Pandora is out of the healthcare box and her name is Technology.
Karin E. Bauer, VP Client Services | SGK Health | December 2017
It’s been a year since the last JP Morgan Healthcare Conference. Every year this meeting causes me to reflect on how far we’ve come in healthcare, and how much more work still needs to be done.
When I was doing cancer research at the bench more than 20 years ago, the value proposition in healthcare was purely results-focused on improving outcomes and quality of life for patients. While this is still true today, value-based care and technology have changed everything. We don’t just think about patient outcomes anymore. Now we think about ways to support care providers and care delivery networks with more quality, cost and time efficient ways to improve outcomes. So, while the desired outcome for patients has remained the same, our path to getting there has changed.
“Value” as it relates to patient outcomes is now inclusive of the entire healthcare ecosystem, and the entire ecosystem is under the microscope. This, in turn, is having a profound impact on how we all do business in healthcare. The collective “we” in healthcare is getting asked questions we have never had to answer before.
Take for example the issue of drug pricing. “We” used to be able to wave our magic outcomes and quality-of-life wands and say, “These patients survived much longer and are much healthier because of this invention, so we are charging X for this invention.” Companies were called to the table for the high price of better outcomes, but the magic outcomes wands let them to walk away without changing prices too much.
Today, magic wands aren’t enough – and it’s not just the companies that make the products we ingest, wear or interact with to be healthier that are taking the heat. As anyone who has been in the healthcare industry for long enough knows – the value proposition in healthcare has fundamentally changed.
There are numerous technology start-ups and even some large enterprise companies that see opportunity in changing drug pricing models, lowering costs for patients and reaping some benefit themselves. While it remains to be seen which or how many of these companies will succeed or maintain interest, the fact is that change is underway, and the drug pricing model is going to be different tomorrow than it is today. The same is true for all other verticals within the industry.
The same human and AI minds that are parsing through old drug pricing models and figuring out ways it could be changed to better fit value-based outcomes in healthcare are the same ones who are driving all of the sea changes in healthcare. Pandora has jumped out of the healthcare box everyone, and her name is Technology.
At JP Morgan 2017, SGK Health interviewed 17 executives from a mix of companies ranging from early-stage start-ups to large pharmaceutical organizations to assess the value proposition of marketing in healthcare.* Download the full report below. Today, a year later, we are confident we are on the right track to delivering much needed value to the industry, but we are coming back to #JPM18 with a different set of questions to help solve these problems:
How can human-centric design thinking help healthcare companies engage with a customer base that is increasingly value focused?
How can design thinking confer efficiencies into the healthcare marketing supply chain such that substantial cost savings can be realized?
If you are going to be at the JP Morgan Healthcare Conference in San Francisco this year, we invite you to join one of our SGK Health Design Thinking Sessions, or book a meeting with us at a time of your choosing to help push the needle on solving the value equation in healthcare.
Quality + Speed + Efficiency = Design Thinking
If you can’t visit us during JP Morgan, we’d enjoy the opportunity to have a conversation with you at any other time. Simply book a meeting.
Wishing you a healthful and prosperous new year,
Team SGK Health
*Interviewees comprised a mix of healthcare start-ups (8), financial and strategic consultants to the industry (4), investors (2), mid-sized healthcare companies (1) and large organizations (2) for a total of 17 interviews.
Request a meeting.
Ask Yourself if It’s Right for You: Empowering Health and Wellness Consumers
Vince Schaller , Managing Director | SGK Health | June 2016
“Ask your doctor if it’s right for you.” That advice, familiar in the U.S. ever since direct-to-consumer pharmaceutical advertising became legal nearly 20 years, is still sound. But today, consumers are increasingly asking themselves, before they even schedule a doctor’s appointment, “What are the right choices for me?”
Call it the increasing consumerism of health and wellness. Or, in the words of Kristin Hambelton, one of many CMOs who are bringing traditional marketing strategies to healthcare-oriented enterprises, call it the “Amazon Effect.” As Hambelton explains, “We want what we want, when we want it, and if we can’t get it from one place we’ll just keep looking until someone meets our needs.”
New Choices, Increased Competition, Ubiquitous Information
Pharmaceutical companies, medical device manufacturers, healthcare organizations, hospitals, clinics, insurers, and even individual providers are all facing a new reality: The empowered healthcare consumer. It’s a transformation driven in part by the proliferation of choices and the easy availability of product information and reviews – in other words, the “Amazon Effect.” But there are other powerful drivers as well.
In the U.S., the Affordable Care Act has created a marketplace in which insurers are competing to attract tens of millions of new subscribers directly, rather than through employer-based plans. At the same time, consumers are paying far more attention to the health, nutritional, and fitness benefits of the brands they buy, using information they find on the internet, through social media, and on a growing selection of “clean label” products to guide their choices.
Consumers are looking for continuous support for their health and wellness goals, not just a few words of advice at their yearly doctor’s appointment. That’s why mobile healthcare has become a top industry trend, with the number of users who have downloaded a health or fitness app doubling to 32 percent in just two years. The mobile health app category is expected to grow at a CAGR of 15 percent to reach $31 billion by 2020.
Wearable devices are also booming, with the sports and fitness category expected to reach almost $15 billion by 2021. Wearable medical devices, such as heart rhythm monitors and pain management systems, are expected to grow from a global market of $3.3 billion in 2015 to $7.8 billion by 2020.
Beyond Product-Centered Information to Brand-Centered Relevance
All of these trends point to one inescapable conclusion: Consumers are eager to take control and responsibility for their own healthcare decisions. They still want their doctor’s advice, but they’re coming to appointments armed with a lot of information. And they’re actively evaluating their own wellness and seeking for ways to improve it every day.
Successful health and wellness brands know how to market to physicians, appealing to their expertise and their desire to deliver better outcomes for their patients. Now, they need to learn how to market to consumers, appealing to the most fundamental desire of all. To live well. Nothing could be more personal.
Brands still need to build physician awareness and trust through product-centered information. But to win with empowered consumers, they must also provide brand-centered relevance, based on insight into consumer behaviors, perceptions and preferences. Like other consumer brands – such as CPG, automotive, fashion, and electronics – they need to learn how to create strong emotional bonds and brand identification to last a lifetime.
Getting It Right: A Case Study
Lifetime bonds are especially crucial for brands that ask users to make a major commitment in terms of money, time, or lifestyle. Consider a brand like Medtronic.
From its beginnings with a wearable, battery-powered pacemaker, Medtronic has grown to become the world’s largest medical technology company – providing surgical, implantable, and wearable devices to treat nearly 40 medical conditions. Innovative products drive Medtronic’s success. Since 1949, Medtronic had been taking the rational message of clinical progress straight to physicians.
But now there are more choices, and patients are asserting their rights to make the choice. Medtronic has learned how to engage patients on an emotional level.
The new Medtronicdiabetes.com website is a prime example. It offers patients a wealth of information about the precision and responsiveness of insulin pump therapy, how the Medtronic pump system works, its advantages, insurance coverage, and how to make the decision between multiple daily self-injections or an insulin pump.
Just as important as these rational considerations, Medtronicdiabetes.com also provides emotional engagement with stories of real people overcoming their doubts about the technology, gaining peace of mind about its reliability, and coming to understand the benefits of better diabetes control. The message to patients is to “Live Your Exceptional Life,” without letting diabetes management get in the way of any activity.
Patients will find images and videos that show how unobtrusive the system is, from sleeping with it to playing baseball. There’s even an app that allows patients to monitor their pump status and glucose levels from a smartphone, as unobtrusively as if they were simply texting a friend. And there are hundreds of skins available, so that users can transform their pumps into personalized fashion accessories, similar to choosing a cellphone case.
Rational Choices, Emotional Connections
Medtronic is just one example of a company that has learned how to connect with consumers by honoring their day-to-day concerns, interests, and hopes. Kaiser Permanente has significantly increased its enrollments and lowered costs by giving people information they need to take better care of themselves when seeing a doctor isn’t really necessary – and by creating an inspiring campaign around the theme that “Life Is Amazing,” and well worth the cost of protecting it.
For Gilenya, the first oral treatment for relapsing multiple sclerosis, Novartis created an award-winning campaign, “Hey MS, Take This!” It features young MS patients sticking out their tongues – with the Gilenya capsule they’re about to swallow – in defiance of the disease. That’s relatable in itself. But what’s really extraordinary is the campaign’s use of social media channels, encouraging users to speak out against MS, tell their own success stories, and share information. It’s a first in the pharmaceutical industry, which has always been risk-averse when it comes to social media. The campaign created a vibrant, highly visible community and helped increase Gilenya sales by 28 percent in one year.
These are just a few examples, and we’re sure to see many more in the coming years. Because consumers don’t want to be sold to. They want to choose. To believe their choices are rational, based on open and transparent information. To feel confident in their choices, based on the experiences and testimonies of people who have made the same choices.
And to feel an emotional connection with the brand they’ve chosen, because it understands their desire for an exceptional life and is dedicated to helping fulfill it. So ask yourself: Is your brand right for them?
 Kimberly A. Whitler, “Succeeding in the Healthcare Industry as a Marketer,” Forbes, March 20, 2016. www.forbes.com/sites/kimberlywhitler/2016/03/20/how-marketers-can-transfer-into-the-healthcare-industry-successfully/#3e50e9b47dc2
 Mark Brohan, “Mobile Will Be a Top Industry Trend in 2016,” Mobile Strategies 360, December 11, 2016. www.mobilestrategies360.com/2015/12/11/mobile-will-be-top-health-industry-trend-2016
 “The mHealth App Market Will Grow By 15% To Reach $31B By 2020,” Health IT Outcomes, November 11, 2015. www.healthitoutcomes.com/doc/the-mhealth-app-market-will-grow-reach-by-0001
 “Smart Sports and Fitness Wearables Market to Hit $14.9 Billion by 2021,” PR Newswire, September 21, 2015. www.prnewswire.com/news-releases/smart-sports-and-fitness-wearables-market-to-hit-149-billion-by-2021-528461241.html
 “Global Wearable Medical Device Market – Growth, Trends and Forecasts (2015-2020),” Mordor Intelligence, November, 2015. www.mordorintelligence.com/industry-reports/global-wearable-medical-device-market-industry
 Beth Snyder Bulik, “Five Digital Campaigns That Show Pharma Really Can Do It,” FiercePharma, June 8, 2015. www.fiercepharma.com/marketing/five-digital-campaigns-show-pharma-really-can-do-it