The Affordable Care Act: Defibrillating the Healthcare Industry

A Frost & Sullivan White Paper

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contents

The Affordable Care Act: Defibrillating the Healthcare Industry ............................................ 3

The Payer Perspective ................................................................................................................. 3

The Provider Perspective ............................................................................................................ 3

Marketing Automation: A Complete Benefit Package for Marketers ..................................... 4

Marketing Automation: Just What the Doctor Ordered ........................................................... 4

Preventive Care with the Oracle Marketing Cloud for Healthcare ........................................ 5

Extended Coverage with the Oracle Marketing Cloud for Healthcare .................................. 6

The Underwriting ......................................................................................................................... 6

Last Word ....................................................................................................................................... 7

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The Affordable Care Act: Defibrillating the Healthcare Industry

THE AFFORDABLE CARE ACT: DEFIBRILLATING THE HEALTHCARE INDUSTRY

The Affordable Care Act (ACA) has taken the entire healthcare industry by storm. It has opened doors for millions of consumers to access an online marketplace with abundant information on personal healthcare choices. Consumers can now choose from various insurance plans from a number of healthcare carriers to meet their health requirements as an individual.

That said, it has had seismic effects on the healthcare provider and payer markets. We define the provider market as comprising of the hospitals, doctors, nurses and other private or public organizations that offer diagnostic, preventive, remedial and therapeutic services to patients. On the other hand, the payer market essentially comprises of the health insurance firms. As a result of the enactment of ACA, or Obamacare, both payers and providers have to change the way they have interacted with consumers as the customer now has more choices at his or her disposal. Both segments have to make significant modifications to their business model to accommodate the changes and prioritize investments in their brand, marketing channels, partners and resources.

In this paper, we take a close look at the payer and provider markets in the healthcare industry. Where Frost & Sullivan’s paper, “Marketing Automation: The Secret Sauce to Marketing-Driven Sales Growth and Empowerment,” discussed in detail the value proposition of Marketing Automation solutions, this white paper will discuss the primary challenges faced by the marketing and sales organizations within the healthcare sector. We will then drill deeper into the benefits marketing automation brings to the healthcare market. This paper will also highlight how the value proposition of marketing automation helps marketers in payer and provider markets overcome their existing challenges and realign their marketing initiatives to better meet the needs of their customers.

The Payer Perspective

The payer go-to-market model is evolving from selling directly to large firms and through brokers, to now also selling directly to consumers through online channels. To succeed in the market, insurance companies will need a deeper understanding of their healthcare consumers in order to communicate and influence positive outcomes across existing and new marketing channels. With a loss in their ability to risk-adjust prices, payers now have that much more of a strategic imperative to keep members healthy. Just like in other markets, healthcare consumers now want companies to know and serve them better. Consumers expect good service and continuous dialogue about wellness, clinical outcomes, and relevant information that promotes good health. At the same time, consumers can now shop around through healthcare exchanges, which could significantly impact enrollment numbers.

The Provider Perspective

The rationale behind the ACA is to reduce healthcare costs by shifting from a fee for service to an accountable care model. Healthcare providers need to acquire new skills and technologies to automate care delivery models and refocus on patient engagement, care management, and health outcome measurement. Providers need to segment patient populations, automate care delivery models, and try their utmost to keep patients outside of emergency rooms for non-emergency reasons. Providers that successfully are doing so are now offered financial incentives through the ACA. This is a radical paradigm shift for the provider market, requiring them to market themselves better with a focus on keeping their patient populations healthier. The ACA offers a number of reward programs for providers that practice comprehensive primary care and who design incentives for their

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patients to get their physical examinations regularly. The carrot at the end of the stick is the financial incentive that the ACA will make available to providers that have been successful in this endeavor. This is expected to lead to intense competition among providers for providing preventive care.

MARKETING AUTOMATION: A COMPLETE BENEFIT PACKAGE FOR MARKETERS

Marketing Automation: Just What the Doctor Ordered

Marketing automation software (MAS) offers the provider and payer markets the ability to engage with and nurture consumers with the ultimate goal of achieving effective health management for the population. With this goal in mind, it’s the marketers armed with MAS who take center stage. For the payer and provider markets, it’s the onus of marketing to initiate personalized communications with patients on a regular basis.

Using MAS, marketers can launch engaging information campaigns and set up triggers to understand and segment the patient community. This helps them better target the consumer with information about preventive care and routine physical examinations. The payer market has typically dealt with group plans, and the provider market has traditionally not had the need to reach out to individual patients with a campaign. Considering the number of individual consumers the ACA is bringing into the fold, marketers need to have the ability to effectively communicate down to the individual level.

MAS empowers the payer and provider markets to better manage the velocity and scale of conversations with their consumers through its ability to automate marketing campaigns. Using data that is constantly coming in and being refined through triggers and analyzed, marketers can maintain a consistent dialogue and build personalized relationships through automated but targeted email programs, surveys and other retention programs.

The launch of the ACA has triggered many behavioral changes in consumers as the option to get individualized healthcare has made many consumers rethink their current group plans. MAS tools build individual personas based on the digital body language of consumers. This helps marketers identify and segment patients based on multiple factors, including demographics, health history and ongoing treatments, among others. This helps marketers design highly targeted campaigns for consumers.

The analytics in MAS integrate data from various marketing channels such as emails, social media, websites, print-based PURLs and blogs, to name a few. The MAS generates metrics that help marketers understand how specific marketing activities drive consumer behaviors, and thus drive revenue or achieve a reduction in emergency care visits to get federal incentives. The metrics are primarily classified into three categories: website metrics (such as click-through rate, bounce rate, conversion rate, traffic and keyword analysis), email metrics (such as open rate, email click-throughs, conversion and abandonment) and social metrics (such as impressions, frequency and engagement).

MAS has the ability to deliver personalized communications based on behavioral marketing data. Marketers can optimize the consumer acquisition process based on digital personas of the consumers. For example, if a consumer survey on preventive care successfully generates responses, the information gathered (such as name, address, email, health condition, communication preferences, opt-in, etc.) through the survey can be used to individually follow-up with those individuals that filled out the survey. MAS will segment the individuals based on their responses so that marketers can create targeted campaigns based on specific consumer segments and needs.

MAS becomes a critical tool to measure and attribute the return on investment (ROI) generated through each marketing channel. Marketers can identify which campaigns generate the most revenue or best meet established key performance indicators (KPIs) so that they can optimize their lead generation and campaign activities based

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The Affordable Care Act: Defibrillating the Healthcare Industry

on the results. The dashboard and reporting tools in MAS give a visual summary of campaign performance so that marketers can accordingly adjust budgets for marketing activities.

Preventive Care with the Oracle Marketing Cloud for Healthcare

The entire healthcare industry is wary of any communication that goes out because it needs to adhere to numerous regulatory compliance issues. Failing to do so can result in fines and lawsuits that stress the already tight profit margins. Due to these reasons, healthcare professionals have typically stayed away from digital communications. However, the ACA is already attracting millions of users to apply for health policies on the online exchange portal, thus putting pressure on payers and providers to rapidly become more tech-savvy and embrace a more aggressive digital marketing model to better serve consumers.

In this section we discuss the benefits of using a leading MAS solution, Oracle Marketing Cloud for Healthcare, for both the payer and provider markets. The following discussion illustrates result-oriented measures that marketers can take in order to drive their digital marketing campaigns.

Retention programs: Oracle Marketing Cloud for Healthcare offers a wide variety of templates to design newsletters, landing pages, and forms and surveys, among other customer outreach platforms used as an integral part of any marketing campaign. For example, providers can create a loyalty program that rewards patients that get regular health check-ups and maintain a healthy lifestyle by achieving a specific goal. This type of gamification also tends to appeal to a younger demographic. Similarly, payers can design a campaign to incentivize their prospects with giveaways to participate in a community program where they discuss the insurance plans that will benefit them the most for a given lifestyle. Additionally, they can create mobile applications that can be downloaded on smart phones and tablets. The applications can help consumers keep a tab on their healthcare-related activities in an intuitive way. Features that allow users to share their goals and achievements on social media are a popular way to raise awareness, get consumers interested in the services, and help providers/payers nurture and retain consumers for the long haul.

Email-bound campaigns: With the introduction of online healthcare exchanges, payers will need to cater to more single patients than groups of individuals. Oracle Marketing Cloud for Healthcare keeps track of each prospect or lead by collecting and storing their latest profile information. Thus, marketers can create highly targeted email campaigns to remind them of their visits to the doctor and keep a tab on their medical prescriptions. They can offer personalized logins to keep track of their health progress. Automation helps marketers stay organized and be consistent with their brand communications. Oracle Marketing Cloud for Healthcare offers lead scoring programs that enable sales teams to score leads based on predetermined criteria. Sales and marketing can constantly view the progress of the campaigns and track sales-ready leads through the entire buying cycle.

These are only a few examples of how marketers in the provider and payer markets can leverage the Oracle Marketing Cloud for Healthcare to create effective campaigns and track the ROI generated on their marketing efforts. As the Oracle Marketing Cloud for Healthcare tracks individual consumer behavior, marketers can view consumer profiles and determine the next best action to take in order to acquire, nurture and/or retain consumers. With Oracle Marketing Cloud for Healthcare, marketers can finally keep up with changing consumer behaviors and stay on top of their communications to drive business growth.

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Extended Coverage with the Oracle Marketing Cloud for Healthcare

In this section, we highlight some additional features of the Oracle Marketing Cloud for Healthcare that can drive increased customer intelligence for a marketer in either the payer or provider market.

Website tracking: Oracle Marketing Cloud for Healthcare offers functionality around driving member enrollment and health management. Depending on the influence stage, marketers can generate plans and create email campaigns that will drive consumers to their website. The website tracking feature in Oracle Marketing Cloud for Healthcare allows marketers to interact with consumers and send relevant messages to them in real time. It also allows payers to track enrollments so that they can intelligently drive engagement to their Web properties.

Social relationship marketing: Oracle Marketing Cloud for Healthcare captures social conversions by integrating data about owned and earned media on social networks. These advanced listening skills enable payers/providers to generate a high level of awareness about their programs and drive member registrations through social events such as webinars and podcasts.

AdFocus: With AdFocus, a payer or a provider can include paid media in its marketing campaigns. It ensures that the content generated by payers/providers reaches the right audience at the right time. Marketers do not have to waste time targeting their content to an unintended audience. AdFocus allows marketers to dynamically map the consumer’s digital body language to the paid content so that the content is also highly personalized. Thus, marketers can target brokers and nurture them to increase the enrollments in their system.

The Underwriting

Although marketing automation is not a magic pill, it is definitely a critical component of the treatment needed to survive and thrive in today’s rapidly changing healthcare marketplace. Never before has the importance of generating awareness, nurturing consumers and behavioral marketing been so high. Here we take a look at some of the risk factors for payers and providers that do not embrace a marketing automation solution.

Price pressure: Providers are under tremendous pressure to control their costs. Emergency visits for non-critical needs are a big drain on a provider as each visit requires arranging additional resources, including doctors, emergency staff, nurses, equipment and drugs. This disrupts the normal working environment and leads to overworked employees and stretched resources. In order to keep emergency visits low, hospitals have to constantly ensure they promote preventive care so that more patients take preventative action that will avoid unnecessary emergency room visits.

MAS makes it possible for hospitals to educate patients about the benefits of preventive care. Nurture campaigns constantly engage patients and drive awareness of preventive care. MAS also makes it possible to collaborate with payers that offer annual health check-ups for free or at minimal costs. As enrollments for regular health check-ups increase, it will eventually lower emergency visits. Thus, providers can use MAS to streamline their processes and avail of government incentives that reward providers that keep emergency room visits to a minimum. Fewer emergency room visits, preventive care and regular check-ups also reduce the insurance liability of patients. MAS also significantly reduces customer acquisition costs for health insurance companies, as discussed next.

High customer acquisition cost: Due to increased competition and diversity of the customer pool, there are several channels where a payer/provider needs to be in order to acquire new customers and communicate with existing customers to retain them. This raises the average cost of customer acquisition and puts more

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The Affordable Care Act: Defibrillating the Healthcare Industry

pressure on profit margins. MAS helps alleviate that pain by enabling marketers to be more targeted across different channels and optimizing their scant resources to get the best possible outcome. Instead of casting a wide net and hoping something bites, MAS brings accountability and intelligence to the customer outreach process and facilitates relationship-building with the consumer, which is critical in the healthcare market.

Increased competition: The payers/providers that refuse to use marketing automation to their advantage are essentially leaving money on the table. They may not be able to get more customers due to increased competition stemming from the ACA. Due to price pressure, payers/providers cannot simply raise premiums on their products and services as they could in the past. The only way to remain competitive is to engage with consumers where they are, build relationships and face the competition head on. To do so without a MAS will be at the cost of hemorrhaging money.

LAST WORD

As seen in this paper, the ACA has made the healthcare market rethink its business model. Health insurance marketers now have to run marketing campaigns targeted to the individual level across thousands and even hundreds of thousands of individuals. Marketers in the provider market have to attract and nurture patients to embrace preventive care and in so doing, increase their probability of getting ACA-based financial incentives.

Communication and relationships have become extremely critical for the entire healthcare market as the ACA disrupts traditional marketing models. The ability to have personalized digital conversions at scale and engage with an increasingly diverse customer base is daunting, but it is a critical need to be a successful healthcare provider or health insurance company.

The entire healthcare ecosystem can benefit from MAS by delivering the right message to the right people at the right time and through the right channel. Marketing resources are scant, and MAS helps companies transform marketing departments from cost burdens to profit centers.

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