By Wes Wilkes
Many nations’ healthcare sectors are growing at a pace that significantly outpaces that of their GDP. Meanwhile, market players face increasing competition. Healthcare stakeholders are inflexible in their demand for full and continued attention to cost reduction while increasing value.
The Changing Rules of Competition
In 2013, healthcare companies navigating this complex ecosystem will begin to compete in different ways. They will change their growth strategies, reach out to new customers with evolving value propositions, and re-focus on the role of the manufacturer. Such approaches will require a deeper evaluation of the role of brand–and how it can help companies compete as the healthcare space shifts.
GOING VERTICAL: A NEW APPROACH TO COMPETITION
As healthcare companies are squeezed to deliver growth and innovation, they must look well beyond the more traditional horizontal integration strategies in 2013. They must focus on achieving growth through the acquisition of similar companies.
Furthermore, healthcare organizations are now being forced to think differently about how they expand their realm of influence and financial growth. Going forward, they must explore new positions in the greater supply chain for growth opportunities. Certain organizations are already tracking in this direction. Cigna now has its own web-based pharmacies. Kaiser Permanente is advancing its vision of fully integrated care by building out their large network of ambulatory care facilities, hospitals, and pharmacies. Even private equity firms are integrating digital technology supply chains to offer a new suite of services to the healthcare sector.
These approaches require a renewed examination of the role that brand plays, not only with newfound audiences, but also as a key incentive for future partnerships and acquisitions.
"InterbrandHealth expects to see a continued migration toward the wellness space in the year ahead. Healthcare companies will increasingly shift their brands from a focus on disease to a focus on health."
A HEALTHY FOCUS ON VALUE
The target customers of InterbrandHealth’s clients are fundamentally changing as well. For the first time, health plans, EU payers, hospital systems, and physician networks are beginning to supplant individual physicians and consumers as the primary target for numerous healthcare companies, especially in the U.S.
Certainly, individual physicians and consumers need to understand and develop relationships with brands in order to generate demand, but payers and provider networks are now the gatekeepers to the physician and consumer audiences. Healthcare companies need to radically rethink their value propositions as they evolve their focus to meet the needs of these new entities.
Those of us at InterbrandHealth expect to see a continued migration toward the wellness space in the year ahead. Healthcare companies will increasingly shift their brands from a focus on disease to a focus on health. While this is certainly a positive change, there is one caveat: this wellness space has its limits, especially in its ability to drive differentiation. The real winners will be those healthcare organizations that can extend their promise from physicians and consumers and offer the value story around patient outcomes that payers demand.
A HIGHER CALLING: PLATFORMS VERSUS PRODUCTS.
As the customers of InterbrandHealth’s clients change, so do our clients’ respective offerings. Forward-looking and progressive healthcare companies are shifting from promoting individual products to selling more holistic disease management platforms. The year ahead should bring a new wave of efforts to redefine product proposition. Soon, more and more healthcare companies will ensure their products are surrounded by platforms that educate and provide additional services.
Sanofi, a global and diversified healthcare organization, is one such company. It has approached the treatment of diabetes, for example, more holistically by supplementing the products it offers with educational tools, disease management tips and digital tools for building social communities. Merck, too, is tackling major women’s health issues. The Merck for Mothers partnership with the United Nations gave Merck a bigger platform to foster engagement around its portfolio of women’s health products.
Alongside the shift to platform offerings, the manufacturer brand is entering a new era. Traditionally limited to B2B relationships, the manufacturer brand will now play a greater (and more noticeable) role with these platform offerings. As such, InterbrandHealth expects to see healthcare organizations putting their energy into defining and differentiating their manufacturer brands in 2013 and beyond.
As the level of competition increases in the global healthcare marketplace, so do the opportunities. The savviest of healthcare marketers will take the time needed to examine the role their brands play in defining the sector’s new rules of engagement.