Don’t think cash-paying consumers are relevant to your organization’s revenues? Then, keep reading…
The pandemic is changing the math for revenues. There are 53 million Americans who have lost their jobs. Of those, a third will get insurance through another family member’s job and a quarter will have coverage through a Medicaid program (see COVID-19 Recession: Preliminary Estimates Using Microsimulation and Eligibility For ACA Health Coverage Following Job Loss). The remainder will be paying more in cash—10% will be eligible for marketplace subsidies for plans with high deductibles and the remaining 30+% will likely be uninsured.
And with this pandemic-induced shift, knowing what consumers want, how they want to access services, and how they value services will be even more important to keeping a robust customer base. If we look at ‘retail’ giants, what are the models? I boil it down to the one-stop shop (like Costco) or the at-my-fingertips purchase (like Amazon).
Have you ever gone into Costco for that big pack of toilet paper (and I don’t mean just in the past 4 to 5 months) and come out an hour later with things you had no idea you needed—two giant bottles of the latest rage in vitamins (apparently it’s turmeric), socks, books, nuts, a massive tub of hummus, enough rotisserie chicken to feed an army, a vacuum cleaner, solar panels for your rooftop, and perhaps an armoire…And grabbed the famous $1.50 hot dog and soda on the way out? All because the price was right, the display was enticing, you know you can trust them to only stock the best, and the checkout lines moved fast. The revolution in retail that Costco started 37 years ago continues to gain momentum with the classic concepts—eliminate the middleman, pass the savings to the customer, commit to the highest quality products, offer one-stop shopping (I’ve heard you can get everything from a diamond ring to a coffin!), and make it all a great experience.
Then there is Amazon—24/7 shopping, anything from anywhere, 1-click ordering, and sometimes even same day delivery. And the ratings and reviews are a huge help. I’ve never found a customer service number to call on Amazon, or even one of those online chats, but the point is that you never need to talk to someone. The whole experience of buying, tracking, returning, complaining if you have to, and getting refunds is easy, intuitive, and quick. And they haven’t stopped innovating and diversifying. From books to every product under the sun to their own delivery fleets to streaming to making their own movies. To deliver a great hybrid experience, they most recently opened a store in a mall where they exclusively sell products rated with four or more stars by customers online (see New Amazon 4-Star Store Opens in Westfield Montgomery). Any guesses on what might be next?
Many health care provider organizations are repositioning for a more consumer-directed, cash-paying landscape. Just a few recent examples include:
- Walgreens To Open Up To 700 In-Store Primary Care Clinics In $1 Billion Deal With VillageMD
- Walmart Announces Opening Of Walmart Health In Arkansas Adding To Its ‘Healthcare Supercenters’
- Heal Launches New ‘Health Assurance’ Offering
- Doctor On Demand & Humana Launch Virtual Primary Care Plan
- Hims & Hers Expands Into Virtual Mental Health Services
- Talkspace Launching Nationwide Psychiatry Service With Prescription Option
So, how do you position your organization to participate in the shift in the market to more cash-paying consumers?
First, consumers need to know what your organization has to offer—and why it is their ‘best choice.” And they’re looking for you online. Nearly half (49%) of consumers begin their search for a health care provider organization by researching conditions and diseases, according to Google. After about two weeks of research they are likely to book an appointment (and mostly likely to do that online). So if you’re not appearing in their Google searches, Instagram, Facebook, and other channels, they are not going to find you. And once they find you, you need to “convert” them immediately and bring them in the door (see Are You Where Your Consumers Are? Being Social On Social Media and How Much, & How, Should You Spend On Marketing Right Now?).
Second, it needs to be easy for consumers to use your services. Going retail is only going to succeed if you can offer easy-to-use online or telephone appointment scheduling and quick access to services with on-demand on-line services or face-to-face appointments within a few days (even walk-ins). Add to that the ability to connect immediately (via text or chat) with customer service staff, easy bill pay, anytime access to health records, and more. And, you need to offer a great experience to consumers from the waiting room (whether virtual or on-site) to the final report or invoice. For most organizations, this means enhancing the user interfaces with technologies. Without a great technology infrastructure, it is hard to provide the convenience that consumers now expect.
Third and perhaps most important, is price transparency and fixed prices. Consumers want to know exactly what the service is going to cost, whether their insurance will cover it and exactly how much it will cover, and any payment terms including credit cards or extended payments. With that information, they will make their own decisions about “value”—which is an uneven combination of the cost, convenience, reputation, professionals, location, and more. Walmart publishes their fee schedule on their website and offers online appointment scheduling but also takes walk-ins. Talkspace has a package fee schedule for a range of options—unlimited messaging therapy, couples therapy, teens therapy, insomnia therapy, psychiatry sessions, and “a la carte” live video sessions.
Going retail is a big strategic decision. You will need a strong go-to-market strategy backed by research, multiple scenario forecasts, and financial projections, as well as a robust virtual marketing plan. You have to do due diligence as you would with any service line development. And you may even need to consider new partnerships and collaborations. But, I would argue that preparing to be competitive in the retail market makes an organization more competitive in the health plan market too.
For more on how best to compete for cash-paying consumers, check out these resource in The OPEN MINDS Industry Library:
- Ready To Collect More Cash?
- Exactly How Can Consumers Read This?
- Consumers Know What They Need. Do We?
- Considering Cash—& Consumerism—In Service Line Planning
- How Much, & How, Should You Spend On Marketing Right Now?
- Ready For The Digital Health Revolution? Note: It’s Not Just Telehealth
- The Amazons Of Health Care
- Why Specialty Provider Organizations Should Care About Customer Experience
- 5 Reasons Why ‘Consumerism’ Must Be Part Of Your Strategy
- The Age Of Priceline Health Care
And for even more, join us virtually for The 2020 OPEN MINDS Management Best Practices Institute, August 24–26. In the session Virtual Health: How To Expand Access & Build A Seamless Consumer Experience (August 24 at 2:30 pm EDT), three executives will discuss how their organizations are leveraging technology to create personalized experiences that help consumers find and access the right care at the right time and right place. Diego Garza, vice president of strategy and innovation and director of telehealth at MindPath Care Centers; George Kolodner, M.D., founder and medical director at Kolmac Outpatient Recovery; and Shawn Brooks, executive director of special projects at Centerstone will share best practices for incorporating virtual care into your “brick and mortar” organization. And in the session Open Forum On Portfolio Management & Service Line Development For Sustainability (August 25 at 3:45 pm EDT), three chief executive officers—Mark Mishek of Hazelden Betty Ford, Luanne Welch of Easterseals UCP North Carolina and Virginia, Patrick Maynard of I Am Boundless—will discuss how they are planning for post-crisis sustainability with new services to meet evolving market needs.