toward consumer-driven healthcare as a way to control costs will continue, but the year ahead will be the tipping point for HDHPs and HSAs. Insurers, employers, and to some extent the government have been proceeding in favor of consumer-directed health plans in the absence of strong support from the consumers themselves and from strong data on the results of such changes in benefits. PwC's consumer research found that only one in seven Americans (17 percent) surveyed by PwC thinks that increased cost-sharing is a "very important" way to reduce healthcare costs. With a critical mass of people now enrolled in these plans, 2007 will be the year to see whether they really have results to offer, and for consumers to weigh in on what they think of them.

5. Price Check for Pharmaceuticals: Forty-two blockbuster drugs will lose their patents in 2007, opening the door to generic equivalents and potentially creating an enormous loss of revenue for brand name pharmaceutical manufacturers. PwC's consumer survey indicates that the public is quite aware of and sensitive to drug prices, perhaps due to relatively high cost sharing and price transparency of pharmaceuticals, relative to other health services. Nearly three quarters (72 percent) of consumers surveyed said they would be willing to take a generic versus brand--name prescription drug. According to PwC, drug pricing will come under continued pressure from generics, and pharmaceutical companies will have to develop innovative pricing strategies to compete.

6. Obesity is the New Smoking: First smoking, now weight. There is a culture shift around healthy eating sweeping the United States, as evidenced by the number of fast food chains cutting out transfats and U.S. companies introducing health and wellness programs. Two-thirds of U.S. adults are overweight, and obesity's impact on chronic health problems is stirring healthcare organizations and employers to aggressively promote weight loss. Public attitudes have yet to catch up: While three in five Americans (61 percent) believe health insurance should cost more for smokers, only 40 percent believe it should cost more for those who are overweight because of poor lifestyle habits. In 2007, expect public health campaigns to push the envelope on obesity through wellness programs and financial incentives to lead healthier lifestyles.

7. Small is Big: The competitive landscape will change as healthcare gets smaller, more focused and patient friendly under consumer-directed healthcare. Physicians and hospitals are now competing with retailers, several of whom have announced plans to open mini-health clinics within their walls. Consumers like the idea: Four in ten people surveyed by PwC (42 percent) said they would seek non-emergency care from a retail health clinic. In addition, large general hospitals are seeing competition from increasing numbers of smaller, specialty hospitals, surgery centers and outpatient clinics, the result of regulatory action overturning the specialty hospital ban. There already are 130 specialty hospitals in operation and more under construction, predominantly in the South and West.

Hospital comparison Web sites aren't helping; how do we help ourselves?

Miami Herald health care writer John Dorschner's October 29, 2006 column described the difficulties consumers are having when trying to decipher hospital quality measures from comparison Web sites. It indirectly helps make the case for why hospitals ought to be the ones posting this data, not just third parties.

FROM THE ARTICLE >>

"...The hope is that bringing market transparency to healthcare will drive business to the providers that deliver the best care at the lowest price, reducing costs and improving outcomes.

The reality, at least for the moment, is murkier.

Hospital executives dispute the accuracy and meaning of the data, and few consumers are using the information. Even boosters of the transparency movement -- who include government officials, insurance companies and business owners fighting spiraling healthcare costs -- say that what's now available is often confusing and perhaps useless."

(FULL TEXT >> http://www.miami.com/mld/miamiherald/business/15873434.htm)

From this statement, it is logical to conclude that posting the data is meaningless without wrapping it in consumer-friendly packaging. Just because we're dealing with tons of raw data doesn't mean we can ignore the basic tenets of Web design that make the user experience successful -- intuitive navigation, graphic appeal, logical content groupings, et al.

MORE >>

"Much healthcare information remains hidden, particularly about problem doctors, mistakes in hospitals and the industry's bizarre pricing system. Still, a stunning array of information on hospitals is now available."

So we are making progress in the quantity of data that is posted, but we still have major issues with how to present it.

FINALLY >>

"The hospitals involved say these numbers are misleading. But for many business and political leaders -- from Republican Newt Gingrich to Democrat Hillary Rodham Clinton -- this information is key to changing America's healthcare system and reducing soaring costs by allowing consumers to shop for healthcare the way they shop for other goods and services."

Even more of a reason for hospitals to take charge and post the data ourselves! Let's use the data within our own contexts to tell consumers why we are delivering the best care. Don't let consumers rely solely on click-intensive third-party comparison sites. Let's extend marketing strategy to the Web, and tell our own stories in our own words!

In this way, health care organizations can learn from the example of school districts. In Texas, for example, an interested patron can log on to a third-party site like the Texas Education Agency (http://www.tea.state.tx.us/perfreport/aeis/2006/index.html) and view a comprehensive data set regarding any of the state's 1,300 school districts — helpful, but an incomplete picture of a district's performance. Instead of relying on that, many districts take the time to post test scores and other performance data on their own sites. They complement the data with explanations of meaning.

The Convergence of Transparency and Health Care Web Sites

• Health Care Transparency
• Pricing Information
• Quality Measures
• The Web

Q: What do these things have in common?
A: They are finally converging as a result of the new consumer-driven health care wave. It is a trend that is gaining momentum, and one that cannot be ignored. When the masses have ultimately spoken, legislators may be the ones who mandate what and how much to post online regarding pricing information and quality measures. At that point, some organizations will emerge as leaders and patient advocates, while others will resist with all their power, destroying every last ounce of their goodwill.

This blog is devoted entirely to discussing best practices and principles that are driving health care organizations' Web strategies — specifically, issues relating to transparency and the posting of quality measures/pricing information.

At this point, there remain more questions than answers:

1. What can hospitals hope to gain by adopting Web transparency policies early?
2. How many hospitals are posting this information already?
3. Who ultimately benefits from making this information available?
4. Why are hospitals traditionally resistant to transparency?
5. Who will be the real winners and losers once consumer-driven health care takes hold?
6. Are there any resources for hospitals that are starting from square one?