How Affiliate Marketing Is Destroying Healthcare

health affiliate marketingThere is an emerging trend in the healthcare industry that doesn’t receive a lot of attention, but is incredibly insidious, and perhaps even more damaging to the level of care provided in this country than the obstructive health laws and corporate mergers that pay attention only to the bottom line, and not the overall well being of the patients in the hospital.

What is this trend, you ask: affiliate marketing.

Why Affiliate Marketing Is Bad for the Health Industry

Affiliate marketing, if you’re unfamiliar with the term, is a form of marketing where any individual can get paid commissions for promoting products.

This happens every single day online, and the industry as a whole represents close to $20 billion in transactions every year, which means that it accounts for a considerable portion of consumer spending via the internet.

The problem is that anyone with a website, from hobby bloggers to professional marketers, can promote products, without needing to have any knowledge of the product they’re promoting or the implications of using that product.

That might be ok when it comes to deciding which camera to buy or which backyard grill is going to suit your needs best, but when it comes to health products there can be incredible ramifications.

Many of these marketers promote products based solely on their commission and conversion rates: that is, they promote the product that is going to make them the most money, regardless of what that product actually does. For an example, just take a quick look at the products offered on this health affiliate commission list.

Any certified health professional will quickly recognize that most of these products are not helpful and, in some cases, potentially harmful to a patient.

Consumers then purchase these products, which could have adverse effects. See this blog on Healthy Affiliate Marketing for more information.

In our view, there are two things we can do about this. The first is to educate doctors and other health professionals about the widespread nature of the problem, and how the process works.The second is to encourage consumers to always seek advice from a certified medical professional before making any purchase decisions.

These two forms of outreach, focused primarily on awareness for the time being, may be our best hope for curbing this problem, and returning to a state where doctors’ opinions are valued more highly than those of a blogger…at least when it comes to medical advice!

Hospitals Seek Ways To Encourage Home Health and Fitness Routines

Over the last several years, since the inception and legislation of health reform that is broadly referred to as Obamacare, hospitals have been looking for ways to encourage individual patient health before being admitted to the hospital.

This focus on prevention, while once counterintuitive to many hospital corporations fearing a loss of customers, has now become mainstream, and is an important aspect in reducing the overall healthcare costs.

In this post I’ll look at why hospitals might encourage home health and fitness routines.

Why Hospitals Should Encourage Prevention Health

The first issue to consider is why a hospital corporation, with a bottom line to hit, would be interested in promoting in home health.

This idea – that prevention yields fewer customers, and therefore fewer profits – originally saw a lot of attention, but has since waned, due to its inherent flaws.

According to a recent study of hospital costs and insurance reimbursement payments, many of the heaviest losses faced by hospital corporations came from individuals who were uninsured, but were admitted to the hospital for minor ailments.

Most often, these individuals fall into the bottom 30% of income earners, and have little to no education about how to prevent their ailments at home, for a fraction of the cost. Instead, these patients come to the hospital, are admitted without insurance, and the hospital corporation is left to deal with some, if not all, of the costs of treating the patient.

For more information on home healthcare, watch this video:

What To Encourage

The number 1 point that hospitals can encourage is to promote safe and healthy home exercise routines.

The number 1 cause of hospital admittance comes from individuals who are generally non-active, and for whom a simple exercise program would cure many of their ailments, from obesity to diabetes, heart disease, muscle tension, and much more.

The best programs are those that include a combination of workout and diet aspects, encouraging the patients to get active and pay more attention to the food they’re eating.

For example, some of the easily available programs include:

and many more. The point is simply to encourage patient investment in low-cost programs that are far less than their equivalent copay for any admitted medical treatment, and thousands of dollars less expensive than the full cost of their treatment, including the costs absorbed by the hospital corporation.

Hiring Physicians vs. Buying Physician Practices: What To Consider

One question that many hospital corporations and non-profit organizations face comes down to how to onboard physician services into their organization.

While traditionally hospitals have worked in partnership with third party physician practices, usually consisting of fewer than 10 physicians per practice, there has been an increasing trend in developing teams of in house physicians.

In this post I’ll cover why you might want to consider hiring your own physicians, and the best way to go about it.

Why Hire In-House Physicians?

hospital physician hiresFirstly, let’s look at why a hospital might want to employ their own physicians.

Despite some minor administrative headaches involved and the need to setup a separate admin department to deal with physician payrolls, insurance claims, and malpractice issues, there are a number of economies of scale that work in the hospitals favor…if the physician acquisition is done right.

This is due to the fact that, on average, physician and surgeon pay is decreasing across many specialties, meaning there is opportunity for hospitals to employ top quality doctors at a fraction of the cost it once would have been.

Furthermore, though the initial setup costs are high for a hospital newly establishing physician employees, many of those costs are fixed, and scale easily once the early infrastructure is in place.

The chart above shows an approximate distribution of physician/hospital relationships.

Advantages of Buying an Existing Practice

By far the easiest way for any hospital to add physicians to its team is for the hospital to purchase an existing physician practice. Most commonly, this purchase occurs with a practice that has physicians that are already operating at the hospital, or even at multiple hospitals within the same brand.

By purchasing the practice, the hospital not only gains immediate access to the surgical talent, but also has the opportunity to deny that access to competing regional hospitals. This is especially true in cases where multiple hospital corporations are competing for the same physician group. Thus there can be significant competitive advantage to purchasing the practice.

Advantages of Individual Surgeon Hires

However, there are also a number of advantages involved when a hospital individually hires new surgeons directly.

Most notably is the cost savings. More often than not, purchasing a physician practice requires heavy upfront costs, and deals are often structured where the physicians (the owners of their individual practices) are granted a mix of stock and cash in return for the practice, as well as lucrative contracts that span several years.

For many hospitals, this upfront cost is unbearable, which makes individual hires more appealing. In this case, the hospital is responsible for annual salaries, without the initial premium involved. The disadvantage, however, is that often times these hires occur in addition to other practices operating at the same hospital in the same field, and there can be stark competition to gain a foothold in that specialty, compared to the established practice.

Understanding Complexities of Hospital Facilities Management

As Health and Hospital Management consultants, we see a wide range of problems that deal with the complexities of hospital facilities management, and the diverse solutions those disparate issues require.

In this post, I’ll go over a few of the most common concerns and considerations we face when clients bring us on.

Personnel Management

The first, and biggest issue that many hospitals face comes in the form of personnel management.

While the problem takes many forms, the basic origination of the issue is fairly straightforward:

Hospitals need medical experts to manage their organizations, but medical experts are rarely trained in professional management practices

In other words, in order to be effectively run, hospitals need the advice and input of their doctors and other leaders in the health industry. They need individuals who deeply understand the leading trends, guidelines, and best practices of the industry. That only comes from doctors and other highly trained medical professionals.

However, most doctors, while exceptionally bright, have no real experience or training in management. They don’t usually have any formal education in management topics, nor do they know how to effectively deal with issues such as HR, finance, or other “business” aspects of running a hospital.

That’s where we come in. We combine the business and health experiences, to work with your team and figure out realistic solutions to your problems.

Private Practice Acquisition

Another leading issue in hospital management is the growing trend for acquiring smaller private practice groups.

This trend has spread across the nation in the last decade, and both non-profit and for-profit hospital corporations are actively seeking doctor practices to acquire.

we are often contracted either to help identify and establish opportunities for these acquisitions, or as an independent third party to help negotiate a solution favorable to both parties, and implement a smooth transition.

To our knowledge, we are the only leading professional services firm that specializes in private practice acquisition. Our experience and knowledge of the industry, current trends, and how to price such deals is unparalleled.

Contact us to learn more.