Transcription:

Introduction: The following SHSMD Podcast is a production of DrPodcasting.com.

Bill Klaproth: This is a special edition of the SHSMD Podcast, Rapid Insights. I'm your host Bill Klaproth, and we're very happy to talk with 2020 SHSMD Bites, keynote presenters, Paul Crnkovich, Managing Director at Kaufman Hall and Associates and Dan Clarin, Senior Vice President at Kaufman Hall and Associates. And we're going to talk about their keynote, Winning the Modern Healthcare Consumer Candid Insights and Clear Action Steps. Paul and Dan, welcome to the podcast. So many hospital leaders are struggling to find clear strategic direction as a new normal takes shape during COVID-19 and your session features new research illustrating the Gulf between consumers and providers, insights on consumerism, and proven strategies for how providers can close the gap. So your session focused on five key areas, and let's quickly go through each one of those. Paul, thank you for joining us. And let's start with you. Your first point was understanding consumerism during COVID 19. Explain that to us.

Paul Crnkovich: Well, I think the important takeaway here is consumerism during COVID-19. It's just an acceleration of what we've been seeing for quite a while. And so, in fact, I think I would probably link those two together as understanding what do consumers want and how has that been impacted by COVID-19? And to put a fine point on it, it's all about making healthcare easy and say that because we are competing in the internet economy and we're all used to having things at our fingertips and particularly, even more so during COVID, right. We can't go out. We have to do everything online. Obviously things like Uber Eats and everything else has exploded to satisfy that demand when we can't go out and do it on our own. And that's been a trend impacting healthcare, but it's just really accelerated particularly as it relates to the big three of healthcare, as we talk about is access, experience, delivering a great experience, and providing good value.

And we can talk more in a moment, but I think the point about access is really, really important. And we've seen the explosion of tele-health and what I would call other quote, unquote, safer locations to receive care. And people stayed away from EDs and urgent cares for fear of COVID. And only now they started to come back into the doctor's offices and tele-health has really bumped up to be a, you know, a very much a mainstream now way to receive care. So, you know, if you think about it at the end of the day, we're all consumers. And so as you apply your basic consumer mindset to healthcare, it comes down to make it easy for me, healthcare is very, very complicated, make it easy and deliver on access, deliver on the experience, and deliver a better value that I can understand.

Host: So, understanding consumerism, make it easy, deliver on access and experience and pay attention to value, which was number two. And Dan, can you talk about that? What consumers want, which is easy access, good service, they want good value. I think you termed it the easy button. Dan, can you expound on that?

Dan Clarin: Sure. And as we think about the changing demographics, and the changing experiences that folks have outside of healthcare it's natural that those expectations will be translated into healthcare. In particular, the experience that that folks have kind of before, during and after their interactions with healthcare requires a lot more attention from providers. This is an area where everything has been made so easy particularly for younger consumers that are digital natives and simply kind of know their way around their phone and how to get what they want on demand. When they have an experience that doesn't meet their expectations in healthcare, they'll go somewhere else. They'll find someone who's doing a better job. There simply is not the level of patients for a clunky experience that there may have been in the past.

Host: Well, we all know what a clunky experience feels like and what a difference, a nice, smooth frictionless experience feels like. Dan, you also talked a lot about millennials and how they approach decisions differently. Can you tell us why we all really need to start paying more attention to millennials?

Dan Clarin: Well, the oldest millennials are nearing 40 at this point. And so they're, they've been interacting certainly with pediatric care for a number of years, but, but really are entering the phase now where they're becoming meaningful users of healthcare. And this is the largest population cohort. This is a cohort that has disrupted just about every other industry. And now is kind of set their sights on healthcare as an area where the access, the experience, the value simply just needs to be better. And so that change will work its way through the millennials are just the beginning. The, the generations coming after are even more tech savvy. And so the change will only accelerate over time.

Host: Right. You had a slide up that said, we need to understand them if we want their business. So it's worthwhile to really try to understand them. And then Dan, you went on to talk about disruption of healthcare and beyond in your agenda point number three, basically what I want when and how I want it. Can you talk to us about that?

Dan Clarin: Absolutely. Well, hospitals make up about six or 7% of GDP. And so when you think about the opportunity in healthcare for companies and private equity firms that are seeking growth all the time, it's got a huge bulls-eye on it. And whether it's Amazon or whether it's a retail focused provider of imaging services, everyone wants a piece of healthcare. And the angle that they're coming from is that consumers haven't been well-served in healthcare. And there's a huge opportunity for providers of services that are able to really tap into what consumers want in a way that traditional providers have been unable to or unwilling to right.

Host: Right. Make it easy for us, what I want when and how I want it. And you had a great picture of the easy button up there and think about some of the businesses that have made things easy for us, all of the in store pickup. Now all of these streaming services, delivering that entertainment right into our living room, think about Amazon and purchasing goods. So think about how those companies have made our lives easier. And then Dan number four is healthcare delivering against expectations. And have we moved closer to meeting those expectations during COVID, and how has it forced us to do so?

Dan Clarin: Well, I think it's shown that we can move when we need to. But again, it's been in our view, it's been reactive but we have shown the ability as an industry to actually move when we need to toward tele-health toward adopting digital platforms that allow folks to actually interact with us when, when they can't come to us in person, and to address pain points by way of keeping folks safe during COVID through different means and different ways of doing business than we've had in the past. So, I think going forward, the challenge is that this momentum that we've created and the ability that we've shown as an industry to react to certain needs related to COVID, can we continue with that? And can we more proactively address the pain points that consumers have, whether it's in-person physical access, whether it's virtual access, whether it's price transparency you know. Whether it's the experience that we have in the waiting room, all of these things are important, and can we be more proactive rather than kind of reacting to a generational event in COVID-19?

Host: Yeah Dan, that's a great thought, be more proactive, so be more prepared now for what lies ahead rather than being reactive and trying to catch up to what is happening in the moment now. So Dan and Paul, you laid out a great agenda for us, understanding consumerism during COVID-19, what consumers want disruption in healthcare and beyond is healthcare delivering against expectations. And you kind of wrapped it up for what we need to do moving forward with building blocks for success. Paul, you talked about access, experience, and pricing, as we talk about those building blocks, please explain those to us.

Paul Crnkovich: Sure. And just to elaborate when we say access, you know, one of the old school ways of thinking about access and healthcare was, you know, time to the next appointment, right? That's kind of the traditional metric, but it's obviously way, way beyond that. And so access is about modalities or different sites of care. So think of this as maybe your ambulatory network, and it's having all different types of modalities available, but then access to information to scheduling the softer stuff that enables you to actually get an appointment or actually get care. So access broadly defined, but thinking less about the buildings first, but rather, what's the need I'm trying to solve for? And then how do I best deliver that? Whether it be tele-health etcetera. And again, remembering that there's no monolithic consumer out there, you're talking about different segments and people will have different needs. So access broadly defined that's the front door of the health system.

The experience part is a reference, it's really about taking a page out of the hospitality industry. You know, what does Disney do great? What does the Ritz-Carlton do? It's all about understanding every step of the consumer journey and in healthcare that historical models are built up around hospital operations, right? And that's about improving the efficiency of how we operate internally, but not is that actually meeting the needs better of our, of our patients and our potential customers. And the whole point of that is if you deliver against those patient needs more successfully, you're going to attract and retain them. It doesn't mean you give up your clinical quality by any means. It just says we need to have a more of an external focus. And the last part is, is really about value and pricing is kind of the placeholder there because it's been very topical on the CMS rules and regs, but again, high deductible plans for those commercial payers, they're looking at how much it's going to cost to get that image done.

That x-ray, that lab test. These are the things that hit my pocketbook today, even more so important. I think because of the COVID impact on our financial health as a nation. So delivering value and understanding how you can deliver value differently in prices, part of it that those are the three building blocks, access, experience, and value sort of built on the foundation of insights. As Dan said earlier, if you want to serve your customers better, you better know who they are and what they want. And that's what healthcare can do a much better job at that.

Host: So, our three building blocks that we need to pay attention to access, which is basically the front door experience, delighting your customers to build loyalty and then pricing drive growth through value are three building blocks for success. And Paul, you talked about the now near and far roadmap. What is that concept?

Paul Crnkovich: Well, the now near and far roadmap was you know a framework that we borrowed from Ford Motor Company. And it was this idea of, Hey, we're all focused on now in any business is, right. I got to have in my annual plan, but you know, it's not enough just to solve for today. It's sort of a discipline that you build into your planning process. And a lot of actually healthcare systems are now starting to do this, which is, you know, in their strap plan saying, well, what does the far look like for this key issue today and forcing kind of rethinking of what has to happen now in order for us to meet that longer-term goal? I think with COVID-19, you know, it's almost like, you know, far is like tomorrow, right? So it's really about understanding if we want to be great and if we want to get there fast, what would that look like?

And then how do we actually accelerate that path to get there is another concept of, you know, this idea of incremental change isn't enough. And we have to stop measuring success as how far we've come from where we started, but rather what's the gap to where we need to be, because it's that gap where third special providers, etcetera, Amazon's of the world, that's where they're seeing opportunity in daylight. And that's where they're going. So we can't say we're better than we were. We have to say, gosh, how far do we have to go? And how do we accelerate? How we get there?

Host: So again, looking forward to build that access and experience, and Paul, you also touched on the customer value equation. Tell us about that.

Paul Crnkovich: Well, it's literally, if you open any marketing textbook, you'll say, well, how do you define value? And it's very simply an equation. And the value that you or I perceive is going to be some combination of benefits that I'm buying and the price that I'm paying. So you may value a Mercedes. You may think it's a good value because it's engineering and it's styling and it's reliability for the price you're paying, that equation works for you, where someone else may have you know, that's why you have segmented automobiles and everything else out there. But healthcare is the same way, and that as you think about, you know, particularly in the shoppable services where some are more commoditized, if it's an MRI, many people, I mean there are differences, but many people will say, hey, an MRI is an MRI.

Why can I get one for 500 bucks at this place that provides me a great service. And it costs me $2,000 to go to a hospital outpatient department and navigate my way through the bowels of the organization. And they're saying that that value doesn't line up. So understanding value is simply says, people are consumers when they become price aware, they're starting to make rational decisions and things like access, the quality of the experience, how convenient is for me, those are all entering the picture as they're making healthcare decisions. So as we think about changing our business model, let's not focus just on how much are we charging, but rather what's the bundle of benefits that differentiates us. If we have a great brand name and it's meaningful for an MRI, terrific. But chances are that brand name may apply very, very highly to a specialized inpatient procedure, but a lot less when it comes to a more commoditized service. So it's just doing that discipline that every other consumer driven company goes through now applied to healthcare.

Host: So, you and Dan have done a great job of hammering these points home, make sure you understand consumerism, pay attention to access, experience, and pricing and above all else, make sure you're delivering what consumers want. And then at the end of the session, someone asked what I thought was a good question. What we just talked about, access, experience, pricing, consumerism, giving the people what they want. What is the biggest stumbling block to achieving that? Dan, let's start with you.

Dan Clarin: Sure. The number one barrier that we've seen is a lack of kind of top-down leadership on this issue of really reorienting the organization to be focused on the consumer. And this requires the CEO to believe in it. It also requires there to be a voice in the C-suite that's operating kind of on behalf of the consumer, whether it's the chief strategy officer, chief marketing officer, even a chief consumer officer. Really putting the consumer at the center of what we do in terms of strategic planning, in terms of incorporating real insights on our local consumers, into the decisions we make, that's been, the biggest barrier that we've seen, is kind of a lack of top-down leadership on really changing the orientation of the organization.

Host: So, it sounds like you're really not going to get anywhere unless the top leadership really understands this shift towards consumerism. And Paul, if you could please add your thoughts to this.

Paul Crnkovich: Two of the comments, one to build on Dan's point. And I mentioned this before, but, but consumerism is a word actually only used in healthcare. And it's kind of an interesting evolution because if you go look at a real consumer driven company say at Nike or Ritz-Carlton, or but one of those types of entities, they don't say what's my consumerism strategy. It's just what they do, right? It's an orientation it's what does that customer need? I'm trying to solve, you know, Amazon, Bezos, doesn't say, how do I compete against Walmart? It's a mindset that says, how do I anticipate and deliver what the consumer's going to need? Or does he realize he or she needs and do it better than everybody else? So it's this idea of getting out of the mindset of consumerism as a thing that I'll tinker with this dial and move this needle over here. But rather it's really getting outside yourself and saying, I have to compete and win for this business. I have to attract and retain customers better than anybody else. And if I'm not getting outside of my business model of thinking about that seriously, on an ongoing basis, then I'm going to lose. And that's just a mental mindset that has to happen.

Host: Remember what Paul just said there, you have to achieve a mental mindset of attracting and retaining customers on an ongoing basis. If you're not constantly thinking about that, you're going to lose, remember that. And that segues perfectly Paul, with my next question, you had a slide up there with this great quote, even during a crisis, CEOs must focus on larger strategic issues and attitude of let's get through this first is not the way to go. So a CEO, that's saying, Hey, let's get through COVID and Hey, we'll worry about that stuff later. You're saying that is not the right way to think about that. Is that correct?

Paul Crnkovich: That's correct. You know, that goes out of the now, near far by forcing yourself to get beyond the annual plan, because, you know, as we're thinking about some of these consumer driven changes, there are multi-year initiatives that have to start today. And unless you've done the hard work of saying, what does that future vision look like? What does this mean from a rethinking? Even the word ambulatory is kind of a funny word, right? Because no consumer wakes up in the morning and says, gee, I have an ambulatory need. But I understand where it comes from and that's fine to use it because people understand, you know, intuitively, but it's starting with, what does that have to look like? And then backing up to say, how am I going to get there and get there quickly?

Host: Yeah. Get there quickly. That is key. Well, the keynote Winning the Modern Healthcare Consumer Candid Insights and Clear Action Steps with Paul Crnkovich and Dan Clarin from Kaufman Hall and associates. Keynoters at this year's 2020 SHSMD Connections Bytes conference, guys. Thank you so much. This has really been informative and interesting. Paul and Dan, thank you again.

Dan Clarin: Thank you.

Paul Crnkovich: Thank you.

Host: Well, another great keynote from another great conference. This year's 2020 SHSMD Connections Bytes conference into learn more. Just go to SHSMD.org/education/SHSMD-connections-bytes. And if you found this podcast helpful, and of course, how could you not? Please make sure you share it on all of your social channels and please hit the subscribe or follow button to get every episode. This has been a production of Dr. Podcasting I'm Bill Klaproth, see ya.