Over the past few years, healthcare was the economy's outlier growth industry. Housing collapsed, manufacturing was depressed and financial services got manic—but in healthcare, the good times rolled on. Now those bon temps may no longer rouler. Powerful political and economic interests have aligned to create a tectonic shift that squeezes healthcare costs—and changes healthcare marketing—with enough force to alter practices forever.
Congress set the stage by passing the 2010 Patient Protection and Affordable Care Act (Obamacare, if you prefer). One creation of Obamacare, Accountable Care Organizations (ACOs), are designed to replace Medicare's inefficient pay-for-service reimbursement system with a pay-for-performance approach to reward coordinated patient care and measure results. In an ACO, diverse providers coordinate patient care regimens to save money and produce quality outcomes. Hospitals, physician practices and insurers across the country are scrambling to form ACOs.
Whether or not Obamacare survives in court, payors will ensure that the cost-control squeeze intensifies—even for life-threatening conditions. In a recent study, Aetna insurance realized 35% lower average costs over 12 months for patients with non-small-cell lung cancer when oncologists used evidence-based care, a difference attributed to lower costs for chemotherapy medications. Look for further such initiatives by big health insurance players.
How will a shift to pay-for-performance affect healthcare marketers?
Pharma companies have enjoyed the success that direct-to-consumer advertising and direct-to-physician marketing produce, especially for new products. Medical device makers now deploy such marketing strategies for their technology-driven blockbusters. The AMA, FDA and managed care organizations have wrestled with the cost implications of these marketing practices, generally concluding that it's a mixed bag: consumer demand can lead to over-prescribing, driving up costs—but increased medical condition awareness can also lead to better compliance, driving down costs. If this perspective shifts to a singular focus on pay-for-performance, that nuanced view changes. It becomes all about comparative data, minimizing consumer choice. Pharma and device companies could find that many products that add marginal benefit for marginal (or more) added cost will not be reimbursed, no matter how good the marketing campaign.
In the more fragmented world of provider marketing, similar dynamics may take hold. Most hospitals now try standard differentiation strategies, typically promoting superstar docs, patient success stories or service lines. With ACOs, those strategies could change, as organizations try to differentiate themselves based on results, with comparative data easily accessible.
Where does this lead? A shift to patient education is one option. Campaigns that acknowledge the product's place in a coordinated care regimen could address cost and efficacy. Provider campaigns that educate consumers on hospital system access and patient experience could be useful, especially if 35 million or so newly insured candidates enter the system. But blind expectation that the status quo will endure is not an option. Healthcare cost trends are unsustainable, and shifts in the healthcare system are inevitable. Savvy marketers will pay heed and join the debate to have a say in their own professional destinies.