If traditional inefficiency makes for digital opportunity, meet the greatest opportunity since Y2K…the US healthcare system.
Econsultancy’s recent roundtable with Ogilvy CommonHealth brought together marketers seeking to transform their industry.
Our healthcare roundtable in New York began with a quick look at the research that Econsultancy is conducting in the sector before moving on to the discussion.
We’re engaged in several healthcare-related studies, including one that’s partly based on interviews with people in the field. If you’re currently working in the healthcare sector and would be open to a short conversation with an Econsultancy researcher, please let us know.
But the main business of the day was to get healthcare marketers talking about the issues they’re facing as they try to get their organizations ready for a digital future that’s already here.
As one attendee summed it up:
We say we’ve got two to ten years depending on what part of the business we’re talking about… it’s not two to ten. Probably not even close.
Consumer advocacy and connected doctors
Healthcare in the United States is a far cry from sectors that have no choice but to respond to customers’ needs.
The B2C mantra of “the consumer is in control” doesn’t describe the healthcare world. But there are cracks forming in the monolith and many expect the pace of change to accelerate.
Attendees described ways in which consumers have started to assert some control and healthcare providers’ habits are changing:
It starts with research. The accessibility of information about healthcare options, products and processes has exploded online. As in other sectors, this has a ripple effect.
People expect a level of information and even debate about drug choice and even treatment options, a fundamental shift from the days of the all-knowing healthcare professional.
This creates an opportunity for marketers to approach product promotion on several fronts. Doctors prescribe, but patients increasingly request.
The other side of the coin, as several attendees agreed, is that direct to providers programs have less impact, although this varies significantly by the type of product/service.
All attendees were acutely aware that wearables will further accelerate change in the market. With an increased emphasis on preventative health that is measured by personal devices, the lines between marketing and service and between personal and public data will be fuzzy and complicated to deal with.
But it’s an exciting future where digital marketers may gain far more access to and interaction with their end users.
For their part, doctors are finally going digital. Electronic record-keeping and spillover from the consumer tech revolution mean that doctors are far more likely to be using tablets, smartphones and laptops.
Unfortunately for marketers, there’s little standardization in the system, leaving them to deal with hundreds of platforms, many of them walled gardens.
Consolidation seems inevitable, especially as insurance organizations insist on the interoperability of patient data to encourage preventative behaviors and pay off on outcomes rather than services.
Resistant to change, but not immune
Change comes to every industry at its own pace. Despite the shifts discussed in consumer behavior, healthcare marketing in the US has been one of the most resistant to change, for several reasons.
The first is regulation, both real and perceived. Codes covering data, social media and other emerging aspects of modern marketing are a significant barrier to innovation.
Driven by legal departments, concerns with regulation keep healthcare marketers shy, and even ignorant of some of the new means and methods of relationship building online. Why climb the learning curve if there’s the perception that it won’t be useful?
As one of our roundtable experts put it:
[Governance is so oppressive in these industries, that] even getting close to the boundaries of what is acceptable or legal can be considered as career threatening.
One innovative solution was brought up by one of the agency side experts. To overcome the lag time in approvals on messaging, a lawyer on the team was brought to a live event, approving what was going out, in the moment.
Another factor is that in many situations, the old ways of doing business still work. Especially in pharmaceuticals, the approach of field reps and samples, sometimes backed by the ‘air cover’ of television and print advertising, can create predictable, positive returns.
The issue is that this naturally lowers the digital priority. Companies ‘know’ they should be getting on top of their digital game, but the need it abstract. They don’t ‘believe’ it as a necessity. It leads to ‘dabbling’ with digital at the fringes of strategy, and that’s dangerous. Regardless of sector, this is a time that should be characterized by aggressive learning, experimentation and innovation.
As one executive from the pharmaceutical industry relayed, “Our SVP put it really simply and powerfully, ‘If you’re not digital marketing, you’re not marketing’ and that left an impression.”
Or as a c-level leader in direct patient services said eloquently, “We need to be thinking about relationships, but even the word ‘marketing’ puts us in the mindset of the past…of push not give and take.”
Fostering more digital organizations
The challenge is that marketing, legal and regulatory groups need to work together to push digital boundaries, and it’s not easy to build consensus or urgency.
Some feel that the real change will only happen as digitally inclined ‘natives’ move into positions throughout the enterprise, but many are trying to change that reality today.
There was common agreement about the need for a more evolved approach to incentives. That marketing today is not usually measured on profitability or on share of business represented by promotional budgets, for example.
Instead, incentives are often misaligned. For example a business unit manager will be driven by growth efficiency in contrast with the marketers tasked with market growth.
Incentives at the personal level also need to be evaluated. If someone is being compensated on a traditional media spend model, they will inevitably find reasons to keep spending, regardless of the inefficiencies.
One solution offered was the use of scenario planning. In this approach, leaders are asked to design both a growth scenario and a scale back scenario. With these in hand and agreed upon, there is preexisting consensus on how to retrench as real world data rolls in.
Given all these factors, it’s not surprising that organizational change is slow. As one pharmaceutical executive admitted “We’re bad at stopping doing the things we have always done.”
A number of tactics were discussed for shifting organizational priorities and structure.
Small steps instead of great leaps
Although the industry often talks of transformation, it can be easier to encourage gradual evolution. Big swings can be highly disruptive, even if they work. If they don’t, it can mean new leadership and a new big swing.
More measured efforts are also easier politically because the budgets are smaller and implications more predictable. It’s also easier on employees because the scale of change is manageable and less mysterious.
In this approach, scenario planning might again be used to surface good ideas in tactical situations (media shifts, reducing budgets, etc.) – this thinking is rewarded and gradually made standard.
According to one healthcare practice lead:
The trick is for everyone to appreciate that change is ongoing. We’ll never be done evolving. If you can instill that mindset, the resistance to change gets less acute. Treat change as an ongoing skill instead of a manager action.
An extension of this is to make more, smaller investments in traditional media and approaches, so as they lose efficiency they can be cut with a less dramatic impact internally.
Between near-term priorities, standard operating procedure and a traditional mindset, it’s not easy to foster innovative thinking in healthcare. But attendees had experience with a number of approaches:
‘Shark tank’ innovation programs with designated budgets. This kind of friendly competition is attractive because the downside is clear and non-threatening. People need to understand that small failures are to be expected, even rewarded for the lessons they bring.
Similarly, pilots can be effective ways of learning and inventing. However, one executive voiced their experience with ‘death by pilot’ where a traditional corporate mindset and culture of not taking risks means that pilots are a convenient place to ‘hide’. They can be pointed to as incubating change, but at the cost of real transformation.
Another valuable lesson from the agency side concerned the propagation of ideas that work: “innovation teams operating often in secret for months have had thousands of hours engaged on the ‘why’ of a change program while tackling the ‘how’.
When the time comes to introduce the organization to the plan, they forget this fact and assume that the ‘why’ is obvious to everyone, when in reality, they need to start the discussion at the point they started at however many months ago.
They then become impatient and patronizing when the organization fails to embrace the change plan with the enthusiasm the team was hoping for.
Econsultancy subscribers interested in how to foster innovation in a B2B environment may want to read The Pursuit of Standard Operating Innovation – Innovation and Value in B2B Marketing.
Successful evolution demands trust
Fear is the enemy of progress, and change can be frightening. A move from a media-heavy model to one that’s more focused on consumer relationships may be exciting to some, but confusing and worrisome to others. Time and again, the need for trust came up in the conversation.
“Trust is the essential component [in change management]” said one attendee, “it’s softer to measure, but it’s absolutely critical. You show wins, you reward small successes and you don’t punish small failures.”
Another noted that “People also have to trust the organization to be smart in how it places its bets. That it’s willing to take chances on pilots when they work – and that measurement was solid from day one.”
Above all, people at all levels need to trust that they won’t manage themselves out of a job by doing things that are right for the company. They need to know that there will be new products and activities to replace those that aren’t working.
Knowledge sharing about digital is a human challenge
Several of our roundtable attendees were specifically tasked with getting digital knowledge out into the organization, and they all agreed that it wasn’t easy.
The often repeated theme was a modern variation on ‘you can lead a horse to water’. Despite real investment and a dedication to collecting and publishing the most useful information, companies continue to see lower usage than they’d like.
One marketer suggested that adoption of anything is a function of incentives, and here again the healthcare industry fails to use the right carrots to entice marketers to take advantage of their knowledge center and stretch their talents.
Another played devil’s advocate, saying that so long as the industry moves slowly, there’s little reason to waste time on digital channels and best practices that are tangential to the budget and measures of performance.
To this point, leaders can set goals around new activities that are very intentionally designed to push marketing to adopt new skills, and make it clear that the knowledge center is the shortest route to success.
An intriguing idea was floated by one of the agency experts, who said:
We need to use the best of digital marketing to identify people internally…to make sure that the right people and knowledge resources are instantly, powerfully connected.”
Although most companies wouldn’t produce enough data to make it work, there’s something very appealing about using digital to support digital.
Attracting and developing digital marketers
One vital element of evolution or transformation is that people come for the ride. Some of them will be long time employees who have worked to learn and absorb training. Others will be specialists new to the enterprise.
There was near universal agreement that finding the right mix of digital expertise and strategic acumen was very difficult.
As we transform globally to digital – we’ve come to really appreciate that it’s not about numbers of digital people, but having the right people. We thought we knew what that strategy team needed, which was finding the strategic people who also know digital.
Now we’re redefining the kind of person we’re looking for as someone who really gets both. Understanding digital at a fundamental level affects an individual’s understanding of strategy.
On the topic of attracting elite digital talent, one marketer lamented:
People who want to spread their wings in digital may not be drawn to healthcare because they’re trying to spread their wings in a box.
While there’s truth in that today, it was clear in listening to the people around the healthcare roundtable that their industry is changing and the days when it will easily attract the best digital minds may not be so far off.