What’s happening with health care in Pittsburgh is in some ways unique, yet in other ways it is part of an evolving national trend.
What’s unique:
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The public relations war – complete with sensational advertising and sensational commentary – between Highmark, the region’s largesti insurer, and the University of Pittsburgh Medical Center (UPMC), the region’s largest health care system, in their battle for market share and access.
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Highmark’s purchase of the former West Penn Allegheny Health System to create a payer/provider entity known as Allegheny Health Network (AHN) to compete with UPMC.
What’s not unique:
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Consolidation is taking place across the country as health care reform advances and economic and regulatory pressures increase.
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According to consultancy DHG Healthcare, only 13 percent of hospitals surveyed in 2012 intend to maintain independent. For the other 87 percent, DHG writes in a recent white paper, alignment is at least a consideration in their strategic plans.
I listened to a presentation on hospital mergers and acquisitions last week and have had conversations over the last several months with health care experts who know much more about the sector than I do. I heard the same thing on all counts. Most community hospitals will not be able to remain independent, and some small, rural community hospitals likely will go away.
That’s why I was especially intrigued when I read a recent letter from the president and CEO of Butler Health System to the community.
Located just north of Pittsburgh in Western Pennsylvania, Butler Health System is comprised of a flagship hospital, Butler Memorial Hospital, and 20 outpatient facilities. I’m guessing here, but I’d say over the last 20 years, it has been one of the most successful community systems in the region, consistently operating in the black when most were in the red.
In his letter, CEO Ken DeFurio talked about the importance of competition to health care, saying, “Our definition of competition … is not that bigger is better. It is not that insurance companies, hospitals and doctors should all be a part of one organization. It is that competition should be based on quality and cost, and you should have choices.”
The message is a direct knock on Highmark/AHN and UPMC, both of which are provider/insurer organizations.
My reading of DeFurio’s piece: we intend to stay independent. With all of the completed M&A activity, and the rumored transactions yet to take place, it’s a bold, almost out-on-a-limb, statement.
I worked at Butler Health System for a short time, and the importance of being an independent, community hospital was the noble mantra by which we lived, and it obviously still is today. The system clearly did an excellent job years ago of anticipating a shift to outpatient care, as it built an outpatient network and new hospital that have likely staved off serious advances from competitors. And the system has for the most part remained free from alignment with other hospitals, though it did enter a partnership earlier this year with the UPMC to provide cancer care.
Competition should be based on cost, quality and service, as DeFurio said. I have yet to see, though, a strategic marketing plan or the outputs from one developed by any health system that would support that premise with an authentic, compelling story. Instead, across the country, we get the standard marketing claims about the region’s greatest heart care or orthopedics team, or the most advanced women’s health center, or the speediest emergency room. We hear about the newest doctors or surgeons coming on board.
A healthcare organization’s Story, which is broader and deeper than its “brand,” provides a more robust, authentic and useful framework to engage patients and other stakeholders. It provides context. It is authentic. The institution’s story enables its leaders to showcase the true value of what they do in ways that do not have to be shoehorned into oversimplified brand “hooks,” tag lines or other premises.
In the 21st century digital age of transparency, hospitals are being asked what they’ve done for their community lately. Patients are asking why they should get their care there. They go online to rate doctors, nurses and hospital systems. Their deep conversations about the value of a health care institution have nothing to do with the tagline or traditional branding tactics such as logos and colors.
The notion of cost and quality factoring into health care decision-making has been bandied about for years, yet the complexity and opacity of the insurance and health care industries have prevented anything meaningful from happening.
Now, with the Affordable Care Act, it seems, cost and quality will become vital to the survival of hospitals –the wheat will be separated from the chaff. Hospitals and health systems that have successfully anticipated where health care is headed and find themselves in a relatively strong position today should do the same thing when it comes to their strategic marketing plan: instead of a tired, ineffective marketing strategy, tell your capital S story.
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Jason Snyder is a senior vice president for WordWrite Communications.
