Consumer-Driven Senior Care

In a recent article published in Beckers Hospital Review:   6 Trends in an Era of Consumer-Driven Healthcare, hospital executives were provided with the strategic implications of current and emerging trends in consumerism.  These same trends will undoubtedly impact organizations that provide senior housing, aging services and post-acute/long-term care.  Understanding, analyzing and developing strategies to address the challenges and benefits from opportunities presented by/offered as the Baby Boomer generation begins to hold sway over the healthcare delivery system will be important for both providers, as well as policymakers.  So I thought it might be useful to try and interpret the key themes presented in that article from the perspective of senior housing and care (SHC) organizations.

Key Trend 1: Transparency
The Affordable Care Act specifically focuses on two areas of transparency: the gathering, assembly, analysis and reporting of clinical and operational data by healthcare providers (e.g., provisions found in the Elder Justice Act ~ Sec. 6703 of the Affordable Care Act); and the assimilation of comparative cost/benefit – i.e., value – information and analysis, particularly relating to provider charges and third-party reimbursement of same (e.g., Health Insurance Exchanges).

With or without the constitutionality of the Affordable Care Act, the message here for SHC providers is quite simple: get used to it.  Nay, if you want to be around in another decade, embrace it.  We are accelerating toward a period of time during which provider culture will be predominantly impacted by data-driven marketing, clinical performance, operational efficiency and financial reality.  And the watchdog enforcing voluntary compliance will not be CMS, state governments or private accreditation: it will be your own stakeholders and constituents.

Key Trend 2: Social Media
People talk – and, of course, people with more time on their hands talk more.  Evidenced by the well-documented social mobilization of the 1960s and 1970s – Boomers know how to communicate.  The intriguing, albeit sometimes almost depressing, realities of electronic social networking offer a challenging conundrum to SHC organizations.  Many, if not most, healthcare providers have embraced that reality in one form or another – whether that’s physicians communicating with patients via e-mail, hospitals using online YouTube videos to promote post-discharge wellness education or organizations like MorseLife in Florida developing an iPhone app (the MorseLife All) that connects seniors in its market to their campus.

Connecting in real time, however, carries with it a variety of challenges and opportunities.  The clinical side of healthcare (the side that can save your life) requires a keen sense of discipline and objectivity – two elements largely vacant in much of social media.  But there seems to be very little standing in the way of information – and misinformation – being haphazardly propagated as proxy for clinical expertise via such media.  Consumers recognize this risk, and that will offer an opportunity for SHC providers to be positioned within social media based upon their credibility, expertise and authority.  Recognizing this has important implications for brand management.

Key Trend 3: Consumer Empowerment
The underlying objective of increased transparency, access to comparative outcome analytics and evidence-based healthcare/medicine is, of course, to help position the healthcare consumer to be in a position to better advocate for their own healthcare. The benefits of such empowerment, however, will necessarily be tempered to the extent the targeted audience is unable to take full advantage. As we know, this is often true of a senior population that may face a variety of obstacles (e.g., mobility outside the home, effects of medication, propensity toward dementia). For good or ill, it will likely fall upon SHC organizations to play a proactive advocacy role for many disenfranchised seniors.

And this will put those providers in a potentially perilous position. Being an advocate usually necessitates having a healthy dose of skepticism. It is difficult, at best, to challenge and defend at the same time. It is sort of like playing a game against yourself: you will always win – and lose. But that is what innovation is all about – finding value-added solutions where none were thought to exist. Those organizations that develop innovative approaches to consumer advocacy for the senior population in ways that add value to all stakeholders will find huge competitive advantages in the future.

Key Trend 4: Consumer Expectations
Much has been written regarding the comparative demands of the Boomer Generation relative to previous generations, but demographically we have really only begun to see this manifested where product and service offerings target the 55 – 65 age cohort (e.g., Active Adult communities, age-defying miracle cures and, of course, Harleys).  But where those Boomer consumers have begun to make their mark the evidence of their purchasing sophistication and discernment is compelling.

Boomers demand value.  And as written in this space before, value in healthcare must be understood as providing better patient experiences and outcomes at an overall lower aggregate cost.  So while value is emerging as the driving force of third-party payer expectations (whether that is from employers, private insurers or Medicare/Medicaid), it will also be the driving force of the empowered consumer.  The message for SHC providers is clear: think value first, often and always.

Key Trend 5: Consumer Outreach
The proliferation of electronic communication media offers some very compelling opportunities for SHC providers to “connect” with their targeted markets.  In doing so, however, it is important to recognize how many other sources are competing for the attention of individuals in those markets.  While I recognized that at a theoretical level, this blog has been a firsthand experience of having to reconcile your individual perceptions on the value of content produced with the actual level of interest generated.

As I have been making the point in presentations on Healthcare Reform, if we get everything else right – increasing access, improving affordability, bending the cost curve, expanding the caregiving labor force – but fail to improve upon the overall health and wellness of our society, we will have failed miserably in creating a healthcare delivery system that is sustainable.  SHC providers are very uniquely positioned to leverage the benefits and advantages that electronic media can offer to help improve the overall health and wellness of the senior population in their communities.  And such efforts will find great synergy with other strategic efforts to develop integrated care and home and community-based delivery models.

I think SHC providers have more to gain than lose by being proactive in embracing Consumer-Driven Healthcare.  What do you think?

  ~ Sparky

Being Proactive in the Face of Uncertainty

While none of the Policy Pub’s guests have provided any comments yet (I’m hoping a few more “spirited” posts will begin to wear down the  contributory inhibitions), several patrons have emailed me privately and asked whether I had any practical advice on how to approach this period of policy limbo – between before knowing how SCOTUS will decide and the outcome of the fall general election.  So I thought this might be a good opportunity to offer some advice.

Accept the Brutal Reality
Often lost in the din of popular media reporting on the Healthcare Reform debate are the irrefutable realities that underlie how and why it has become a major public policy issue in the first place.  The Internet is replete with charts and tables illustrating the debated evidence of unsustainable healthcare spending.  I think a very poignant and candid assessment that ought to resonate with business-minded individuals can be found in the January 2012 Standard & Poor’s credit report, Mounting Medical Care Spending Could Be Harmful To The G-20’s Credit Health
.  It was noted there that, “steadily rising health care spending will pull heavily on public purse strings in the coming decades. If governments do not change their social protection systems, they will likely become unsustainable, in Standard & Poor’s Ratings Services’ view.”

The will to control healthcare spending is not a Republican or Democrat phenomenon.  So holding out hope that future policy outcomes directed at the behest of either current or future elected officials, irrespective of political party, will somehow relieve the pressure is a fantasyland belief that only serves to psychologically forestall the inevitable.  Healthcare organizations that are able to accept and internalize knowing that they will have to compete on value in the future will survive – those that do not, will not.  It is really as simple (and brutal) as that.

Use this Time to Answer Some Tough Questions
If the Affordable Care Act is either partially or fully struck down – and/or the general election delivers a major shift in party majority, there will be a brand new tsunami of political opportunism in its wake.  It will take a fair amount of time (I am betting six quarters, at least) for that special interest flooding to subside to the point where any type of meaningful legislation can be passed replacing the ACA.

What impact that actually has, however, on the timing of the policy-driven financial realties that senior housing and care providers are facing is unclear because much of the ACA’s impact is not scheduled to begin until 2014 in any event.  And while we wait for the Federal government, State budgetary pressures will continue to mount.  So I think a prudent approach is not to mark the passing of time by the political winds but assume that every month going forward should reflect a quantifiable movement toward a future state vision of your organization that is more lean, more efficient – and is able to deliver more value than your competition.

To accomplish this, however, you first need to decide what that future state vision looks like.  I just finished a new whitepaper on strategic planning and positioning that discusses the importance of visioning in context.  For the purposes of this post, I think the relevant questions that need to be answered by most organizations – and very soon – are:
     What business(es) are we in?
     Who really are our constituents and stakeholders –
        and how do we bring value to them?
     Are we ready to partner with other healthcare 
        providers – and under what circumstances?

     How do we ensure that our investments create
         future option value?
     Where are the opportunities to monetize our value
        chain into revenue?

Be Ready to Negotiate
If there was one skillset I would say – on average – represents the weakest link for high quality, high value senior housing and care organizations desiring to thrive in a future world of Healthcare Reform it would be the ability to negotiate business deals.  It is just not an inherent skill that seems to be well correlated with other leadership qualities that are of paramount importance – and have historically been sufficient to achieve leadership excellence.

That is changing, and quickly.  Effective negotiation will determine whether you are  “bought by” or “merged into” another organization.  It will determine whether the acquisition you make increases or decreases the overall value of the combined organizations.  It will determine whether you drive the terms and conditions necessary to financially survive under managed care, or accept what you’re given – and hope for the best.

When the time comes to partner with other market participants (whether those are community-based organizations, physician groups operating as a medical home or  hospitals) you don’t want to be sitting there with your hand up, saying, “oh pick me, pick me!” You want to know well in advance what you bring to the table, what it is worth and what you demand for that value.

Create an Opportunity Assessment Matrix
Finally, senior housing and care organizations will have to be able to react more quickly to opportunities than they have in the past.  As Healthcare Reform – in whatever final format that takes – begins to roll forward in earnest, market dynamics will accelerate.  New – and often unexpected – partnership opportunities will emerge.  Being able to react quickly – and before the competition – will be a huge strategic advantage and key to survival.

One idea that we have found helpful is the Opportunity Assessment Matrix.  This is a concept that we have used with several senior housing and care organizations, and it is a tool that is designed to streamline the process of identifying, assessing, analyzing and prioritizing market opportunities.  It is also helpful in mitigating risks and ensuring the requisite organizational support is in place before valuable resources are invested in pursuit of alternative opportunities.

The concept is basic: discuss, agree upon and document the various elements that any potential opportunity must possess to merit consideration.  Determine the relative weights of those elements in the context of the organization’s business strategy.  And then create a consistent methodology for who and how the individuals responsible for assessing the opportunity will be engaged.

Hope this is helpful . . .
  ~ Sparky

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