As the dark clouds of economic recession gather on the 2024 horizon, healthcare companies must brace for the choppiness ahead. It's no secret that the healthcare sector, once deemed recession-proof, now faces the stark reality of financial strain, with more than half of hospitals already operating in the red. This alarming statistic not only signifies the urgency for change but also beckons a strategic pivot in how healthcare entities approach marketing.
Add into the mix pressures from commercial insurers, who are looking for more cost-effective approaches or alternatives to surgical procedures like hip and knee replacements, and from patients, who are ever more hoarding their savings and putting off elective procedures, and you’ve got a witch’s brew of trends that could roil the healthcare industry (which, in fact, is still a sector that must make money).
So, how do healthcare companies face down these trends and make the most of what’s to come? I recently sat down with Scott Alexander, an industry veteran who in 2018 launched his healthcare marketing agency, Jarius Marketing.
From his experiences working inside storied enterprises like Medtronic and providers like the Mercy Health System, Scott has a keen sense of how to drive commercial growth within this intricate industry.
Together, we discussed ways that healthcare companies could understand their exposure to the coming trends, best fortify their war chests, and turn to aggressive marketing techniques designed to secure and pivot their way through the gloom.
Understanding the 3/12 and 12/12 Rate of Change
Before healthcare companies can effectively steer through the economic storm, they must first discern their position and trajectory. Utilizing tools such as the 3/12 and 12/12 rate of change equips businesses with a clear perspective into their current financial health and foresight into where they're heading. The 3/12 ROC serves as a leading indicator, hinting at the direction your company is moving towards, while the 12/12 ROC acts as a lagging indicator, solidifying your current standing. Together, these metrics provide a roadmap for navigating the uncertain tides ahead.
Bolstering Cash Reserves: The War Chest for Opportunistic Growth
In the face of a recession, liquidity is king. Shoring up cash reserves grants healthcare companies the agility to invest in market opportunities when competitors are scrambling. This strategic positioning is akin to a game of chess, where foresight, patience, and timing dictate success. Companies that maintain a robust financial buffer can maneuver to capture market share, even as the industry tightens its collective belt.
The Art of Message Refinement in Troubled Times
Perhaps the most critical step in recession-proofing your healthcare marketing strategy lies in the art of message refinement. It's not just about what you say but also about resonating with your audience on a deeper, more personal level. During tough economic times, your message must echo the clinical, financial, and operational concerns of your customers. It's about telling a compelling story that aligns with the pressing needs of your audience, whether it's a hospital CFO or a rural cardiologist managing patient care from afar.
Adaptability in the Face of Change
The crux of weathering a recession lies in adaptability. It's about adjusting your commercial efforts swiftly to the changing economic tides. This adaptability extends beyond merely conserving cash or investing in growth opportunities; it encompasses a deeper understanding of the market, your customers, and the impact of your offerings.
For example, healthcare companies should be acutely aware of market trends, such as the shift from inpatient to outpatient care and the influx of private equity in physician practices. These shifts represent not just challenges but also opportunities for those ready to adapt their commercial strategies. By focusing on less invasive, early-stage interventions, healthcare providers can offer value in a landscape shaped by high-deductible plans and a more cost-conscious consumer base.
One example Scott shared spotlighted a successful pivot by an Israel EKG company that harnessed the power of digital democratization. Their showcase product, a unit that permitted the reading of EKGs remotely, was being marketed to “big boys” like the Cleveland Clinic and the Mayo Clinic – a typical approach designed to slowly cast buzz about the product out to a larger base.
Well, early 2020 rolls along, and COVID begins sweeping the globe. Scott recommended to the company that now was the time to get this product into the hands of every cardiologist in the country and advertise it broadly.
Before long, the company had internal medicine doctors, primary care physicians, and cardiologists in every crevice of the U.S. calling to buy these remote EKGs over a 15-minute phone call, viewing it as a solution for a highly urgent crisis.
By pivoting to focus on those most likely to buy today, they harnessed the power of digital outreach to amplify reach and expedite the sales cycle. This approach, especially during the early days of COVID-19, underscores the potency of digital channels in expanding your market and connecting with customers ready to engage.
In case you didn’t know, a US recession looms, and healthcare companies that strategize with intention, execute with precision, learn from the market, and swiftly iterate will not just survive but thrive. By being acutely conscious of your organization’s economic state (recovery, accelerated growth, receding growth or recession) and that of the market, and ensuring you have the cash reserves to maneuver, you position your company not only to withstand a choppy US economy in 2024 but to emerge stronger and more dominant than before.
We hope this blueprint helps you to turn the impending economic downturn into a stage for growth and consolidation. Grounded in data and propelled by digital prowess, the path ahead, while challenging, is rich with potential for those healthcare organizations that are ready to adapt and innovate.