Healthcare spending likely to be constrained

Observation:   A story in today’s Wall Street Journal suggests conservative spending on health care in the near term; a hangover behavior from the effects of the recession.  Click here to see the story. 

Implications:  To the extent that health care “purchases” are elective or where the insurance deductible is too high, people continue to defer spending just like any other discretionary category.  (Even things like laser vision correction and dental.)

If you work in health care, specifically, have you returned to explaining the value and quality-of-life issues associated with the care you provide?  Do you realize that you must compete with, say, the purchase of new home furnishings, a boat, or other discretionary purchases? 

Do you offer a form of financing, beyond the patients’ own insurance?

Health care is complicated.  Convincing people to buy it is getting more complicated, too.  Like any other purchase, it is important to explain your value proposition:  How your treatment adds value to the consumers’ (patients’) life. 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Hospitals do a little self-diagnosis

Observation:   A recent article from the New York Times explains that with health care reforms at risk of either passing or being repealed, the industry is not waiting for regulations to mandate more care delivered at less cost.  Many hospitals are proactively working to refine their systems and streamline their services.  Click here to see the full story.

Implications:  Like any business, there’s more to operational change that simply reorganizing a flowchart.  When companies introduce “efficiencies,” it is important to mitigate the frustration likely to be felt by customers (patients).  When new, favorable features are introduced, the company cannot take for granted their customers will notice.

If you are a stakeholder in a health care organization, how are you communicating the changes that are either underway, or likely inevitable, as the category moves toward a more cost- and profit-oriented future?  What kinds of messaging might weave you more deeply into the fabric of the community you serve?  For those changes that might be less well received, how can you placate a consumer that might not be all that enthusiastic about the changes you are making?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Gulf seafood regains “comfort food” status

Observation:   Gulf of Mexico seafood producers were among the hardest hit by the effects of the BP oil spill of 2010.  But a story from Supermarket News suggests that many consumers are once again comfortable with eating goods from the waters of the Gulf coast.  Click here to see the story.

Implications:   If you run a restaurant or a grocery store, this story might lead you to add more Gulf products to your menu… or if you’ve already done that, it might lead you to bring more attention to those offerings.

If you run any other kind of business, it should serve as a reminder that trust lost is not easily regained; the BP oil spill happened almost two years ago, and there has been little bad news on that front since the well was successfully capped.  It has taken all of that time—with little or no bad news coming from the Gulf—before some categories could finally show a comeback.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

More workers lunching at home

Observation:   More workers are getting away from the office over lunch hour, and dining at home.  That’s according to this recent post from Food Manufacturing (click to link).

Implications:   I appreciate the way this story outlined a problem (for foodservice manufacturers and restaurant operators), but then also suggested some ways to entice consumers back into the restaurant and retain those you’re already serving.  It’s important that we focus on the things we can control (service, quality, menu options), rather than those things we can’t.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Walgreen’s morphs the niche they are in

Observation:  It is an interesting time to watch the nation’s largest drug store.  First, in a gutsy revolt against the healthcare system, the chain recently announced they would no longer accept prescription orders reimbursed by insurance-giant Express Scripts.  According to a recent video from supermarket expert Phil Lempert (click here to see that footage), that move could represent as many as 80 million prescriptions.  But that was a hit Walgreen’s was apparently willing to take, in defiance of the prescription management company’s effort to shrink the store’s profit margin on medications.

Another story—this one from Forbes—suggests that Walgreen’s is moving toward a business model that is much more consumer-centric, with product offerings that include a widely expanded beauty products, select groceries (including “wellness” organic foods), wine and cheese shops, and even coffee shops.  Click here to see that story.

Implications:   This is just my opinion, but I see this move as Walgreen’s decision to not let Express Scripts define the business they are in… and take control over that decision for themselves. 

What business are you in?  Is the answer to that question decided by a landlord, vendor or supplier?  Or is it defined by you and your customers?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Wal-Mart heading deeper into healthcare

Observation:  A story from USA Today indicates that the world’s largest retailer will make an effort to become the country’s largest primary healthcare provider.  Click here to see that story.

Implications:    Wal-Mart has been a disruptive force for many retailers and service providers… and it doesn’t look like the local doctor will be immune from a similar advance.  It will be interesting to see whether—or to what degree—consumers will trust a discounter to be their healthcare provider.  And whether consumers will want to go shopping where there are likely to be more sick people hanging around!

If you’re a health care provider, do you (or does your clinic) provide a demonstrated value that makes you worth more than the coming Wal-Mart alternative?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

The psychology of fast food

A friend sent me this recent story from Psychology Today, explaining the psychological—and some physiological—reasons that consumers gravitate to the Golden Arches.  Click here to see the story.

Implications:   Humans are fascinating people.

Can you identify the reasons people shop with you?  What the most common traffic patterns are that lead-up to their arrival at your place of business?  How about the motives that most often spark their visit?

Those compelling points should be a part of your messaging strategy, if they’re not already.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: More observations about older consumers

Okay, it seems like this week there has been an inordinate amount of coverage regarding older Americans.  I shared some of it in a story Monday about how food shopping habits change after retirement (see that post from 10/10/11), and another story about the way Grandparents are helping their children and grandchildren in the aftermath of the recession (see “Grandparents” by clicking here).

Today’s Research Brief adds to that perspective, including insights about the amount of wealth controlled by consumers over 50, and how life expectancies (and health) are expected to grow longer, globally.  Click here to see it.

Implications:   The more things change, the more things change.  As adults not only live longer, but stay active and live in good health longer, how will the composition of your customer base (and the needs of those customers) change, over time?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Health insurance costs rise sharply

If health insurance is taking a bigger bite out of your paycheck, you’re not alone.  A story in today’s New York Times indicates that policy prices have jumped 9% in the past year according to research from the Kaiser Family Foundation.  Click here to see the story.

Implications:   As I sat in the waiting room before a doctor’s appointment this week, a lady at the front desk was sharply criticizing her bill.  It was a private conversation that I did not want to overhear, but both the volume and the demeanor of the exchange made it impossible to be unaware of.  “All they did was take my blood pressure and do a med check, and I didn’t even see the doctor,” she complained.  (Her only contact on the visit was with a nurse.)  “How can that possibly be worth (more than $175?)”  The woman went on to explain that she did not have insurance, so it would be an out-of-pocket expense. 

I felt sorry for the both the frustrated customer and the office manager trying to explain the charges.  (Even the clinic employee was having a hard time justifying the cost, which amounted to a rate of more than $1,000 per hour.)  With both unemployment rates and health insurance costs at such high levels, we can expect this conversation to be repeated in waiting rooms across the U.S., and often. 

There are two learning points that I took away from this experience and the Time article.  The first one is for the healthcare and insurance industries:  Some of you haven’t done a great job of communicating the value you provide for the dollars you receive, and some of your patients are losing their patience.  Those consumers are likely to start scrutinizing healthcare charges more closely.

Secondly—and this is for folks outside the healthcare field—we can expect consumers to take more health issues into their own hands.  From fitness to nutrition, consumers will be looking for ways to avoid healthcare (and insurance) costs.  Is there any aspect of the business you are in that could constitute “an ounce of prevention?”  Think health-conscious menus at restaurants, any product or service that involves getting some exercise, or packaged goods that involve portion control.  Communicating any healthful attribute your product or service has might be just what the doctor, or… patient, ordered.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Patient, heal thyself

In greater numbers, healthcare consumers are adding additional therapies to whatever the doctor ordered… according to a study from Consumer Reports that I found through today’s STLToday.com in St. Louis.  Click here to see that story.

Implications:    From fitness programs to organic foods to meditation and yoga—and yes, even homeopathic remedies—consumers have been assuming greater control over their healthcare future.  Part of this might have to do with a lack of direction for healthcare in the political arena, and some of it may have to do with the fact that Baby Boomers are moving toward their golden years very quickly.  It could be that insurance (or lack thereof) plays a role... and there may be many other influences.

What kinds of products or services do you offer… that are “good, and good for you?”  You don’t have to sell healthcare, specifically, to profit from this trend.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Nutrition disclosure from a local supermarket

Following-up on the story about food ingredient transparency from earlier today (see below), I’ll share this recent Minneapolis Star Tribune story explaining how one grocer is attempting to provide greater disclosure to consumers about the nutritional value of the products on the shelf.  Click here to see the story.

Implications:  There has been so much coverage about health issues and obesity over the past few years that I’m no longer sure whether it is a bona fide consumer concern, or journalistic hyperbole.  This supermarket chain might represent a chance to see whether consumers are really interested in knowing about the ingredients of some foods, and whether they’ll change their behaviors as a result of having that knowledge.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

What do you have to hide?

A recent story from the Lempert Report explains that Safeway has decided to place it’s nutritional label on the front of the package for its store brand goods.  The company thinks that doing so will generate greater health confidence from consumers, by offering greater transparency with regard to the contents of a products’ ingredients.  Click here to see the Supermarket Guru story. 

Implications:  This move should tell us—or at least, tell Safeway—just how much consumers care, are aware, or compare different food products.  But the move alone should generate goodwill from folks who are focused on their Self-Health and Well-Being.

What are you trying to hide, as a company, product or service?  If the answer is, “nothing,” you might ask whether putting your back-story on display for everyone to see… as having nothing to hide is akin to having something to brag about!

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Contrary to history and logic, major crime fell during recession

Traditionally, when the economy falls, crime goes up.  But that has not been the case in recent years—at least with violent crimes—as the U.S. crime rate for things like murder and assault have actually fallen.  That’s according to this recent story from the New York Times (click to link).

Implications:  Note that this story does not dive too far into things like theft or burglary… crimes that might be reasoned as a reaction to economic difficulty.  I’ll make it my assignment to look into those rates for the recession period, which I estimate to be late 2007 through early 2010… when those figures are available.

I wish there was a survey—absent the crime rate—which investigated the degree to which people felt secure during the recession.  (Editor’s note:  Our former home was the target of a break-in in early 2009.)

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: Something fishy is going on

As I continue to clean up my newsletter in-box from this week, I came across a story from Marketing Daily, indicating that consumers would be willing to pay more—both in taxes and in food prices—to make sure their food supply is safe.  Click here to see the full story.

Implications:  Again, self-regulation seems like a good idea to me.  The company or industry category which is pro-active about transparency and safety is likely to gain favor among consumers.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

In the move from field or factory floor to the modern workstation, workers have gotten bigger

A workplace that is less physically demanding is now cited as another major contributor to obesity, according to this recent story from the New York Times.

Click to see the full story. 

Implications:  This NY Times article presents another angle of attack for anyone who is promoting health-consciousness, fitness, or weight-related products and services.  Remember that working out may not be about physique… but simply: staying healthy.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Some companies let their marketing grow a little older

A recent New York Times story featured examples of companies that have begun to target older consumers.  Click here to see the full article.

Implications:  The Baby Boom generation has been a favorite target for many marketers since the day were born.  Now, as they head through midlife and into their 60’s, this cohort of consumers will continue to receive attention.  But beware the term “upper demo.”  Because today’s 55+ consumers look very little like their parents or grandparents did at a similar age. 

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Consumers delay healthcare, insurers profit (for now)

Among the purchases that were deferred or delayed in response to the recession:  Medical Procedures, according to a recent story from the New York Times (click to link).

Implications:  The idea of pent-up demand seems easy to grasp for things like furniture, automobiles, clothing or appliances.  But healthcare is not immune, either; a fact that has brought profit to insurance companies, at least until such time as patients decide to get caught-up on their overdue procedures.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: Healthcare changing channels

This site has offered a number of stories about the changing face of medicine (see the Healthcare set by clicking here).  Today’s Marketing Daily features a story about the growth of in-store clinical services at chains like Walgreen’s, CVS and Riteaid.  Click here to see the article.

Implications:  This is interesting not only to the (previous) providers of vaccines and other routine treatments.  It should be interesting, too, to those health care providers that rely on traditional physicians for their referrals. 

If you run a specialty orthopedics office, a strip-mall MRI facility or other specialized healthcare office… could your referrals be coming from a different source than they were five years ago?  If revenue is up more than 80% at the chain quick-clinics since 2005—as stated by the Marketing Daily story—one must assume that at least some diagnoses will increasingly occur outside the conventional doctor’s office.

Perhaps some specialty healthcare providers will have to take a more retail approach, with regard to patient marketing; doing so could help make-up for referrals which might not be as likely to travel through traditional channels.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Independent healthcare is not feeling well

Last week, I came across an important article about the diminishing number of private-practice physicians in the U.S.  The story cited the costs involved—in both dollars and effort—when a doctor is trying to decide between opening a private practice or going to work for a large health-management organization.  Click here to see the story, which appeared in the New York Times.

Implications:   In case you hadn’t noticed, personal healthcare is becoming less personal.  If your doctor knows who you are and a little bit about you without looking at your chart, you are likely to be the exception to the rule. 

This story offers a preview of the impact that is likely to follow cuts to Medicare and private-sector health benefits (which seem to be the trend):  Hospitals and clinics will place increasing importance on operational efficiencies.  More health centers will use a team approach to treatments and scheduling… and those “between the lines” issues that cannot be found on a medical chart will increasingly be managed by the patient, herself/himself.

Does your company, product or service empower the consumer to take charge of their own wellness?  I’m thinking about things like a heart healthy menu at the restaurant or wholesome offerings at the grocery store… or any aspect of what you sell that contributes to physical fitness and overall wellness.  In the coming years, these product/service attributes are likely to be more and more valued by the consumer… as they rediscover an ounce of prevention is worth a pound of cure.

NOTE:  Another NY Times story, recently, exposed the nature of the sales process used by some pharmaceutical and health device companies.  Click here to read that story, as this issue, too, may influence consumers to ask questions and take action.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Will less salt bring more health-conscious customers to Subway?

As baby boomers move through their 50’s and into their 60’s like a pig through a python, issues like heart health and hypertension become even more important.  That’s why I’m interested by Subway’s recent move to reduce sodium in much of their product line, according to this story from Marketing Daily (click to link).

Implications:   Trans fats and kid’s meals were only the beginning; consumers are becoming more educated about what it means to eat healthy, and we can expect those lessons to result in new expectations for the restaurants, packaged goods, and grocery stores they buy from.  Do you agree?  Does your company, product or service offer a health-based benefit that you're not talking about yet?  Should you consider adding that ingredient to your mix of marketing messages?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.