“How to Avoid Agency Growing Pains,” published in the June 17 online edition of Advertising Age, is surely one of the finest business articles I have come across recently. Sharon Napier, CEO of Partners & Napier, offers fresh, smart advice in simple English. While the article is directed at agency managers, there are good takeaways for clients as well. What business cannot benefit from focus, passion, culture and an eye to financial performance? But read it for yourself to experience how Napier frames these issues. I was particularly struck by her paragraph titled “Build the plane while flying it.” To me, this is a call to action for those of us who find ourselves with fewer resources than we believe we need to get the job done, or who wonder why our competition is able to capitalize on the same great ideas we had but failed to execute. It is a reminder that sometimes “ready, fire, aim” may work better after all.
Archive for June, 2009
A guest column in Financial Times last week by luxury brand experts Jean-Noel Kapferer and Vincent Bastien of the HEC School of Management in Paris offers interesting “anti-laws” of marketing, chief among which is “Do not pander to consumers’ wishes.” Using case studies, Kapferer and Bastien convincingly demonstrate that a strictly customer-centric approach leads to products with built-in obsolescence and advocate that starting with a vision, realizing that vision and “educating elite clients who become role models” is better. Farfetched as it may seem, I see parallels between this principle and the way marketing and communication consultants should approach working relationships with clients.
I believe it is imperative for consultants to understand and make a distinction between client wants and needs. For example, a client may want a strong direct-to-consumer component in their marketing program, when the consultant determines that the client has yet to establish the brand firmly with the professionals. A client may want a new campaign to show management that something is being done about falling sales, while what is really needed is more effective sales training and sales promotion tactics. Very often, the consultant not only has to identify and separate wants from needs and convince the client to focus resources effectively, but also help the client see the distinction as they build internal consensus among marketing, sales and executive teams. All of this does not take away from the role of market research, because market research is a critical source of understanding and insights based on which visions and strategies can evolve. But, as the authors put it, “too much listening mitigates against the requirements to surprise and stand apart.”
And if you still believe that there is little correlation between luxury goods and consulting services, consider that consulting services are a luxury to many clients today as they juggle tighter budgets. The perspective that a consultant can bring is the added value that clients are looking for.
As legislative debate on healthcare reform intensifies, and as the powerful American Medical Association (AMA) voices its opposition to the government-sponsored insurance plan, I find it instructive (and reassuring) to consider the different perspectives offered by a recent series of editorials in The New England Journal of Medicine. For example, in an online editorial entitled “Achieving Health Care Reform—How Physicians Can Help,” Elliot Fisher et al. suggest that “perhaps we can shift our focus from the conflict over whether a new public plan should be created to a more constructive insistence that all health plans, whether public or private, focus on the development of professionally led, integrated systems.” The authors build on a report from the Institute of Medicine, “Crossing the Quality Chasm,” to implore physicians to build a shared vision that embraces “a new world of coordinated, sensible, outcome-oriented care” and, just as importantly, suggest that a 1.5-percentage-point reduction in annual spending growth is eminently achievable.
Two editorials propose different, but not mutually exclusive, approaches to funding universal health insurance. In “Finding Money for Health Care Reform — Rooting Out Waste, Fraud, and Abuse,” John J. Igelhart cites astounding statistics (e.g., $72 billion or 4 percent of total spending in “improper payments,” of which 50 percent went to providers, suppliers and other Medicare and Medicaid vendors) and warns that this is due at least in part to inadequate funding to combat waste, fraud and abuse. He also warns that there has been a recent increase in organized crime in the healthcare sector due to (a) relatively less severe penalties for healthcare crimes, (b) a lower barrier to entry, (c) easily replicable schemes and (d) a perceived lower risk of detection.
Jonathan Gruber’s “A Win-Win Approach to Financing Health Care Reform,” in which he proposes excluding elimination or limitation of the income-tax exclusion on employer-sponsored insurance, including several approaches to tailoring the program to varying income levels and insurance costs, will no doubt receive a mixed bag of responses.
Arnold Milstein’s “Ending Extra Payment for ‘Never Events’—Strong Incentives for Patients’ Safety” calls our attention to unthinkable negligence and a broken reward system, and makes an effective argument for the inextricable link between safety risks for patients and financial risks for the health system.
Not surprisingly, in “A Strategy for Health Care Reform—Toward a Value-Based System,” Michael E. Porter articulates a vision for “a true national health care strategy centered on value.” He argues that a fundamental flaw in today’s health insurance competition is the zero-sum approach preoccupied with shifting costs (e.g., selecting healthier patients and negotiating discounts) rather than one that competes on value. Porter advocates a continuing role for the employer as a stakeholder in promoting wellness and for the employer’s ability to foster competition more effectively than government can. He also suggests that the current system of tax deductions for health insurance is inequitable. His strategies for reducing insurance costs include spreading the risk through pooling, fostering value-based competition, and a reinsurance system to mitigate the cost of insuring high-risk individuals. He also suggests income-based subsidies to help lower-income people, and bringing in new revenues (and thus reducing premiums) by mandating insurance for younger and healthier people.
Even more important is a restructuring of the delivery system. “This is where most of the value is created and most of the costs are incurred.” The logical beginning is outcome measurement, which Porter suggests should be mandatory, should emphasize the full cycle of care for a medical condition and not episodic intervention and should be multidimensional—going beyond survival to degree of recovery, time needed for recovery and sustainability of recovery, as well as the discomfort of care. Such outcome measures should replace process measures (e.g., compliance with practice guidelines). He points out the inadequacies and inequities around prevention, wellness, screening and routine health maintenance services. He too calls for integration of services around the patient’s needs, “over the full cycle of care for each medical condition.” This focus on value to the patient must be reflected in the reimbursement system and provide the basis for competition for patients. Along these lines, rather than simply automating current practices, electronic medical records must support integrated care and outcome measurement if they are to bring real value. The final component is consumer involvement and in particular patients taking individual responsibility for their own health, which will improve with the emergence of the new, integrated and value-driven delivery system.
Can medicine, science and business overcome the resistance to change to bring their collective ideas and shared vision to fruition? Or will the AMA set the tone for the next few months or weeks?
Increasingly, clients and colleagues in healthcare communications have been posing questions about the balance between online and offline. And, certainly, the demise of newspapers further highlights a general anxiety and uncertainty about the future of print. Last week, previews of the results of The Future of Advertising project, conducted by the Wharton School and the Advertising Research Foundation (ARF), offer reassurance to print and TV media. Here are some highlights from the 21 papers to be published in ARF’s Journal of Advertising later this month, as summarized in the June 1 issue of Advertising Age.
- “22% of word-of-mouth conversations were sparked directly by advertising.”
- 30% of online buzz was generated by ads.
- “Print is more effective than TV or online at creating purchasing intent.”
- “Print advertising produces a higher sales lift per dollar spent than TV.”
- “Search generates a higher lift in offline sales per consumer exposure than display.”
- “Display and search used together produce a higher lift than the continued effects of using either separately.”
From my perspective, these findings reinforce what healthcare marketers have always known (though some of us are more diligent at applying it): that a thoughtful integration of different communication tools across multiple channels is key. For example:
- Online and offline communications reinforce each other. Neither one stands alone. For those of us looking for guidance on the appropriate budget allocation, data is not available at this time but there are ongoing studies.
- Recognizing that the various media (and I would include the myriad of tools both conventional, such as direct mail, conventions and education, and new, such as social media) must work together, the time to strengthen and unify your brand strategy is now. Now more than ever, healthcare marketers must see to it that their agency teams are working together and creative executions are synergistic.
- Speaking of branding, don’t forget the customer and that branding is all about building relationships with your customers. “A brand is the sum total of a company’s conversation with society,” said Clive Chajet in his book, Image by Design.
As an example of integrated communications at work, I’d like to point out a clever, effective but very disciplined use of viral communications in the life science research space. Bio-Rad Laboratories, which markets many products to young PhD-level researchers in biology and medicine, was the first to launch tongue-in-cheek music videos to promote their products. The success spawned many imitators. Many of these imitators have well-executed music videos, but I am not aware of any that has kept it up and made them part of the brand. Take a look at Bio-Rad’s latest creation and I think you’ll agree with me that—at least for the foreseeable future—music videos are part of their brand.
The May 7, 2009, release of Opinion of the State Council on the Support and Acceleration of the Development of Traditional Chinese Medicine culminated recent statements from China’s Ministry of Health and nationwide activities to promote traditional Chinese medicine (TCM). The position paper offers insights into the current standing of TCM in China and its expanding role in China’s healthcare.
Contrary to most Westerners’ perception, TCM plays a relatively minor role in the average Chinese citizen’s life today. Just as in the West, there is some level of recognition of its potential value, but when it comes to medicine, most Chinese people look to the West. In fact, in recent years, there has been vigorous debate about its future in China.
The fact that the position paper originated from the State Council underscores how important TCM is to the government. The policy recommendations reflect the fundamental principle that TCM and Western medicine are of equal importance.
Updated pricing and government subsidy to support the transition. The government plans to evaluate and update fee schedules for TCM services (e.g., patient consultation, prescription, pharmacy compounding) by qualified personnel, with the goal of bringing prices to a level that adequately reflects the value of TCM. TCM will systematically be included in formularies. Furthermore, the government plans to step in with subsidies while the market adjusts to the new (and higher) prices.
Maximizing the value of TCM in preventive medicine. Conventional wisdom in China is that TCM is most valuable in systemic adjustments that can improve health. Toward that end, the paper recommends establishing the Chinese Medicine Preventive Medicine Services Organization, which will mandate qualification and certification of professionals and service standards as well as provide leadership and management focused on the use of TCM in health maintenance.
Incorporating TCM in expansion plans for healthcare facilities. The policy paper calls for financial support to encourage the inclusion of TCM in more than 20,000 new healthcare facilities in rural, urban and suburban communities. Specifically, one fifth of healthcare facilities being constructed this year will be allocated to TCM.
Investing in training and development. According to Vice Minister of Health Wang Guo Qiang, the bottleneck in the development of TCM lies in the scarcity of trained professionals. The plan will address three areas in education: (1) recruitment of students and improving the quality of incoming students; (2) reviewing and revising the curriculum to better match real-world healthcare needs by emphasizing clinical practice rather than theory; (3) ensuring that TCM students have a rich fund of knowledge that can be drawn upon in clinical practice.
This interest in TCM is not new in China. The push toward improving manufacturing quality and applying a level of regulatory rigor and demand for efficacy and safety data comparable to Western medicine has been going on for some time. With the position paper from the State Council, however, there is now a mandate to advance TCM. Let’s hope this translates into innovations that the whole world can benefit from, particularly in preventive medicine.