What Verizon can teach hospitals about coping with rapid market change

Hospitals can take some lessons from Verizon, the once "stodgy" utility company that is now seizing new business opportunities and reacting to meet new consumer demands.

The way the telecommunications and media industry is rapidly changing and the moves Verizon is making to position itself for the future has lessons for healthcare providers, according to an article by Kenneth Kaufman, chair of Kaufman Hall & Associates LLC, in Skokie, Illinois.

In telecommunications, the saturation of providers and lack of new markets have resulted in price-based competition and consolidation, says Kaufman in the Hospitals & Health Networks Daily piece. The same can be said for hospital markets in many regions.

Here are two examples:

1. Move aggressively into nontraditional areas. "Verizon is aggressively expanding its expertise into new services that, while complementing its core business, show a significant departure from tradition," says Kaufman. For example, Verizon has taken steps to form its own mobile video service and is offering "skinny bundles" with fewer channels at $55 per month. Similarly, healthcare organizations must think beyond their traditional roles and activities.

That will likely require them to expand into retail and virtual care, he says, to compete with alternative retail pharmacy clinics and telehealth companies.

2. Make major changes to meet consumer expectations. Verizon has committed to meeting new consumer expectations and healthcare organizations must do the same, he says. "In healthcare, although patient satisfaction has long been a measure of success, most organizations are unprepared to meet the kind of radical changes in consumer expectations arising from the Internet," he writes. For many, future patient satisfaction will require new information about consumers' health, attitudes and behaviors. Hospitals need to prepare with new capabilities in service planning, patient engagement and virtual care, he says, and reshape services to provide more convenience, choice and flexibility.

It's not just the telecommunications industry that has lessons for healthcare. Take the home improvement store Lowe's, which offers incentives to employees who use generic prescriptions and Starbucks' commitment to catering to individual customer preferences. 

Other companies have lessons for patient engagement, such as Zappos, with its transparent business practices and attention to individual consumers or Disney's increased personalization and transition to digital identification.

To learn more:
- read the article

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