Market Assessment: Finding out what customers want
Market assessment and strategic planning. It's
surprising, but few medical providers ask their referral sources
if they are meeting their needs. New centers are built and launched
without ever involving future users. Basically, healthcare providers
skip step one—market research.
Marketing 101: Ask the customer what he or she wants. Prizm
starts a development project by meeting with managed care and large
employers. By involving them in the beginning, the center can be engineered
from the ground up to be extremely attractive to large referral sources.
As a first step in developing a strategic business plan, Prizm always
meets one-on-one with managed care contracting directors and medical
directors; large employer benefit managers; work comp insurance carriers;
and medical referral sources. These meetings identify the competitors
in the market and how they are perceived by referral sources and opinion
leaders. This competitor overview reveals:
- How competitors are currently positioned
- If there is an opportunity to develop a new center of excellence
- How this center should be customized to meet the specific
needs of the market
- What contracts are available and under what reimbursement
mechanism, e.g., discounted fee for service, global price packages,
capitation, etc.
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More importantly, this interview process involves the customer and
referral source in the design stage, enabling them to lend useful insight
into how the center of excellence may be customized to meet their needs.
Within a market assessment, Prizm outlines how
current providers in the local area are perceived, what the desirable
components of an "ideal" back
treatment center are and what the interest level is with a proposed
center that would include the sponsoring physicians. The feedback can
influence how the spine center would be developed. The final report
includes proforma revenue projections for the center of excellence
and strategic recommendations that improve the likelihood of success.
Collect data that documents superior value.
You MUST collect clinical outcome data at intake
and follow-up intervals that document patient severity as well
as show positive changes in patient status. That data will enable
your clinic to defend itself against critics who label your clinic
as expensive. Your mean patient charge may be high compared to
competitors, but in many cases it will be that way because you
are dealing with the train wrecks, rather than creampuff virgin
backs. Additionally, these data collection tools can audit patient
satisfaction after visiting the clinic.
The database software used by Prizm, for example, is relational, which
enables Prizm to merge charge databases from the group practice or
hospital with demographic data and clinical outcome data. The result
is reports that can show the mean cost to treat various ICD-9 categories
in your group practice. This information can also be used for global
price packaging with managed care.
Pricing Strategies
Develop global "packages" that are attractive to employers
and managed care.
Most physician groups fail with managed care because they take an
adversarial rather than cooperative position.
What managed care wants is documented value and predictability. A
spine center can deliver better care and at a better price than other
fragmented providers who provide care that goes nowhere.
By packaging fragmented services, a clinic can lend cost predictability
to employers and managed care organizations. A case rate can include
physician office fees, diagnostics like X-rays, MRI and CT, injection
therapy, surgery, operating room charges, inpatient hospital stay,
and post surgical rehabilitation at a therapy center. In the past,
you billed by CPT code, but in the future, you may bill by ICD9.
Prizm has done the statistical analysis of mean cost by ICD9 of various
symptom paths, and has in turn developed clinical protocols that enables
a spine center to provide a predictable price for a four week episode
of care. This predictability is highly attractive to payors who are
frustrated with the fragmented and unpredictable nature of spine care.
In addition to successfully contracting with large entities like Blue
Cross with global prices for NON-surgical aspects of spine care, Prizm
has successfully contracted with managed care entities for surgical
procedures. All these strategies position the spine center as an ally
to managed care rather than an adversary.
Promotion Strategies
Position yourself as the expert source for information.
Your group must stand out as the expert source for information in
your specialty. For example, for its centers, Prizm develops all the
marketing communication tools that are necessary to achieve the strategic
goals of the center of excellence, including but not limited to the
following:
- Brochures
- Internet electronic brochure/web site
- Educational inserts, home remedy inserts, exercise inserts, etc.
- Print ad campaign
- Radio ad campaign
- Direct mail campaigns
Develop communication tools that make the prospect a more-informed
customer.
You need to invest in educational consumer information tools, including
home remedies and self-diagnostic aids, that position you close to
the consumer. These consumer information tools can also be distributed
through employer audiences to align your group with local businesses.
Develop databases that track prospect, customer and referral source
information.
Relationship marketing is the buzzword of the 1990s. The intent is
to track information on existing prospects, customers and sources of
new business. To do so, you need database tracking systems that reveal
return-on-investment, which prospects convert to customers, and which
referral sources send business and how much.
Audit customer and referral source satisfaction.
Lastly, your center needs to focus in on customer satisfaction measurement,
and assessing and meeting the ongoing needs of referral sources like
other physicians, managed care and employers. We hope this quick formula
guide is helpful in getting a framework for success for your center.
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