Healthcare delivery and the impact on hospital marketing
Hospital marketing implications based on OSH patient experience
Sharing this newsworthy and insightful post from The Keckley Report – Primary Care Gatekeeping Plus Capitation: Is It The Right Combination? It’s another story (on top of those we’ve written about new entrants like Walmart vying for healthcare patients) with downstream implications for the future of healthcare branding, hospital marketing, medical practice marketing and patient experience.
The post is about Chicago-based Oak Street Health (OSH), another healthcare services corporation which just went public. Oak Street Health operates 54 primary care centers in nine states. It targets seniors who are Medicare Advantage members who “appreciate more time with doctors, getting rides to and from appointments and same-day scheduling.”
Oak Street’s mission is to rebuild healthcare as it should be. Since their founding in 2012, they’ve committed to building a primary care delivery platform that directly addresses rising costs and poor outcomes, two of the most pressing challenges facing the United States healthcare industry.
In his OSH investor pitch, CEO Mike Pykosz takes aim at avoidable hospital use as key to the company’s operating philosophy: The quality of care for older adults in America isn’t working today, despite the U.S. spending more than any other country on healthcare. We created an integrated model that provides measurably higher quality care, a vastly improved patient experience, at a lower cost, that keeps our patients happy, healthy and out of the hospital.
Oak Street Health’s Chief Growth Officer Tamara Jurgenson adds we are deeply committed to providing integrated, preventive care that helps seniors live their best lives, and our planned growth for early 2020 reflects this commitment. In Becker’s Hospital Review, she added that OSH plans to open its first locations in New York and Mississippi this year. The planned opening of our first centers in New York and Mississippi represents a continued commitment to providing access to innovative, high-quality, value-based primary care to older adults where it is most needed across the country,
Oak Street’s Investor Premise
There are two ideas central to OSH’s investor premise:
Health costs are unsustainable. According to CMS, national health care spending reached $3.81 trillion in 2019, is projected to reach $4.01 trillion by the end of 2020 and $6.19 trillion by 2028. It projects that Medicare spending will increase 7% annually and its hospital trust fund will be insolvent by 2026 as 10,000 seniors enroll daily and pressure to reduce soaring federal deficits mount among lawmakers. At the same time, employers are cutting back on employee health benefits and consumers are increasingly unable to afford their healthcare premiums and out of pocket obligations (along with their unwillingness to pay them).
Primary care gatekeeping (in which the goal of the primary care physician is to reduce patient referrals to specialists and thereby reduce costs) is the optimal strategy to control population-health costs by reducing demand for hospitals and specialists through aggressive, holistic, primary, and preventive health. Oak Street is betting its primary care centric model will outperform alternative payment programs proposed by CMS for its fee-for-service providers with better outcomes for its patients and lower health costs for its customers—sponsors of Medicare Advantage plans.
On a personal note related to above, I’m not sure PCPs as they function today can realistically be gatekeepers but rather coordinators of care, in which the goal of the PCP is to integrate both primary and specialty care to improve quality. But then again, OSH just raised over $300MM.
Oak Street Differentiation & Impact
Hospital marketing teams, along with physician and medical practice marketing teams should take note of elements of Oak Street’s differentiating and customer-centric business model. As noted by Paul Keckley in his post:
Whole Person Care
Oak Street Health practices a holistic clinical model that integrates physical, emotional, and behavioral interventions. Care teams led by physicians and nurse practitioners meet daily to discuss patient needs and necessary interventions. They are encouraged to spend more time with patients and performance bonuses are tied to patient outcomes and quality of care, not the volume of patients seen. Clearly, this is quite a different kind of patient experience relative to the standard approaches to healthcare.
Patient Experience & Accessibility
Most Oak Street patients are scheduled for eight in-person visits annually. Telehealth is embedded in its care management regimen to augment in-person visits and frequent interaction with members of the Oak Street care team is encouraged. It seems to work: in its SEC S-1 filing July 10, it reported a “51% reduction in hospital admissions, 42% reduction in 30-day readmission rates and 51% reduction in emergency department visits, all while maintaining a Net Promoter Score (which measures customer experience and predicts business growth) of 90 across our patients based on survey data we gathered from patients after their physician visits from June 2018 until March 2020.”
Impact on hospital marketing/physician and medical practice marketing teams
For hospital marketing teams, and physician and medical practice marketing teams, there are a few important implications to consider.
Patient Experience. When it comes to their healthcare experiences, consumers don’t care about ownership structures. What matters to them is convenience and affordability, their physical and emotional health and wellbeing and not experiencing any surprises about what they’ll pay. Which equates to being transparent, and leads to building brand trust. This is the strategy OSH is following, and why they’re so optimistic about their future.
Eliminating Friction. Another related opportunity to convenience that OSH is seizing upon is eliminating the friction many healthcare customers have experienced because of the historically fragmented structure of the industry. OSH is able to create memorable patient journeys with a consistent human touch from beginning to end and that also integrate healthcare digital strategy and tactics.
Thinking Beyond Industry Borders. While it’s important to look to forward-thinking healthcare industry companies like OSH as well as new disruptive healthcare entrants like Apple, Best Buy and Walmart, it’s most productive to couple this industry knowledge with inspiration from outside industry leading customer experience companies like Amazon, Zappos, Nordstrom and Chick-fil-A. This has always been fundamental to our work at Trajectory – combining industry intelligence with outside category inspiration.
Hospital Marketing and Advertising. In the midst of a changing healthcare environment, healthcare marketing teams need to think more creatively and holistically about how to appeal to and engage the newly empowered health consumer, earn their trust and demonstrate value. What’s very clear is that messaging alone won’t achieve this as experience is part of this equation.
Reach out for a no-risk consultation. Since 1999, hybrid brand consultancy/creative agency Trajectory has worked across the healthcare and wellness continuum helping brands rise above the noise to create greater value for their businesses and customers.