Marketing Healthcare Services Based On Price
November 08, 2016You don't have to be a retail expert to know that price drives consumer decision making. After all, who doesn't love a sale? However, when it comes to healthcare services, price has largely been left out of the conversation.
Even those of us who work at a healthcare advertising agency don't know what healthcare services cost. We might know how much the copayment will be if we visit our primary care physician or specialist, but do we really know what a physician or hospital charges for a specific procedure or treatment?
The answer is usually "no." Why? Because prices for healthcare services vary significantly among providers, even for identical procedures. Moreover, the same provider may charge different prices based on who's paying – one price for Medicare, one price for insurance company A, one for insurance company B, and a totally different price for someone paying with cash. Even more troubling, there's no evidence that prices correlate to quality.
That's why many consumers and payers – along with this healthcare marketing firm – advocate for greater price transparency. If consumers knew they could receive high-quality services for a lower price, they might choose the lower-cost provider, triggering competition, and ultimately bringing down overall healthcare costs.
The problem is most of us don't pay for the healthcare services we use. (At least we don't pay the full amount.) As a result, we're less motivated to price shop.
However, the paradigm is shifting.
More and more insurance plans – both those provided through employers and Obamacare policies purchased on health insurance exchanges – include high deductibles, high co-insurances, and high copayments. In short, consumers bear a greater portion of their own healthcare costs. However, despite patients shouldering increased financial responsibility, medical advertising still does not focus on price or value.
It could be that many people equate higher costs with higher quality. In fact, in a study conducted at the Institute for Policy Research and Innovation, a significant number of respondents viewed higher cost as a proxy for higher quality. This was true even among those whose health plans required significant cost sharing.
But when cost and quality information was reported side by side in an easy-to-interpret format, more respondents made high-value choices, weighing cost in their decision making.
In essence, it's all about value.
As healthcare marketers working in a marketing communications firm, we have to recognize the changing role of the patient from solely a consumer of healthcare services to a consumer and a buyer. That means it's incumbent upon us to define what healthcare value means. We have to better educate patients that they have choices when selecting providers, and those choices impact their finances and their health.
Likewise, the industry as a whole needs to change. We can no longer tolerate the opaqueness of healthcare pricing. The cost of medical services needs to be accessible to everyone, and not just the patient's share, but the whole kit and caboodle.