Archives for December, 2013

$500 per stitch?! That’s the average price of a stitch provided by an American hospital, according to an article in The New York TimesHow do you justify $500 per stitch? Or $4,495 for a CT scan that costs $400 dollars at an outpatient facility? As a Minneapolis healthcare PR and content marketing firm, we thought about how one sells the high prices charged by American hospitals. Prices that The Times article said are going up because of consolidation of healthcare providers. Three secrets of healthcare marketing have applied over the years:

1. Avoid the subject. For years, this was the basic approach. No price transparency, no acknowledgement of price issues, no discussion. As comedian Lenny Bruce used to joke about how to handle a delicate situation (and no, I won’t go there): deny, deny, deny.  An average American hospital day costs $4,000, five times the cost of a hospital stay in other developed counties, and with a la carte charges such as $36 for a single Tylenol pill with codeine (quoting the NYT article-cited prices). Avoidance and denial were fairly effective strategies, but that was before price transparency came in.

2. Make people feel sorry for the hospital. Here the hospitals are actually on higher ground, and just in time, because prices are increasingly on the web. Of the three secrets of healthcare marketing, here they have a credible case when made right. Hospital margins are dismal. Not all the patients pay their bills, Medicare reimbursements do not always meet the actual cost of providing the service, and the “list rate” is rarely the actual price paid to the hospital. Moreover, a fully-equipped and staffed hospital, ready to operate on someone’s heart on short notice, may not always cover the massive overhead at all times. Not only should you feel sorry for the hospitals, you should perhaps give to their foundation. The problem with this approach is that the hospital CEO salaries are also online.

3. Switch the subject to value delivered. Ah, this is promising and gaining speed. Borrow a leaf from marketers like Apple and BMW and move the discussion to how good the quality is and how much better the patient is for the experience. Or, take lessons from the Mayo Clinic, the Cleveland Clinic, Johns Hopkins and like masters of this. Of course, if a hospital takes this approach, they’ve got to deliver, especially since hospital outcomes and quality data are becoming increasingly available online. If fact, new rules under Obamacare and other reforms are actually starting to penalize hospitals for inferior quality and outcomes, for excessive readmissions and for hospital acquired infections. And the government is actually doing audits to detect unnecessary procedures and clawing back reimbursements for procedures the government determines are not justified by the documentation provided by the hospital.

In the end, quality may be the only answer, three secrets of healthcare marketing notwithstanding.