Marketing Strategy Flaws: #4 Up-front Cost Barriers

| October 13, 2010

This is the fourth part of a five part series which addresses the flaws inherent in an insurance-centric marketing strategy. This post describes how this strategy requires significant up-front cost, including a multi-million dollar JCI certification requirement.

If you ask an average U.S. healthcare consumer what JACO certification is, all you will see is blank stares. Then, ask them what JCI certification is. Again, all you’ll get is blank stares. Healthcare consumers have no idea who the Joint Commission is and what it takes to get and maintain certification. They are simple, they understand brands: Cedars-Sinai, John’s Hopkins, Sloan Kettering, etc.

Now, ask an insurance company these same questions. You bet they not only know what these certifications mean but track your hospital performance.

What does this mean to a destination who is trying to attract U.S. healthcare patients? One simple thing: If you are trying to go through the insurance companies for patient referrals, you’d better be willing to pay the tollgate – JCI certification and reduced pricing.  There’s no way around this. It is what it is – a cost barrier that can exceed $10,000,000 (U.S.) plus ongoing re-certification fees and a lengthy certification process.

Or, you can adopt a direct-to-consumer marketing strategy and delivery your brand message directly to your potential consumer community.  If you can build strong brand awareness, patients will come – regardless of your JCI certification status.

Last year, my consulting firm, Premiere Medical Travel, conducted a year-long research project. Included in the survey, we polled people actively in the market for a Medical Tourism solution. Interestingly, when asked to provide their destination location of choice, an overwhelming majority of respondents selected Japan, a country not currently offering these services. The reason is simple – Japan has established tremendous brand awareness and popularity in the U.S.

So, if you want to penetrate the U.S. healthcare market, you can go through the insurance companies and pay the associated premium. Or, you can take your brand message directly to the consumers. It’s your choice.

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Category: Marketing/Branding Strategy

About Marc LeShay: I am a strategic consultant helping people find clarity in chaos View author profile.

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