Nate Kaufman
Welcome to the Healthcare Bridge. I'm Nate Kaufman, and our purpose here is to provide an insider's perspective to our crazy healthcare system. I continue to work with physicians in hospitals all over the country, and today, we are fortunate to have as a guest Brandon Edwards, who, in my opinion, is probably the leading authority on healthcare marketing and branding in our country. Brandon, hi, welcome.
Brandon Edwards
Nate, I like your opinion if it makes me be the best at anything.
Nate Kaufman
Give us a little background about yourself and about your company, Unlock.
Brandon Edwards
I've been in healthcare marketing since 1997. Actually, I take that back, I really started in 1995 and so I guess this is 30 years. Really came up on more of the crisis communication side of marketing. I had a poli-sci major in college, which basically prepares you to do nothing, and thought maybe law school. Got out, worked in politics for a while, ran campaigns, and then that led to healthcare. My first really sustained period in healthcare was five years at Tenet Healthcare, from '97 to early '02. After almost, I guess, three decades at the time, started a company called Unlock with a great investor group. Unlock really focuses on bringing together what we view as the essential ingredients of growth, which is marketing technology, but a full stack marketing agency and a full stack managed care consultancy. So [it is] really involved with providers in their managed care strategy, contract negotiations, contract modeling and analytics, all the things; you help providers participate in the right insurance networks and give access to the people that they serve.
Nate Kaufman
We met maybe two decades ago or more when you probably did one of the first crisis interventions, when a hospital system in Colorado decided they needed to go out and network with Blue Cross, if I remember correctly.
Brandon Edwards
I think it was either 22 or 23 years ago, I don't know, I was thinking about it the other day. I'm like, how long have I known Nate? It's like, good god, a long time. We were both young men.
Nate Kaufman
Combined, we have about 70 years of experience. How many clients does Unlock have, would you say, right now?
Brandon Edwards
We have 300 professionals, about 433 clients in 49 different states. We're still after that elusive client in Alaska, but otherwise, we have a really interesting perspective on the industry. Lots of different size organization, size clients, obviously different geographies, different payers that they deal with, just really, really interesting view on the industry from where we sit.
Nate Kaufman
So what is your view on the industry, as long as we're talking about perspectives.
Brandon Edwards
As you do, I've had the opportunity to give some talks lately to larger groups, and I always have to really sit and think about like, okay, is there something positive I can say? Because I do think we're in a really tough period right now for the industry overall. And when I say the industry, I don't just mean hospitals and health systems. I mean the entire healthcare provider sector. Frankly, this is also at least the first time in my life that I can remember there being a fair amount of pressure on the health plan industry as well. That's somewhat new. I think they've been on a 20 year uninterrupted run of prosperity.
Nate Kaufman
You can only cheat for so long.
Brandon Edwards
Well, there is that. So how do I see it? I mean, I think you and I have talked about this a lot, and certainly I would say this is part of my POV generally; this system has seemed unsustainable for a long time and at some point I feel like Chicken Little because [I] keep saying it's unsustainable. It's like, well, I don't know if the definition of unsustainable is 20 plus years. I guess it is sustainable, right? I don't know, the economics are very difficult right now. And look, I think put aside all the business and all the money and all the rest of it, this is an incredibly frustrating system for patients. I mean, for a consumer to navigate the system - I feel like I know a reasonable amount about this, I know you know more than a reasonable amount about this - and it's challenging, even for people who wake up every day working in healthcare to know how to navigate, know where to go and what's going to be covered, and what you're going to have to pay for, and how it's supposed to work. It's just a very difficult season. And to be honest, I don't think there's anything that's come out of DC, or probably any of the states, in the last, let's call it 12 months to be generous, but probably a lot longer than that, that's helped at all. In fact, I think arguably, the recent budget bill in particular is just an unmitigated disaster for the healthcare system.
Nate Kaufman
Yeah, I think the solutions that the payers have, whether it's government or commercial, is: if it grows, cut it. Other than that, they have no clue. But what I'm really interested in, a little birdie told me you're actually writing a book on marketing. Your perspective on the state of marketing, whether it's in healthcare or in general, and in particular, my pet peeve, which is, why is it that a not for profit charitable organization is sponsoring a sports team?
Brandon Edwards
Yeah, I mean, look, [laughter] and again, we've been around for a while, right? I can remember when Centinela Hospital sponsored the Dodgers in LA. I remember... I think those were the first hospital sponsorship billboards that I saw - to say I'm sure there were others - that's the first one I remember, which goes back a quarter century. So I'll talk about marketing more generally. We have a new book that just came out, "Authentic Healthcare Marketing in the Post Truth Era" and I'll share a little bit about what that means.
Nate Kaufman
By the way, thank you for the signed copy.
Brandon Edwards
Yeah, right, that's a thing. I think, in general, when we talk about marketing for healthcare providers, I think we look at an industry that has typically trailed marketing practices in other industries by five to ten years, like that. And there are several reasons for that; a highly regulated environment, I think business leaders who maybe don't come up as much thinking about marketing, and I think on top of it, marketing for healthcare providers does not follow the traditional four Ps that we all learn about in business school, because price doesn't live with marketers. Price lives with managed care executives that are setting what you're going to charge for certain services. I think that gap has narrowed a little bit. But I think healthcare marketing, in many ways, has run into the buzzsaw that is our current society. I think our society has become very tribal in a lot of ways; we get to spend time with people that agree with us. We get to read news that mimics our worldview. I get to go online into social media and have everybody say things that I agree with. This is not normal. This is not how our lives have gone for half a century. But recently it is, and I think it has had a really material impact on healthcare marketing as well. Because I think, ultimately, about a half the population has a heavy distrust of institutions and experts. And if you're a healthcare provider you're marketing on behalf of an institution, and by and large, you're featuring experts in white coats we call doctors. I think there has to be this really fundamental shift if healthcare organizations are serious about their mission, and I think most of them are. They really have to think about marketing differently: different messages, different messengers, different channels, or there's about 50% of people you're just not reaching at all.
Nate Kaufman
What do you mean by different, those different things? Again, I still want to get back to is it necessary for a hospital in Miami to be sponsoring the Miami Dolphins? I mean, what does that do? I don't know.
Brandon Edwards
Maybe in the early days of this... and there was actually just an article in, I think it was Becker's (Hospital Review) or Modern Healthcare, that was talking about this. There are a couple groups, nonprofit health systems, that have sponsored minor league baseball teams, or, to your point, the NFL or whatever it is. I mean, Highmark sponsors the Buffalo Bills for goodness sake, their stadium. There was just an article last week that Our Lady of the Lake in Baton Rouge was looking at sponsoring LSU's new facility for $50 million over ten years. And again, intellectually I can sort of understand, you're a big institution, you want to support another big institution. But I just think it reinforces a lot of the negative stereotypes about hospitals and the financial side of hospitals and what people would consider waste. To your point, I think if we're all just being honest, it's a combination of if you're running a hospital, you're running a really big business, so you're a target for fundraising like that. But I also think that what happens when you sponsor a stadium, there are luxury boxes, there are special events, there are all kinds of things. I think sometimes the easiest explanation is the right one, and people will justify it by saying, we're going to recruit doctors, or we're going to do this, or we're going to do that. At the end of the day, I think it's a pretty hard thing to justify.
Nate Kaufman
So what do you think they should be doing differently? What should the health systems be doing differently that they're not doing to reach the populations that they need to reach?
Brandon Edwards
To your point, is sponsoring a stadium or a sports team going to reach some audience who wouldn't be reached otherwise? I would submit, probably not, certainly not in any way that you couldn't reach in other, more cost effective, ways, is probably a better way for me to say it. I think my shorthand for this would be, I really think what hospital marketers and healthcare marketers generally have to do is meet people where they are. And what I mean by that is I think many people believe things about healthcare and about their health that are just fundamentally wrong. We can either lecture at them and tell them all the reasons that they're wrong and all the reasons that what they believe is wrong, or we can meet them where they are and acknowledge, look, you believe certain things, I don't have to change your mind about it, but I do need you to know where to go for certain things. We could talk about vaccines as an example, there are just a lot of different angles to play on. But I think a large part of it is helping people hear from spokespeople or representatives of the healthcare system that they'll actually listen to and trust. In my view, at least, if you think about someone who is maybe more on the left side of the spectrum, uber progressive, they're going to be much more likely to accept marketing messages from someone that looks and sounds like them and believes what they believe. And I think the converse is true. If you're a MAGA or MAHA person, you're going to be much more likely to listen to and take advice or marketing from people that you recognize as being like yourself. It's weird how politics has become this almost filter of we can't hear anything if it misaligns with our political view. I just don't remember a lot of that over the last 30 or 40 years as a voting adult. So I think some of it is meeting people where they are. I think some of it is not trying to convince them that they're wrong. Right now, a lot of that marketing is here's a doctor telling you that you have to do X or Y or Z, and maybe quoting science to back it up. And I think there is a decent cohort of the population that's not interested in that at all. In fact, I think it may have the opposite effect.
Nate Kaufman
I always find that the people that look at the billboards are basically the other hospital administrators. You drive down the road and all of a sudden you see something like, if you have back pain, this is where you should go. And then, where are people supposed to go? Well, I do have back pain, and I think I'm going to follow exactly what that billboard says, as opposed to going to a physician and actually seeing what the situation is.
Brandon Edwards
Well, to your point, that presupposes that you can get an appointment with a physician in some reasonable period of time, and it assumes your insurance will cover that visit to that physician. Again, we have this system... I used to think the whole healthcare system was designed for doctors. I really don't have that view anymore. I think the entire healthcare system is designed for insurance companies. And I think that it's their world and we're just living in it in many ways.
Nate Kaufman
Speaking of which, and not to change the subject, but nobody I know has been in more disputes with insurance companies than me - other than you and our friend Kevin - and so my question is, what are you seeing out there in the real world? Give us an insider's perspective on your view of the insurance companies and why there are so many disputes.
Brandon Edwards
I think, in general, insurance companies have been creating impediments to care, and particularly the payment for care, for a long time. It probably started in earnest in the '80s with the HMO movement and has really intensified. I think what's different about the current moment is health plans were really aggressive with providers and really aggressive with policies when they were doing really well financially, when they were killing it. And now they're in a bit... again, first time that I can think of in my career, where you've got health plan stocks down 40-50%, you've got people pulling guidance, and just all kinds of crazy stuff. What we're seeing is a pretty predictable intensification of that conflict, because the payers want to pay less for care. Ultimately, what we call healthcare, they call medical loss ratio, which is pretty telling about what someone's priorities are and what their values are. To me, it's intensifying as a result of that. So what you really have is this incredible consolidation on the health plan side, where they're incredibly powerful - huge market share, extremely profitable organizations - and then on the other side, you have hospitals and physician practices and others that are dealing with a really high inflationary environment. They're about to see a big surge in the number of uninsured because of Medicaid cuts and the end of premium subsidies on the exchanges. And so where those things meet, those healthcare providers need better payment in order to remain sustainable, and those health plans don't want to do it. They want to keep that money. I don't really think it's a lot more complicated than that. In many ways, this is the raw exercise of power by health insurance companies in a system that was, by and large, designed for them and for their success. I think it's a huge problem, personally, when the number one factor that causes people to choose a doctor is whether or not they accept their insurance, not whether they're good, not whether they're smart, not even whether they're available; it's do they take my insurance? Because if they don't, it doesn't matter how good they are, I can't see them.
Nate Kaufman
To a health plan, a doctor is a commodity, and the difference between one doctor and another doctor is did they successfully negotiate a rate with me or not? Whereas, as you and I know as insiders, it makes a real difference which doctors you use, and I'm willing to pay more for a doctor that's going to diagnose me more correctly and give me a better treatment plan than another doctor that's cheaper, which is really what's happened. In my opinion, we're entering an environment where value is being equated with cheap. So the lower the cost, the more attractive they are to an insurance company but that's not necessarily good for patients.
Brandon Edwards
Amen. To your point, I think value has been tied to price, whereas actual value - the real definition of value, not just in healthcare, but in general - is actually the intersection of effectiveness, or the value of what you're getting, and the price. It doesn't equal, it's part of the equation. And you know the old joke, what do you call the guy who graduates last in his class from medical school? A doctor, right? It's the same thing; the cheapest doctor, most expensive doctor. Now, I think we've also been around this industry long enough to know that there are lots of healthcare providers that are expensive who aren't better either. So the flip is true, but I think it's elusive measures of quality, it's elusive measures of what it means to be effective. Most of what people rank as "quality", are really more like hotel services: were they nice, was the food good, did they show up on time. Stuff that, to me, are just table stakes for any business or organization. But I think it's a dangerous period because particularly the federal budget cuts will put a lot more financial pressure on hospitals, which, perversely, will cause them to charge more for insurance companies, or they look for contracts or the negotiated rates that are higher to offset that at a time - we all probably could argue - that the system can absorb that the least. This is a tough season for consumers to take them.
Nate Kaufman
I saw a panel of these very large system executives today, and they all said the right things about this is our time and we have to meet the challenge. Having been around as long as I have, I know the rates that those folks are getting, and at the end of the day, those folks wouldn't be sitting there if they didn't have the kind of relatively high negotiated rates with commercial insurance companies to offset the lower reimbursed Medicare and Medicaid. Clearly there's this really intense tension between hospitals, physicians on one side and insurance companies who have run out of magic bullets, and the only thing they can do is hammer providers. What is your advice to providers who are going to be trying to get better rates from an insurance company?
Brandon Edwards
You've always done a good job of balancing the expense side and the revenue side. I'm more of a revenue guy, and focus on that, and you have the operational background, obviously, in those kinds of organizations. I do think it's a combination. This idea that we're just going to keep doing everything we did before and charge more is not realistic. Part of how an organization right sizes is it stops doing certain things: stops providing certain services, stops spending money on things that don't generate profitable revenue. Especially if you're a mission driven organization, and you're serious about seeing everyone that needs help, then you have to work really hard to keep your side of the street clean on the expense side of it, and I don't think the industry has always done a great job of that. These are big bureaucracies and big institutions and some of why people are hesitant about believing in institutions is true. They can be bloated and bureaucratic and not terribly consumer-centric and all those things. I don't think there's any hospital in America left that can cut its way to sustainability. There is a combination of the expense side and the revenue side that will help to solve this problem. At the end of the day, all healthcare providers are basically fighting over table scraps in terms of what the health plans are willing to give them. I think that the hospitals and health systems and physician groups and others that are going to be sustainable for the long term are going to stop doing things that are inefficient and wasteful. They're going to reduce expenses. They're going to reduce services and other things, an administrative bloat, frankly, that affects that sustainability side. But they're also going to be really negotiating contracts that are sustainable, so for many that will mean higher rates from... I think for a lot, it isn't just higher rates, it's actually just getting paid what you're promised in the first place. What we would all call yield on a contract is, like, I'm expecting a dollar and I get 85 cents. Well, do I go raise the price to $1.15 or do I just try to collect the one dollar that I was expecting? To me, that has got to be a huge focus. And the reality is, health plans are just very good at it. They're very aggressive and very good at it, and they hold the purse strings so there's this constant battle.
Nate Kaufman
One thing you said is "inefficient and wasteful;" I think they have to get rid of anything that's not essential at this point in time. It's hard for me to get that message across, but when you're raising rates and having a battle with the insurance companies, which we've had many times, the insurance companies have a very simple bumper sticker, okay? It costs two dollars for this bag of salt water, and the hospital is charging you $200. That's their bumper sticker. And our bumper sticker, of course, it goes all the way around and around the car; [laughter.] Medicare doesn't pay this, Medicaid that. Now the question is, how do you get that message to employers that the choice is not status quo at lower cost or higher cost, it's you're going to have an access problem. As we lose our resources, we cannot continue to provide the services. How do you get that message across?
Brandon Edwards
I think you're right. The message on the other side is always simpler. It's also not entirely true. It's always easy to make something simple when you ignore nuance, and maybe don't seek that accuracy quite the same way. Ultimately, anyone... I think you and I, if you asked us is healthcare too expensive? Yes, healthcare is too expensive. I also think, on some level, payers attacking hospitals for how they price is like an old Richard Nixon quote that said the media loves to pump you up on steroids and then accuse you of being a drug user, I think there's something to that with healthcare. We're playing by the rules that have been set largely by other people and largely by health plans, and then we're criticized for playing by those rules. So, yeah, can I defend $200 for a two dollar bag of salt water? No, and I don't think anybody can, but that's the system that, in our collective wisdom, we have chosen to set up and operate under. Increasingly, those providers that are successful, number one, people have to care that you're there. If an insurance company says, system X is leaving our network, and nobody cares, then system X is leaving that network unless they want to be a price taker. Aside from essentiality and the perception of essentiality or preference, the second issue is really shifting the debate from do we deserve to be paid more, way more, into a question of priorities. Do we have the same priorities? Is the health plan's priority to maintain a stable network? Is the health plan's priority to use the dollars that it collects to actually pay for healthcare, not to drive its own profitability? Is there a sincere desire to get healthcare services to the people that need them? To me, we win an argument about priorities and we lose an argument about efficiency and about money, right? Over time, I think we can win that argument but at least in the near term, it really needs to be, are your dollars being used the way you want them to if you're an employer or a consumer? And most people would say, no. Most people would say, I think the insurance company keeps too much. I think they're largely responsible for driving up the cost of healthcare. If you just look at how much those health plans extract from the healthcare system for serving as middlemen, maybe you could look at a world where you didn't need to cut Medicaid if you found that $80 billion somewhere else.
Nate Kaufman
We're getting close to the end but I want to comment on that. I mean, 24% of the federal budget and probably 30% of the state budgets are for healthcare. Don't you think that we need to plan for... really get down to essential elements, flatten organizations, deal with healthcare systems? I did a rant on LinkedIn a little while ago; when I deal with them on a simple issue it's like Hollywood Squares on Zoom; you have like, ten people, you have legal and all these other people, HR. I mean, who's driving these decisions? And then they take a long time. I don't know how health systems are going to be able to skinny down and deal with this kind of pressure.
Brandon Edwards
It's challenging. These are big organizations by any state, by any measure, certainly nowhere near the size of health plans. You know this, but for our audience, United Healthcare is the fourth or fifth largest corporation in the world; you're talking about very different sorts of scale. But yeah, to your point, I think highly politicized organizations, very complex organizations, organizations that require an awful lot of alignment and buy-in with physicians - some of whom are employed, but many of whom are not - there's a lot of moving parts in that. I like the way you frame that though, around essentiality because I think it's one thing to say we're doing better, and largely what you hear from audiences now is like, I'm not interested in you doing better, I'm interested in you doing well. We need to move past incremental improvement. I do think it's going to force us to make some difficult choices as society that these tax cuts and all the stuff that just went through, I think everybody knows this, but Medicare is still scheduled to be insolvent within the next decade. It's actually something like seven or eight years at this point. I don't know about you, I don't hear anybody talking about that, I mean, that is not on a public policy agenda. It will certainly happen outside of this administration, just timing wise, but this is not a can you can just kick down the road indefinitely. The money going out is greater than the money coming in, hard stop. So I think it is going to force us to make some difficult choices. I've heard a lot over the years about people being concerned about a tiered healthcare system or a better system for people that have money than people that don't. Let's be honest, it's already where we are. That's true for actually everything in America, but I think it's also particularly true for healthcare. That's why God made concierge doctors and one thousand other things that exist for people of means. I'm not sure that that's entirely bad. I think it is bad when it prevents access to resources for people that don't have means. If the wealthy are getting care but that's coming at the expense of the poor getting care, I don't think anyone would say that's a good thing for the country or the world or those people in particular.
Nate Kaufman
Do you have any final thoughts for health systems or for patients? Any random ideas or thoughts that you want to share at this point?
Brandon Edwards
I think a couple things. One, your idea of really focusing on those things that are absolutely essential and critical is hard to argue with, you can take risks and do things in times of prosperity. And I think we would all argue that the healthcare system has probably not been in a time of prosperity for a long time. It's looked a lot better as a result of the ACA, a lot more people having insurance. But the sort of fundamental design of the system is just off. It's off for everyone, actually, except for insurance companies, who've done quite well in this environment. But even that, I think there may be some question about if you look at rising MLR and a lot sicker people using a lot more services, those are the things that cause problems for health plans and real challenges. Beyond that, I believe increasingly, even in mission or driven organizations, there is an imperative to ensure that you are reaching those people who have commercial insurance, who need health care services. I do hear this a lot, again, from nonprofit clients, who say we're a mission-driven organization, we take all comers. I say, I think it's incredibly admirable, and I'm glad you do that, but I think you want to be able to have the ability to fill the next bed with a profitable patient, not because you value that human over another, but because that's what makes the system sustainable. That's hard to target, it's hard to acquire people through marketing, and it's still oddly elusive in many organizations to measure that, but I do think that's where marketing helps fill this gap is. Marketing actually is the front door of healthcare for a lot of people, and I think making sure that organizations can get, not just their fair share of people with commercial insurance, but maybe over-index on their fair share if they want to be sustainable for the long term. Those people with commercial insurance pay for the whole system to work. And that is a challenge for some organizations to accept and embrace.
Nate Kaufman
And target marketing to those folks is critical, absolutely. So let me just leave you with my one "aha" as I've been thinking about this, and that is, I think the difference between organizations that are well positioned for this and those that aren't is very simple; real time dashboards. If your organization has real time dashboards measuring what's important, from clinical quality to cost, and you have benchmarks in that dashboard so that you act when the dashboard tells you you're out of whack, or whatever, I think that is what a well-positioned healthcare system is today. It's very simple; look and see if you have real time dashboards. If you don't, you've got a problem. Your thoughts?
Brandon Edwards
Again, hard to argue with. I would say actually you can extrapolate that same thinking onto the marketing side as well. We do a fair amount of marketing work, for example, for behavioral health companies or addiction treatment companies or different different areas of healthcare that are not just the hospital health system environment. And I will tell you that they watch the effectiveness of their marketing on an intra-day basis, like, not how did we do this month, but how did we do by noon? How did we do by five? That is not a common discipline in hospitals and health systems. It can be. But I think, again, it's big institutional thinking. It's lots and lots of hands touching things. And I think being leaner, being more nimble, and to your point, being really real time and honest. You probably know this, one of my least favorite things is people say, I like this or I don't like that. Well, what does that have to do with anything? Either it works or it doesn't. I'm much more about effectiveness than preference. And I think those things actually really tie together.
Nate Kaufman
I think you're absolutely right. At the end of the day, it is nice to have opinions, but you should be making your decisions based on facts. And by the way, unfortunately, there's been more fiction written in Excel than in literature. So if you want somebody to create facts for you, we have them in the industry. That's probably about our time, and it has been an absolute pleasure talking to you, Brandon, this is first time that I've been on this side and you've been on that side.
Brandon Edwards
This was fun. I appreciate you having me on, this was nice of you.
Nate Kaufman
We'll have to do this again. That's the end of the Healthcare Bridge for today. Thank you very much.
Brandon Edwards
All right, thanks for having me.
