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RED HOT Contributors


‘Consumer Value’ VS. Value-Based Care… Healthcare’s Critical Inflection Point


As Stephen Klasko, CEO of Jefferson Health puts it:“We’re in a once-in-a-lifetime metamorphosis in going from hospital systems to consumer health providers.”

And if you’re not catching his drift, just take a look at Jefferson Health’s 4-year growth via acquisitions, partnering, investments, and long-term consumer strategy. They are clearly moving full steam ahead to meet and attract consumers, most especially millennials head-on.

While a number of hospital CEOs are watching their profit margins shrink, hesitating to move into action and hanging on to their jobs (for dear life), Steve and other ‘bold expansionists’ recognize growth opportunities.

By smartly evaluating and pouncing on them, we will soon see that the next 12-36 months could well position and propel industry leaders for the next generation.

And I’m not only talking about health systems and hospitals.

Just look at payers such as United Health Group. Not only do they have the largest healthcare IT company in $86B per year Optum – but that ‘subsidiary’ has branched out into PBMs, surgical centers, family care, telehealth, urgent care and healthcare consulting.

Then there’s CVS and Aetna – a unique vertical play that spells out a possible new workaround through the medical-loss ratio cap, while tying together PBMs, retail pharmacies, and health insurance.

We’re also seeing investment in surgical ‘Centers of Excellence’ – as health systems and hospitals will eventually seek to carve out a non-payer, direct contracting angle for future consideration with self-pay business consumers. The idea of going direct for specific surgical procedures really started with Wal-Mart, but rest assured that we’re going to see more pooling of smaller self-insureds for cumulative relationships and benefits.

Then there’s Amazon; and we can only make best guesses as to what type of action they will take, and effect they will have. Whatever it is – with Jeff Bezos you can bet it will involve disruption and leverage.

Through all of this one thing is clear – the smart players are seeking growth to target, engage, and capture more of the patient journey – and those well-vetted, stronger payer-profiled, and risk-mitigated patients within.

I’ll even take it one step further.

We’re just now entering into a new dawn of strategy, operations, and acquiring of digital marketing and content talent. This is specific per ratcheting up proactive competition for newly-acquired and long-term sustained patient loyalty.

It used to be just a few big players such as Cancer Treatment Centers of America were actively investing large pools of money to build healthcare service ‘consumer’ brands and capturing selective patient base. But that is all changing.

My strong advice would also be to look to A.I. and telehealth – not only for clinical care, but for ‘Tip-of-the-Spear’ marketing – as I stated in my recent keynote at VSee.

And I wouldn’t count IBM Watson out. Watch closely in the area of smart advertising and marketing; and how it can and will be applied to healthcare. Watch on how they may begin to shift over the next 6 to 12 months.

On that note, I recently interviewed Paul Matsen, Chief Marketing Officer for Cleveland Clinic. He will be on an upcoming episode of my growing podcast RED HOT HEALTHCARE. You talk about an organization that has kicked it into high gear…Holy Cow!

Cleveland Clinic has created the largest healthcare content juggernaut.

They now have the #1 viewed healthcare blog at 4.5 million visitors per month. Plus, they have grown from a team of 3 to 25 – just in developing, publishing and tracking smart content. Paul and his team are absolutely brilliant, full of talent, and extremely well-prepared for consumer growth..

The opportunity for attracting and acquiring larger pools of patient loyalty, both within their physical service area, then in-state, out-of-state, and out-of-country has not gone missed.

So we’re clearly moving into a more consumeristic and patient-centered system. And the focus on growing through valuing, engaging and acquiring patient loyalty is the exact right strategy.

Yet even with this growth, healthcare companies will increasingly be faced with the issue of PRICE.

In my past article and podcast show on value, I’ve reflected upon the critical inflection point, now reached in the history of our healthcare system. A point concurred upon by LeapFrog Group’s CEO Leah Binder in our recent interview, where she stated clearly:

The advent to high-deductible plans has changed the market; and it has clarified the question of who’s actually paying the bills.

Providers are much more cognizant of the fact that the patients are actually paying the bill for this visit, service, or this procedure.

They know this because patients are asking questions that they’ve never asked before, such as..

“Doctor, I know you told me I need an MRI…but how much will it cost?”

And that’s all a brand new thing; and it’s changing everything in healthcare. Because suddenly there’s an awareness that what providers do, has to appeal and give value to the patient directly.

I use the term ‘critical inflection point’ to describe two fundamental forces that have clearly run up against one another.

1. The NEEDS of healthcare sector and its underlying industries — Which is primarily to make and sustain profitability.

2. The NEEDS of consumers who use the health system – To receive high quality, safe, and affordable care.

And this is where we run into what is now, and will largely remain the biggest elephant in our healthcare crisis, because:

No matter how much the Triple Aim measures and value-based care incentives help improve quality, safety, and care outcomes…

It is still not satisfying the need of LOWERING PRICES to affordable consumer levels.

The Key Equation for Consumers:


Better quality…better experience…more personalization…greater technology…better outcomes…pricing transparency…patient portals…mobile health data…engaging with more touch points across the patient journey.

All of these facets satisfy the numerator portion of the consumer value equation (WHAT I GET). But note…there’s no mention of the denominator (PRICING). Even when we hear all the talk about lowering costs, there is no carry-over like in normal consumer markets to pass on pricing benefits to the consumer.

And this is no mistake.

Drug companies, providers, and payers are quite concerned about healthcare and political tracks of health reform becoming overly consumeristic. This begins with a loss of predictability on payment from third parties.

Perhaps the biggest future consideration for many healthcare providers may be related to something not yet strongly considered – namely competitive ‘equivalency’.

That is, when those companies who have successfully stayed the course in the future tightening value-based care environment, will have either far more consumer-realized or perceived parity across the left side of the equation.

As with any other industry where consumers are paying more of their dollars for equivalent products and services…PRICE can, and will often be the determining factor for making a buying decision, and to whom that buying decision is made with.

This cannot be more true than in healthcare. The largest employment sector, which simply cannot ‘afford’ to remain unaffordable over the long term. This is especially true when we’re talking about skyrocketing first care consumer dollars – with no clear sign of slowing, much less decrease.

But I carry optimism. There are very smart leaders throughout healthcare – many of whom had careers outside of healthcare in other true consumer industries. As we gain a new era of smarter, more price-savvy millennials, I expect that the same aforementioned ‘bold-growers’ will find ways of integrating competition through lower price points.

Healthcare and its underlying industries have had an extraordinary opportunity to grow for nearly half a century, largely due to a system where there was very little cost or quality controls. So long as third party payers picked up all, or nearly all the bill, healthcare remained complex and largely untouched on pricing.

But those days have come to an end. Now it will be up to those who can creatively find new and innovative ways to drive through the critical inflection point between profit and affordability over the long-term.

As Sean Connery once said: ‘A little revolution now and then is a good thing.’


‘Dr. Steve’ Ambrose is a consumer strategy leader, business development expert, healthcare provider, innovator, multi-patent holder and health industry influencer.

He is currently reviewing opportunities work full-time in a team leader or consulting capacity.

Additionally, he’s a powerful speaker for a number of healthcare issues, challenges, and unique solutions.

His diverse background and skills include a past career in chiropractic serving almost 10,000 patients over 20 years. Additionally, he patented unique software for healthcare subrogation; and went on to lead strategy for a national consumer leads organization.

Earlier this year, he created the growing Red Hot Healthcare podcast. Nearing 50 shows already, his guests and listeners are many influencers and healthcare industry leaders – from the most well-known companies and organizations.

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