Change from a Healthcare Marketing Perspective, Part 2

Healthcare marketing is changing dramatically. PTP is looking at what those implications are for marketers in that field in a multiple-blog post format.

You can read Part 1 here: Change from a Healthcare Marketing Perspective

Part 2: Upside and Downside of Cost Control

The unseen levers of the Patient Protection and Affordable Care Act (PPACA) are the reimbursement models that promise to create efficiency and improved care.

Hospitals that have above-market reimbursement models from private pay and or Medicare Advantage will have two options—become more efficient while improving on care to participate with an expanded payment base or ignore the changes and depend on private insure and the kindness of major gifts.

Initially, insurance companies will feel the brunt of healthcare evolution and begin to mandate better efficiencies from hospitals. The phasing out of Medicare Advantage will erode a significant profit pool and force insurance providers to take a harder look at their current payment schedules.

Maggie Mahar highlights a quote in her healthcare reform blog post from a MedPac study:

Hospitals with the greatest resources are less aggressive about containing costs and therefore have the highest Medicare ‘losses’ (the difference between Medicare rates and a hospital’s average costs).

Mahar references other insights that discuss the pricing power of marquee hospitals which have historically reduced the willingness of insurance companies to negotiate more aggressive payment models.

PPACA is intent on eliminating pricing premiums and will reward those that are able to deliver reliable and quality driven healthcare in a cost effective environment. Providers that provide clinical excellence and cost control will experience significant growth and opportunity.

Look for hospitals that may not have the high end cache to start gaining more market share and be more competitive than historically have been.

Flickr photo courtesy of ordinaryfool