While the next chapter in health reform plays out in DC, the marketing departments in healthcare organizations are busy.
Missions matter. Scale matters. Scope matters. Margins matter. But brands that carry baggage, confuse or send the wrong messages matter now more than ever. Case in point: Obamacare, the moniker for the Patient Protection and Affordable Care Act, became the brand for health reform legislation about which opinions remain strong and divided. In one clever word, it captured sentiments for and against a law that the majority, to this day, have not read nor understand.
Or the parlor game being played in bars and living rooms about the impact of the President’s actions and pronouncements on brand Trump. Some speculate the family’s brand has been enhanced by its entry into the political realm and others think it harmful. Time will tell.
Brands are powerful for good or ill. Academicians have shown that a brand that’s associated with positive attributes valued by trading partners and customers helps an organization fend off competition and protect its turf. Economists associate a strong brand with a balance sheet in which strong brands accountfor one-third of the organization’s enterprise value. Lenders, investors and dealmakers consider the brand value in valuations, often hiring outside experts to affirm or challenge an organization’s declarations about the strength of its brands and reputation.
In most business schools, branding is taught as an element in the marketing curriculum. Content is primarily built around case studies of brands gone sour, over-night successes, and brands that have withstood the test of time. Students dissect the world’s most powerful brands (See Fact File) and the erosion of brands once considered impenetrable. The travails of Kodak, Sears, and more recently United Airlines and Uber are staples in B schools where brand equity measurement is taught as a sophisticated analytic function.
Healthcare investments in branding are significant. In the past year alone, the branding game in hospitals has seen at least 200 change names to draw attention to a family brand (Ascension, Adventist, Michigan Medicine, et al), a focus on “health” (LifePoint Health, Lee Health, HCA Health et al) or a transition from a hospital designation to a health system. (Carolinas Health System, University of KS Health System, et al). Ditto branding efforts among insurers and population health management organizations seeking differentiation is likewise active space: UnitedHealth Group promotes its Optum brand aggressively, Healthways rebranded itself as Tivity Health earlier this year and so on. Acquisition and consolidation spawns new brands: Envision is the new umbrella brand for recently merged American Medical Response, Evolution Health and Emcare, Change Healthcare is the new brand for the combination of Emdeon and McKesson Technology Solutions and many more. Among device and drug manufacturers, branding of individual products is a perpetual challenge for product managers while corporate marketing departments seek to position their institutional brands favorably. Johnson and Johnson, the only healthcare brand among the global top ten, monitors and protects its brand equity globally investing significantly to reinforce its ownership of J&J Band Aids and J&J Baby Powder which convey its kinship to moms and kids. Among suppliers, there’s constant attention to rebranding: the troubled revenue cycle manager Accretive changed its name to R1 RCM Inc. after an infusion of capital from Ascension Health, Content Media changed its name to Outcome Health to reflect its new focus and so on. And among professional services firms—architects, lawyers, accountants, consultants—protecting brands that convey experience, credibility and trust is HUGE. Their ability to attract and keep talent client hinges largely on the reputation of the organization and studies showing that 80% of their annual revenue growth coming from current clients causes firms to jealously guard their brands.
Given market consolidation, social media attention, intense scrutiny from news organizations and increased pressure on healthcare organizations to deliver more value to trading partners and customers, brand management is more important than ever. Changing a hospital’s name to medical center or health system or adding health to a name doesn’t impact its value unless accompanied by changes in how it operates and where it makes its capital bets. Running ads to tout a drug’s efficacy does not offset social media buzz about a manufacturer’s price gouging. Advertising insurance plans that are affordable means little if members can’t get appointments to see providers. Touting a professional services firm’s reputation, analytic tools and experience does not offset what former associates convey about its culture, capabilities and depth of talent.
If patient outcomes, member experiences or clinical trial results are consistently disappointing or below par, it chips away at a brand’s value. If leaders in our organizations mislead, bully or misbehave, it’s not a secret and brands suffer. If financial performance falls short of expectations, capital projects are delayed or exceed budget or expenses appear excessive, brands take a hit. And when brands take a hit, the confidence of suppliers, customers and employees slips.
There’s no shortage of data and Top 100 lists in our industry. Invariably, each healthcare organization cherry-picks the lists that are flattering and discredit those that exclude. But it’s a new day for branding: lists based on independent, objective comparisons of performance are more readily accessible and widely used. The Federal Trade Commission is more aggressively scrutinizing advertising claims to assure truthfulness and lawyers are chasing opportunities to challenge corporate misconduct more frequently. Media coverage about companies that alleged to have misled is ripe for attention putting brands at risk: consider recent coverage about Uber, Avon, Volkswagen, Wells Fargo, Valeant, Theranos, Mylan, Turing and others. It’s little wonder independent brand value measurement is a growing industry.
It seems to me every organization in healthcare needs to take a fresh, objective look at its brands. A few thoughts:
· Boards should insist on hard data to validate attributes most closely associated with the organization’s reputation among its trading partners, customers, former customers and employees, and the public. And organizations should assess the legal protections of their brands to protect against impairment of an important intangible asset.
· Boards should insist a brand value measurement be done independently and annually so as to protect the integrity of the process and protect brand value. Verification of promotional claims and employee views about their leadership and culture should be a part.
· The professional services firms that are engaged—legal, accounting, architects, consultants, et al—should be required to supply their organization’s brand and reputation study as measured by current and former associates, clients and trading partners. In many professional services firms, client experience is overstated, the expertise of professionals is exaggerated, and analytic tools are not verifiable or evidence-based.
· A social media strategy and close monitoring of online buzz around an organization should be a perpetual high priority in our organizations.
· Budgets associated with brand measurement, management and protection should be discreet reflecting the value associated with strong brands.
· And the desired values and attributes associated our brands need to be widely understood and consistently reflected in our organizations: no amount of advertising or marketing can overcome claims that are discredited, leaders who are distrusted and culture’s that put sales and profit above all else.
In our industry, we can ill-afford to believe our own publicity. We cannot declare we’re in the health business if we’re still operating otherwise. We cannot call insurance accessible if it’s not affordable. We cannot tout the safety of our drugs and devices if they’re priced out of reach or marginally effective. We can’t say one thing and practice another.
Missions matter. Scale matters. Scope matters. Margins matter. But brands that carry baggage or send the wrong messages matter as much if not more. It is the integrity of our leaders, the veracity of our claims, the effectiveness of our performance and trust of our trading partners and customers that reinforce our brands. It’s time to step back and rethink branding in our organizations.
P.S. Live Webinar: Wednesday, May 17th | 2:00 PM ET “Health Reform Round Two and Megatrends: What to Watch and How to Prepare” To register, go to http://thinkrevivehealth.rallypointwebinars.technology/local/rallypoint/webinar.php?id=132&source=invite1
Also, a probing article in JAMA Internal Medicine last week is worthwhile reading: People living in Summit County, Colorado, in 2014 had a life expectancy 20 years longer than those about 420 miles away in Oglala Lakota County, South Dakota ― the widest gap in the U.S., according to a study from the University of Washington’s Institute for Health Metrics and Evaluation. The 66.8-year average life span for those living in Oglala Lakota County, home to the Pine Ridge Native American reservation, was also less than that of countries such as India (66.9), Sudan (67.2) and Iraq (67.7), the report found. Residents of Summit County, home to the Breckenridge Ski Resort, had life expectancies of 86.8 years. “Risk factors like obesity, lack of exercise, high blood pressure and smoking explain a large portion of the variation in lifespans, but so do socioeconomic factors like race, education and income” the researchers concluded. The good news: every U.S. county saw a drop in the risk of dying before age 5, and the gap between the counties with the highest and lowest levels of under-5 mortality narrowed since 1980. The study attributed these results to health programs and services focused on infants and children.
The Five Most Valuable Global Brands (market value) 1-Apple, $104.3 billion, 2-Microsoft, $56.7 billion, 3-Coca-Cola $54.9 billion, 4-IBM, $50.7 billion 5-Google, $47.3 billion (Source: Forbes)
The 10 most powerful brands in the world: 1- Walt Disney, 2- Lego,3- L’Oréal, 4- PricewaterhouseCoopers, 5- McKinsey, 6- Nike, 7- Johnson’s, 8- Coca-Cola, 9- NBC, 10- Google (Source: Will Heilpern, “These are the 10 most powerful brands in the world” Business Insider February 1, 2016)
Top 10 Brands in Healthcare: 1- UnitedHealth Group (Minnetonka, Minn.), 2- Anthem (Indianapolis), 3- Aetna (Hartford, Conn.), 4- Medtronic (Dublin, Ireland), 5- Humana (Louisville, Ky), 6- OptumHealth (Eden Prairie, Minn.), 7- Cigna (Bloomfield, Conn.), 8- Fresenius (Waltham, Mass.), 9- Express Scripts (St. Louis), 10- McKesson (San Francisco) (Source: BrandFinance http://brandirectory.com/league_tables/table/healthcare-25- 2017)