Due to shifts in healthcare reform and a move toward high-deductible health plans, cost-sharing of healthcare is shifting more into consumers' hands than ever before.
Healthcare pricing has never been tremendously transparent, but now that consumers are assuming more financial responsibility for their care, they are going to greater lengths to understand exactly how their healthcare pricing breaks down. Research conducted by Elena Praeger, Assistant Professor of Strategy at Northwestern University's Kellogg School of Management, found that consumers opt for lower-priced medical services when the price information is clear and coherent. Additionally, as consumers find it harder to find providers within ever-narrowing networks, many more are turning to retail forms of healthcare options that are becoming available, such as CVS’s MinuteClinics or Walgreens clinics with nurse practitioners offering routine exams and more. In these options, a closer tie between retail providers and insurers can offer significant savings to consumers, so healthcare providers and executives must be even more concerted in their marketing strategies to reach these savvier consumers.
Determine Price Sensitivity
So how do C-suite executives and marketing teams go about improving the consumer experience to address price sensitivity?
The Advisory Board recommends three important steps within a given healthcare population:
1. Evaluate. Using available data, examine which populations are most price-sensitive and determine which services evoke greatest concerns about price.
2. Educate. Explaining why a service is needed is important, but so is helping them understand their cost burden, and increases the likelihood that patients will pay.
3. Price shift. Sometimes providers may need to lower fees or offer discounts on services after determining where it will have the greatest impact.
Here's where it's important to explore if your marketing, strategy, and executive teams are all aligned around your existing data.
- Do you know enough about the specific paths your consumers take to care and have the reporting capabilities on the data you do have to understand where your specific audience has price concerns?
- Do you need more data or better integration to really understand the issues?
- Does your healthcare CRM support multi-channel campaigns based on this data to reach and engage your consumers in the moments they're looking for more information around pricing or need their concerns addressed?
- Do you have a strategy to:
- Push consumers toward lower cost facilities than the ER
- Promote preventative medicine to avoid more severe conditions down the line
- Tout lower cost providers to drive volume
- Educate about appropriate follow-ups to avoid costly re-admissions, etc.
Information Gains Beat Lower Price
A 2018 study in Nature that sought to explore how people make decisions about getting regular health check-ups finds that consumer healthcare expenditures are heavily linked to an individual's health status and their sense of certainty (or lack thereof) about their health into the future.
While regular check-ups have proven benefits such as creating mutual trust between patients and physicians, potentially contributing to positive health outcomes and reducing patient anxiety, certain groups of people were still strikingly risk-averse when it came to paying for them: those with health insurance, those who are not married, and those who are lower income or unemployed. However, all groups of people sought to gain information about their health status that could help them lower future risks.
Thus, the study authors recommend that healthcare providers — and of course, executives — reconsider how they price services so as to put an emphasis on prevention as well as invest in campaigns that emphasize benefit gains.
Especially when targeting the more risk-averse groups, the authors recommend focusing on the benefits of a service rather than any perceived health loss or risks. They call this “gain-framed messages" — so focusing on what will be gained by regularly examining your health, versus what will be lost or risked if you don't.
Additionally, the authors recommend that policymakers emphasize “the value of information" through targeted ad campaigns — whether this is greater awareness of a given disease, or the importance of making timely and appropriate follow-ups to reduce the likelihood of expensive re-admissions.
While today's consumers are more sensitive to healthcare prices, they may also more open to data-backed marketing strategies, powered by your healthcare CRM, that illustrate how your organization can improve their health.
Want more insight into how a healthcare CRM can deliver more value for your organization and your consumers? Download our Definitive Guide to Healthcare CRM.