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Why the Empowered Patient is the Key to MedTech Innovation

Posted by Andrew Wilson

Mon, Feb 11, 2013

The Cost of CareWhile the rest of us breathe a sigh of relief that the fiscal cliff threat is behind us, the MedTech industry is feeling the pain of the new medical device excise tax, a part of the Affordable Care Act (ACA).  While it remains to be seen whether the promised influx of patients resulting from the ACA will ultimately generate enough revenue to offset the tax, looking at the current state of US healthcare (Click on Figure 1 for Larger Version) it is painfully clear that additional tax revenue alone is not the solution; rising costs must be addressed in a meaningful way. 

Innovation to develop products, services, and systems that are more effective and efficient is critical to solving the healthcare cost problem. While the majority of MedTech organizations historically focused their sales and service efforts on their relationship with physicians, there is an increasingly vocal group, including doctors, patient advocates, and policy makers, who believe the key to healthcare innovation lies in empowering patients. Because patients ultimately make decisions about things like diet, exercise, when to seek treatment, and disease management, they have an enormous influence on the cost and the effectiveness of their own care.  In fact, some believe that 80% or more of healthcare decisions are made by patients, not medical professionals. The idea is that if we can empower people to be more informed and engaged in their care decisions, they will be the driving force behind improving the efficiency and effectiveness of the healthcare system. 

Assuming the care system does evolve in a way that empowers patients, many MedTech organizations will be under increased pressure to incorporate features in their products that impact patient’s behaviors and help them make better lifestyle decisions.  For example, imagine a pacemaker that can provide a patient with information in real time through a smart phone app that will help him become more conscious of decisions about sleep, diet, and exercise.  These types of patient empowering innovations have the potential to dramatically change healthcare in the US (and worldwide).  And MedTech companies have the opportunity to drive this change; however it will require a shift in how they have traditionally learned about their markets.

As MedTech companies race to innovate, they will likely hold internal brainstorming sessions, meet with physician advisory boards, and speak to their sales and customer service groups. The problem with these approaches is that it leaves out the most critical component— the patient, the key to successful innovation.  To generate this intimate knowledge of patients, organizations need a plan—a change from how MedTech organizations traditionally approach innovation.  One that does the following:

  1. Identifies what customers ultimately want and need from their healthcare.  Talk to patients living with the disease state; understand their daily struggles, and what would improve their healthfulness.

  2. Prioritize what matters most to patients based on the most pressing needs of the patients; organizations should not invest time and money in trying to address each item identified by patients.  Fortunately, all wants and needs were not created equal. Instead, companies should focus on developing solutions that address those needs that are most important to healthcare consumers.  Additionally, there are likely groups of patients that have different priorities, and organizations should consider whether and how they address these different groups.

  3. Translates these prioritized wants and needs into solutions.  Armed with a detailed understanding of what matters to healthcare consumers, organizations can apply their expertise to develop elegant solutions that satisfy the most critical unmet needs.

  4. Establishes metrics that indicate whether the solutions they have developed are truly empowering healthcare consumers and adding value to the system.

MedTech companies face a future of great uncertainty and opportunity; however it seems clear that in the empwered patient CMBcontext of the Affordable Care Act and the evolving nature of today’s care model, patients are going to become increasingly important.  MedTech companies will need healthcare consumer insight programs to uncover the wants and needs of their patients and discover the addressable white space. Their intimate understanding of their patients is enabling them to pull ahead and gain a decided competitive advantage.The winners aren’t going to be those who bring solutions to market first but instead those who can translate deep insight of patients into game changing products and services. 

Andrew runs CMB’s MedTech practice and has spent the better part of the past decade helping some of the most successful MedTech companies make difficult strategic decisions.  In his free time, Andrew enjoys scrubbing into tracheotomies with clients, and running with his dog Moby.

Topics: technology research, healthcare research, customer experience and loyalty

Key Questions for Insurers in Wake of Supreme Court Decision

Posted by Amy Modini

Mon, Jul 02, 2012

Obamacare and health insurersAlong with millions of Americans-patients,doctors,lawyers and, politicians-health insurers also waited with bated breath for last week's Supreme Court’s ruling on health reform. Now that the Supreme Court has upheld the basic provisions of the law, health insurers face the challenge of understanding how traditional markets will be impacted by the individual mandate and implementation of health insurance exchanges.  

Even with the ruling, there is still much that remains unknown about the law’s impact, and significant uncertainty about how the law will be enforced in each state.  But there are still critical questions insurers must consider now as they adapt to a new era in health reform, including:
  • How will this ruling and the establishment of exchanges impact company revenue and profitability?  Are there ways to take advantage of this ruling and increase company margins and revenues?

  • How do we compete effectively in an open exchange?  If price is the key criteria to consumer decision making, is there a way to minimize its influence and yet be successful?

  • Is there a need to re-examine the existing client base beyond the traditional demographics? Will an alternate classification help create a competitive advantage?

  • How do we move beyond the traditional employer sponsored channel?  How can we take advantage of technological shifts?

  • How relevant is the present communication strategy? Is there an opportunity to approach the future in a new, cohesive way that complements the product and distribution strategy?

Addressing these questions and mitigating the coming challenges will not be easy; surviving and flourishing in a changing market requires a truly new and innovative approach. We believe insurers must:

  • Reconsider how they approach product development – the insurers who will be successful in this new reality will be those who are able and willing to stretch boundaries of what insurance products look like to meet the needs of the customers, including offering supplemental insurance, wellness programs, incentives and monetary gains for meeting health goals, etc.

  • Go beyond traditional ways of looking at the market – motivations, attitudes, goals, and behaviors will become as, if not more, important to understanding and effectively messaging to insurance customers. Alternate classification of consumers could help insurance companies underwrite consumers in a more effective and efficient manner.  This could be especially advantageous for smaller insurance companies that cannot compete solely on price; perhaps it is time to start looking at a niche strategy. For a more detailed look at alternative market segmentation for health insurance, read our white paper: A New Approach to Segmentation for the Changing Insurance Industry.

  • Embrace the leaps in technology – insurers must explore the possibility of reaching consumers directly (internet, smartphone, etc.), and simplifying the purchasing process.  A simple product lineup with an easy buying process can go a long way in increasing an insurer’s favorability rating.

  • Consider a new messaging strategy – the health industry’s transition is a great time to consider resetting the existing image. Great products and great service need great messaging.  What are the goals people are trying to achieve? What is it that truly motivates them? What is it that truly sets us apart and does it add value to our customers’ lives? Is there a need to have specific messages to specific groups of consumers? Think about the answers to these questions. Insurers in the end must be able to convince consumers that they are partners in this journey and are mutually dependent on each other’s success.

Amidst all the uncertainty insurers are facing, we believe that to mitigate the uncertainties of the reform landscape, insurers will have to go back to the drawing board, rethink how they look at the market, engage in product development and address the fundamental goals of their customers. Insurers must recognize and leverage core capabilities that others cannot replicate. Competitive advantages stem from not one but from a series of strategic decisions. The correct mix of product, distribution, message and market coupled with inherent operational strengths (e.g., knowledge of a local market, ability to underwrite at low costs,  relationships with existing customers) can set insurers apart from competition and pave the way to long term success.

Posted by Amy Modini. Amy is an Account Director for CMB’s Healthcare Practice, when she gets the time she loves going to the beach with her two kids.

Topics: healthcare research, product development, health insurance research, market strategy and segmentation

Will Others Follow Walgreens?

Posted by Amy Modini

Mon, Aug 01, 2011

I heard great things about the Shopper Insights conference in Chicago a few weeks ago. While I couldn’t attend, others from CMB said the conference had a great vibe, and was filled with excitement and information about the latest trends in the shopping experience. One of the major takeaways was that the combination of customers’ shopping preferences and new technologies continues to drive change in the retail shopping experience.  We’ve seen this first hand in our Consumer Pulse detailing how smartphones are changing the retail experience.

Digital communications in healthcareAppropriately enough, and just in time for the conference in Chicago, I read an article in Marketing Daily about Walgreens new “Pick Up Today” service rolling out in Chicago. We have seen this multichannel trend in other retailers like Wal-Mart and Best Buy and at many grocery stores, but this is the first I have seen for a pharmacy. This really caught my eye as my focus is on the healthcare industry and we recently looked at consumer digital communications trends in the healthcare market.

Walgreens is timing things right - our research shows one-third of consumers are already communicating with their pharmacy digitally (through websites, email, portals, or mobile apps). And it’s not just the young, 36% of those over the age of 50 say they’re communicating with their pharmacy digitally. For now most are simply refilling a prescription or asking a question, but this is another opportunity for a customer touch point. While 31% of consumers say they are currently communicating digitally with their pharmacy, 76% say they expect to communicate digitally with their pharmacy in the future.  

With only 16% of consumers saying they would never communicate digitally with their pharmacy, health insurer, or provider, the trend is clear.  Consumers have certain expectations with regard to digital communications based on what they’ve done in other industries.  It seems like there is a lot of potential here for pharmacies and other healthcare companies (e.g., insurers, providers) and security is really not an issue for consumers even with topics such as prescription drugs and health-related issues. 

So I ask those healthcare companies out there….are you prepared for what consumers expect to be able to do digitally in the future?

 

Digital commiunications in HealthcareDownload the CMB Consumer Pulse report sharing the consumers' perspective around digital communications with their healthcare providers. Download the report.

 

 

 

Posted by Amy Modini. Amy is an Account Director for CMB’s Healthcare Practice and enjoys spending time at the beach and trying to keep up with her almost two year old son.

Topics: healthcare research, Consumer Pulse, conference recap, retail research

Health Reform Offers Both An Opportunity and Threat for Insurers

Posted by Kristen Garvey

Wed, Jan 05, 2011

As we enter 2011, the confusion and uncertainty around health reform only seems to be mounting. Amidst this uncertainty, consumers are looking for a reliable and trusted source of information, and they have the expectation that insurers will fill that role. Insurance carriers have the opportunity to become a trusted partner by providing the information consumers are so desperately seeking.

Consumer insights around healthcare reform

CMB conducted consumer research in mid 2010 which shows there is a clear gap between the level of knowledge consumers have around reform, and how they think reform will personally impact them. The result is that many consumers feel helpless.  As one consumer said,

“While I have tried to keep up with the legislation and have read articles and watched news programs on the topic, I'm not sure I know all the details.  For that matter, many of the ''experts'' don't seem to know everything either!” - Male, 50-54

Insurance carriers have an opportunity to become more than just another information source— they can become a trusted partner. In fact 61% of consumers expect health insurance companies to inform them about healthcare reform.

Join us for a webinar to learn more about the expectations consumers have towards reform. For Insurance carriers with foresight, health reform represents a rare, one time chance to grab market share and position their organizations for future growth.  

CMB Webinar on health reformWebinar: Challenges and Opportunities for Insurance Carriers in the Face of Health Reform

January 13, 2011 at Noon ET

Join Amy Modini of Chadwick Martin Bailey and J. Mark Carr of South Street Strategy Group as they look at how Americans are feeling about health reform and share consumer perceptions about the role of insurance carriers going forward. 

Topics: South Street Strategy Group, healthcare research, health insurance research, Consumer Pulse, webinar

Consumer Insights Show Consumer Uncertainty on Health Reform

Posted by Julie Kurd

Fri, Sep 24, 2010

 

health reformRegardless of your political leaning, it’s undeniable that the Patient Protection and Affordable Care Act will shift much of the healthcare insurance market from the current wholesale market to a consumer market.  At CMB, we recently conducted a national Pulse study and found that US consumers expect Health Reform to impact them personally, they’re just not sure how.

  • 75% of consumers say health insurance carriers are responsible for lowering health costs where <50% cited regulators as responsible.   
  • 78% of consumers say they seek information online (the mighty Google and WebMD etc.) 

Carriers need to educate their members and to set reasonable expectations for their role in lowering costs. And, according to the data,  the best way to get this message out is through health-related online sites and search-engine optimization efforts (to make their information more visible.)

...And now that the US is shifting from a wholesale market to a consumer market in health insurance, opportunities and risks for carriers are abound.

Posted by Julie Kurd. Julie is a Director on CMB's Financial Services/Insurance and Healthcare Practice who loves ski racing, Tuckerman’s Ravine, sailing and bananagrams. You can follow her @julie1research

consumer opinions of health reform

Topics: healthcare research, health insurance research