By Joe Grace, partner, Chief Outsiders.
While pharma companies have grown to become effective direct-to-consumer (DTC) marketers, hospital systems and other large providers continue to struggle with effective DTC marketing essential for growth. In fact, it’s their Achilles heel. Why?
First, providers have never needed to compete historically. With light competition and reasonable levels of reimbursement for decades, everything was fine until the cost of health care began to spiral out of control. In response, payors began to push back by negotiating lower levels of reimbursement in-network. In addition, payers, including CMS, have denied claims creating losses and cash flow issues for many providers.
There is also a rapid rise of chronic conditions ranging from arthritis to diabetes to dementia. These chronic conditions are expensive to treat for health care providers. They are an even greater challenge to treat profitably in an environment of declining reimbursements.
At the same time, advances in medical treatment and care have extended life spans and placed additional burdens on our health care system, including the extraordinary cost of heroic and end-of-life care.
To help offset rising costs and declining reimbursements, large scale providers need more new patients to cover fixed costs. As a result, most of these providers have added DTC marketing to the mix. This usually takes the form of a website, some SEM and a little local advertising. Unfortunately, many any of these marketing tactics are often random acts of marketing without the marketing insights and strategy required to efficiently compete and effectively reach their target audience.