Sustainability and health care on parallel tracks

For me, the biggest takeaway was that sustainability professionals face the same challenge that is starting to top the list at health care institutions.  That is, motivating lots of individuals to change their behavior.

In health care, the focus is on motivating patients to comply with their treatment plans.  In sustainability, it means motivating employees to make lots of small changes such as re-using and recycling both at work, and at home.

From central control to broad engagement

As one panelist pointed out, from a sustainability perspective, leading organizations have done the simple things that they can control centrally (e.g. redesigning and retrofitting buildings).  Now they need to turn their attention to broad employee engagement.

Another panelist provided confirming evidence from a conference she attended the previous week on energy and climate change.  There, she learned that “improving employee engagement” is now the top priority for Chief Sustainability Officers.

Behavior change techniques that work

So, although there was lots of fascinating content at the breakfast seminar, this post centers on techniques for changing employee behavior to increase sustainability–that have, or may have, parallels in health care.  Examples include custom incentives, social influence, use cases, gamification, sequencing, and erecting barriers to undesirable behavior.

Custom incentives

One of the panelists advises others to “meet employees where they are”–advice near and dear to this marketer’s heart.  She’s found that employees are often resistant to changes that employers may see as desirable.  For example, employees may be eager to adopt organic mattresses or gardening practices, but not as keen on taking public transit.

Health care organizations have reached similar conclusions.  Many now provide custom incentives to motivate patients to reorder medications and comply with treatment plans.

Some hire third parties to analyze past behavior to determine what they need to do achieve optimum outcomes.  Then, they customize incentives accordingly.

Social influence

Perhaps the best quote of the day was that people prefer “fitting in” to rewards.  In both sustainability and health care, practitioners are finding that people are motivated to match their peers’ behavior.  One of the panelists credited social media for making sustainability “visible” and “personal”.

Use cases

Susan Hunt Stevens, CEO of Practically Green, noted that behavior theory recommends showing people how “someone like them” made a change.  Her company’s blog uses individual storytelling to “bring an action a day to life”.

Gamification

Often closely related to social influence is gamification.  Sustainability and health care professionals alike are experimenting with games that enable individuals to compete and earn rewards and recognition for exhibiting desirable behavior or achieving preferred outcomes.

Sequencing

Moderator Jim Nail told us that he learned to market using the AIDA acronym: Attract, Interest, Decide, Act.  Today, he says sustainability professionals are finding it’s often effective to get people to act first, because individuals often identify with the actions they take.  I know professional fundraisers employ this technique by seeking small  donations first.   I don’t know if there are health care examples but we’ve all heard to “fake it until we make it”.

Erecting barriers to undesirable behaviors

Monica Nakielski, Sustainable Initiatives, Partners Healthcare said that her organization also sometimes just prevents undesirable behavior.  For example, departments can no longer order certain toxic supplies. Health care parallels may be safety caps on medications or stocking the refrigerator only with nutritious food.

Other techniques

Panelists discussed two techniques that have changed behavior at a macro level, rather than at an individual level.  Frank Marino, Corporate Environmental, Health and Safety Manager, Raytheon, told us that his company had executed sustainability initiatives in MA and NJ, but not in Tucson, where there were no regulatory incentives.  In health care, it took regulation and federal incentives to accelerate EHR adoption.

Several panelists discussed the impact of data transparency.  They noted that “greenwashing” is less common, now that reporting requirements make it easy to spot inconsistencies in sustainability execution.  Health care advocates are also seeking data transparency to stimulate competition and drive behavior change.

Kristine Kalaijian, Director, Environmental Compliance and Sustainability, Philips Electronics NA emphasized the importance of integrating sustainability into everything the company starting with the company’s overall business objectives.  This practice provides a stretch goal for other organizations desiring to achieve sustainability–and the health care industry as a whole.

Related posts:

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3. Health care social media is in its infancy says panel
4. Can B2B marketing strategies for the complex sale help improve health outcomes?

So, it is with great interest that I attended the Massachusetts Technology Leadership Council’s seminar  on How Technology is Enabling Dynamic Community Care Teams.  My goal was to learn more about:

• the kinds of care providers are delivering at patients’ homes and in the community,
• why pundits view home and community-based care as essential to improving health outcomes and minimizing costs
• which technologies contribute to delivering these results and why

Care delivered in the community

As it turns out, the patients most likely to receive care in the community are those that are well, recuperating, or have a chronic condition.  For these individuals, the key to getting better is ensuring that their care progresses according to plan.

Usually, a health care provider develops the plan upon examining the patient in a clinical setting.  The community-based care centers around:

• ensuring patient compliance,
• monitoring specific measures to ensure that patient is achieving desirable outcomes, and
• alerting providers to either problems or unanticipated delays in recovery.

Why community-based care is cost-effective

Community care is cost-effective because its administration doesn’t depend on the technical or human resources available only in higher-cost inpatient or outpatient settings. Instead, providers can address patients’  needs with a combination of media, remote monitoring, and lower cost community care providers.

Technology can aid in delivering media and remote monitoring, and sometimes reduce the number of visits lower-cost community care providers need to make to the home.  This means that patients can receive care where they prefer to get it: in a familiar setting and among friends and family.

It’s all about the relationship

Perhaps the greatest surprise of today’s technology conference is that the importance of human relationships took center stage.  According to keynote speaker, Rick Siegrist, CIO at Press Ganey, patients’ satisfaction  and health outcomes depend most on the emotional connection with the caregiver.

As the speakers explained, patient engagement matters more than anything else.  Patients need to understand their care plan.  They have more control over their recovery than anyone.

Some need a personally meaningful goal to motivate them to act.  As one speaker said most patients are more interested in attending an upcoming family event, such as a wedding, than improving the level of a medical statistic.

Patients  need confidence that they can manage the disease process.  And according to another speaker, there needs to be a sustained connection, so that patients can interact with their health care providers when needed.

Technology is great when it works

As the speakers noted, technology can help providers deliver the right information at the right time without requiring a separate home care visit.   And, equally important, technology helps strengthen connections between the patient and the care team by facilitating the exchange of information each party finds valuable.

Technology also helps enforce clinical protocols.  For example, it can prompt providers to get answers to important health status questions they might otherwise forget to ask.

Desired improvements

Nevertheless, both panel and audience members expressed frustration with technology gaps and complexity.  At present, much of the technology is still hard to use. Moreover, it floods caregivers with data–rather than presenting just the information they need, the way they need it.  There is also a need for industry standards.

For technology to be truly useful, caregivers  need filtering, the ability to customize content and presentation by user, and full integration with their own and others’ systems.   Regulation will drive some of these changes.  As one panelist said, “Look for future releases.”

Related posts:

1. Putting health care EMRs in the cloud
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3. Health Care Information Technology: The prescription for successful implementation
4. Health care social media is in its infancy says panel

The topic of the 8th annual Connected Health Symposium was timely: Driving Quality Up and Costs Down:  New Technologies for an Era of Accountability.  Nevertheless, what made it a great conference were the fresh perspectives it brought to the fore.

Measurement, analysis, and communication are imperative

Brent James, the Chief Quality Officer at Intermountain Health Care, set the stage by describing how he and his employer, Intermountain, have succeeded in simultaneously improving health care quality and decreasing costs.  He credits this achievement to the incorporation of baseline protocols into the clinical workflow, followed by continuous improvement.

According to James, despite the explosion of knowledge and technology over the last 200 years, modern medicine has continued to rely on individual’s judgment rather than measurement.  James observes that this ongoing dependence on subjective recall has led to tremendous variation in the practice of medicine, a paucity of valid clinical knowledge about best treatments, long lags between identification of best practice and its dissemination (more than 15 years), and a “striking inability to do what works”.

The solution, James argued, is building standard baseline protocols into clinical workflows, which individual physicians are then free to override.  James says that this methodology is effective because standardization allows clinicians to spot what works–something they can’t do when everyone practices medicine a different way.

Then, it’s a matter of iteration.  Over time, employment of this process has helped Intermountain achieve better quality and lower costs than many of its larger, better-funded peers.

Better health depends on reducing income disparities

Next up was Kate Pickett, co-author of The Spirit Level: Why Greater Equality Makes Societies Stronger.  Her perspective is a macroeconomic one.

Drawing on a number of statistics, Pickett argued that income disparity is the most powerful predictor of health at a societal level.  Displaying chart after chart, she demonstrated that citizens of countries such as Denmark and Japan have better health, and life expectancies, than citizens of wealthier countries such as the US and the UK where the income gap, from richest to poorest, is greater.

In a follow up interview, she offered possible explanations.  Among these are that inequality erodes trust–and that people in lower strata of society experience anxiety and stress when they believe there is no hope of upward mobility.

Many more perspectives covered

This post summarizes some of the insights from the first two keynotes.  Over the course of two days, each presentation added a different way of looking at the issues related to improving health care quality and cost.

The business of health care

There were sessions about reimbursement, medication adherence, accountable care, and financing health care.  And, there were lots of demos on innovative technology.

The psychology of motivating change

In addition, however, there were a number of talks about motivating desirable behavior.  Examples included sessions on using games to promote better health, biofeedback, self-quantification, and even tips for effectively communicating health information to the distractible multi-tasking consumers of health information that make up the next generation.

Connecting the dots

I found that I spent much of the conference thinking about not just the topic at hand, but about the implications of each talk for other topics discussed at the conference.  Luckily, the event producers recorded many of the panels, and presentations, as there was a lot to absorb in just two short days.

Related posts:

1. Enabling health care delivery in the community
2. Motivating Behavior Change: Where the rubber hits the road in health care and sustainability
3. New social media site invites users to review public health care services
4. Putting health care EMRs in the cloud

Photo courtesy of Christian Sann, SCVNGR

By Barbara Bix

To one side of me sat a business development professional from a detective agency. To the other side, was an owner of an eye glass store in a downtown mall that seeks to make his store a “destination”. Both had come to learn about how to use social media to market their businesses. Moreover, the packed ball room was standing room only.

“All star” panel on social media

This morning,WBZ radio hosted a fantastic panel on social media. One of the things that made it fantastic was the all star panel: Anthony Silva (moderator), Paul Gillin, Laura Fitton, Mike Troiano, and Seth Priestbatch (left to right as they sat on the stage).

Their individual and combined knowledge of social media is incredible and the meeting was packed with great soundbites and case examples. In fact, many of these gems were grist for individual blog posts–even for an experienced user of social media.

Social panel about social media

The other thing that made it fantastic is that most of the panel was Q and A–that is a social panel about social media. In fact, it is this short answer format that may have engendered so many great soundbites from the incredibly articulate panelists.

Leveraging the Twitter Stream

Since I do want to return to these soundbites at a later date, I wanted to capture them for posterity. I took my own notes but captured the Twitter Stream as insurance by searching Twitter on the hashtag #wbzbreakfast–and then editing the stream to include the soundbites that most resonated for me.

Soundbites courtesy of the audience

You’ll find some of these hashtags below. I’ll be back in later today to update this post with my notes and to add pics and speaker links. Thank you to WBZ, Anthony Silva, the panelists, the #tag tweeters, and all who attended for making this such a valuable meeting!

motgnarom Tom Morang
#wbzbreakfast @Pistachio listen, learn, care, and serve

Steve Garfield
stevegarfield Steve Garfield
Interesting. RT @Bobbiec: #wbzbreakfast @pgillin “we can’t just be on social media, we need to be interesting”

Matt_Sully Matthew Sullivan ?
By a show of hands, over 90% of the #WBZbreakfast audience heard about the event from radio, the others from #socialmedia
57 minutes ago

ChrisMLindgren
ChrisMLindgren ChrisMLindgren
Be creative @pistachio Bakery in London sends a Tweet when latest item has just come out of oven #WBZbreakfast #HotBlueberrymuffins

Chris Requena
CERequena Chris Requena
#WBZBreakfast @SethPriebatsch: Easier to lead a clean,wholesome life & share everything on facebook than to understand the privacy settings!

Bobbie Carlton
BobbieC Bobbie Carlton
#wbzbreakfast for your information Twitter handles for the panel @Pistachio @miketrap @pgillin @sethpriebatsch
1 hour ago

ChrisMLindgren
ChrisMLindgren ChrisMLindgren
Tying engagement activity to transactions, swipes #WBZbreakfast See Social Sales Exceed Social Traffic marketingcharts.com/direct/social-… #WBZbreakfast

ChrisMLindgren
ChrisMLindgren ChrisMLindgren
On negative feedback: Walking around w/ spinach in teeth; If you don’t know what’s wrong you can’t fix it #WBZbreakfast #Socialmedia
1 hour ago

Whole Foods Dedham
WFM_Dedham Whole Foods Dedham
And @pgillin explains that acknowledging the negative is important because it engages and can head off a crisis #wbzbreakfast #socialmedia

Steve Garfield
stevegarfield Steve Garfield
Right. RT @GrahamSpector There will be #Socialmedia comments you shouldn’t respond to #wbzbreakfast

Bobbie Carlton
BobbieC Bobbie Carlton
#wbzbreakfast @sethpriebatsch shares “never feed the trolls” truism. @Pistachio advocates pixie dust so others will rush to your defense.
1 hour ago

Karen Covey
KarenCovey Karen Covey
ditto! WFM_Dedham Love the cooking analogy! @pistachio explains the ‘mise en place’ you need to be effective with #socialmedia #wbzbreakfast

Kristin Bedard
kristinbedard Kristin Bedard
anonymity is gone, with #socialmedia we’ve returned to accountability. it’s refreshing, healthy. – @pistachio #wbzbreakfast

Graham Spector
GrahamSpector Graham Spector
Good spin on privacy issues. #wbzbreakfast

Chris Requena
CERequena Chris Requena
#WBZBreakfast @pistachio Emotional connections are stronger b/w people than b/w people & brands. Get your customers to connect w/each other!

Meg McDevitt
OhThatMeg Meg McDevitt
Strong emotional connection brand is rare. Get your consumer & brand to connect on an emotional level. #wbzbreakfast

ChrisMLindgren
ChrisMLindgren ChrisMLindgren
Game mechanics as means of engagement in social media #WBZbreakfast

schneidermike
schneidermike schneidermike
Turning the police dept home page into Mafia Wars would be awesome -@sethpriebatsch #WBZbreakfast

ChrisMLindgren
ChrisMLindgren ChrisMLindgren
Social media has made us microprocessors; figure out how you can add value #WBZbreakfast
2 hours ago

Graham Spector

ChrisMLindgren
ChrisMLindgren ChrisMLindgren
Customer is in control; social coming to every desktop; build literacy thruout orgs; #wbzbreakfast at www.cbsboston.com/breakfast

Whole Foods Dedham
WFM_Dedham Whole Foods Dedham
Tidbit from #wbzbreakfast from @pgillin: social media is forcing businesses to react & change. There is no going back.

Christian Sann
csann Christian Sann
I just snapped a pic at Sheraton Boston Hotel. #SCVNGR http://scvn.gr/leJOXk (@sethpriebatsch on a social media panel for #wbzbreakfast. )
2 hours ago

Innovation Nights
MassInno Innovation Nights
#wbzbreakfast @pgillin “social media is a huge global campfire” and “the customer is in control”

rt @miketrap: Social Marketing panel w @Pistachio, @sethpriebatsch @pgillin. Livecast at www.cbsboston.com/breakfast #WBZbreakfast

Additional soundbites that caught my ear

Here are some of the soundbites I scribbled down.  Unfortunately, I didn’t always catch who said what.  But if you were there, please add attribution n the comments:

“You can’t market your way out of bad reviews”

“Build literacy throughout your organization: anyone can screw up” @pistachio

“We add a game layer  on top of the world” @sethpriestbatch

“Get people to meet in the context of your brand” @paulgillin  (?)

In referring to static websites “You were the czar of your content museum” @miketrap

“A negative review legitimizes positive reviews” @paulgillin

“A good measure is when the check (money) is a transaction” @sethpriestbatch

“Give yourself permission to experiment”  @miketrap (?) @priestbatch (?)

“Get involved, Twitter (?) Social Media (?) is hard to master from afar”

Looking to learn how you can use social media to market your business?  View our social media marketing services.

Related posts:

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The Massachusetts Health Data Consortium’s spring workshop on Analytics, Data and Accountability centered on how data and analytics must change as the U.S. health care system moves from paying for volume to paying for value.  Nevertheless, the ultimate message may have been, that as always, it takes people, process, and data to effect dramatic change.

Clearly, the devil will be in the details of the integration of these three elements.  The conference was rich with case studies of what works and warnings about where the challenges lie.

Employers seek health care value vs. volume

Dr. Allan Gorroll, MD gave a great overview of the issues from the perspective of practicing primary care physicians to set the context for the day.  He pointed out that employers, as the entities that foot the bill, are driving the change.

Clinical data trumps transactional data

Dr. Gorroll noted that we will require clinical data to measure performance and outcomes, rather than the claims-based transactional data we are gathering today.  Moreover, it must be reliable, available at the point of care in real time, and risk-adjusted by patients’ health status.

Need transparent, meaningful, actionable metrics

The metrics must be based on evidence and clinically meaningful to doctors and patients–and agreed to by all stakeholders.  Metrics need to measure the percentage improvement, adhere to rules of statistical significance, be transparent and actionable, and measure the full spectrum of care.

Admirable goal, much work remains

In addition to holding providers accountable for health outcomes, Dr. Gorroll said we will need to match risk and reward and reform liability.  My conclusions:  the goals are admirable; success depends on strong data; obtaining the necessary data will be challenging–and require substantive change by all stakeholders.

It takes time to enact improvements

Dana Gelb Safran, up next, spoke about Blue Cross Blue Shield of MA’s Alternative Quality Contract.  This 5-year contract holds providers accountable for health status across the continuum regardless of where patients actually receive their care.

Must pay for managing quality as well as cost

Providers receive a global payment for care that BCBS ties to performance and performance improvement.  Rather than growing by the health care inflation rate, increases depending on the much slower growth of the Consumer Price Index.  Providers benefit financially when they reduce the cost of the care they deliver, follow certain evidence-based processes, and achieve specific outcomes.

Providers amenable to pay for performance

Building on Dr. Gorroll’s talk, she noted that providers are anxious to receive pay for performance.  In fact, she said that the physicians that piloted her organization’s programs asked that outcomes measures get triple weight.

Few reliable health care measures exist

One of the difficulties is that few totally reliable measures exist.  BCBS, therefore, uses an approach developed by Dr. Beckman that looks at performance variation for very narrow episodes of care where guidelines do exist.

Change begins with awareness

What BCBS has found is that providers were previously unaware of the degree of variation of their practice with their peers.  Receiving this information starts a conversation that ultimately leads to change.

Money talks

Safran reports that the approach is working.  Providers with AQC contracts are outperforming the organization’s other providers.

Commitment and access to data essential

While initial improvements came from actions such as choosing less expensive sites of care, they are now beginning to see changes in the actual practice of medicine.  Safran attributes success to leadership, use of reliable measures known to create value, and monthly access to health status data.

Data must be useful and compelling

Dr. David Goodman, MD MS from the Dartmouth Institute shared data to show how his organization reaches conclusions about the source of variation across regions.  In so doing, he described its use of small area data sets to minimize regional variations and data sets from multiple sources to mitigate weaknesses in each one.

In a compelling talk, using a number of case studies, he demonstrated that:

• Utilization varies by region even after controlling for health status.
• Differences in utilization account for most of the differences in per capital spending
• Utilization depends on provider supply

Nevertheless, like Gorroll and Safran before him, he noted change will depend on the availability of better data.  Key steps in overcoming resistance to findings include adjusting data for population differences and precisely attributing measures to particular providers.

All Payer Claims Data will provide the big picture

Seena Perumal Carrington from the Division of Health Care Finance and Policy provided an update on the Massachusetts All Claims Payer Database.  This and other regional databases will begin to address some of the data problems the previous speakers referenced.  In particular, these databases will address the whole population and the whole patient.  Achieving this goal will depend on collecting data from a number of sources and scrubbing it for accuracy and completeness.

Right care in right place: provide care at the community level

John Donlan of Steward Network Services described the initiatives his organization is taking to deliver the right care in the right place.  In most cases, this means serving more people in the community through health coaching, home care, and community hospitals.

Achieving results depends on credibility depends on data

Nevertheless, he told us success will depend on convincing stakeholders that they will receive high quality care in a community setting–and raising purchasers’ awareness of the premium they pay when their employees seek care outside the community.  Key parts of his strategy have been engaging physician leaders, attracting primary care providers, putting in place infrastructure to support care measurement and accountability, entering into risk-based contracts such as the AQC to get providers’ attention, and posting relative quality scores to show patients that local care is better.

Achieving results depends on closing the loop

At the same time, his organization is playing catch up on initiatives that support profitability under a fee for service structure.  Chief among these is reducing leakage by identifying sources of the problem and making it easier for providers to make referrals within the system.

Collaboration is key

Francois deBrantes of Health Care Incentives Improvement Institute summarized lessons learned from the Prometheus Pilots.  His message: there are a lot of moving parts to coordinate as organizations shift from health care volume to value.

Here are some of his main points:

• Payment reform requires massive change
• You need to have a strategic plan and stick to it.
• Step one is CEO engagement since business models must change first
• You can’t change what you can’t measure
• You need clean and complete claims and eligibility data to get a whole patient view
• Clinicians need actionable data in real time
• A comprehensive medical record is a must
• Feedback and comparative reporting assures practice improvement
• Profitability depends on quickly shifting entire organization from high volume to high margin

Perhaps his largest point was that providers and payers need to work together to effect change–as each needs data and services from the other.  Although it initially makes sense for them to upgrade their systems in parallel, he noted that eventually the two systems will need to merge.

The last presentations of the day brought in the pharmaceutical perspective.  Unfortunately, I was unable to stay for them.

Ultimately, we’re all in this together

Together, the presentations did a great job of stating the goals for health care reform, the critical success factors, and the challenges from all perspectives.  It also gave listeners a sense of the importance of greater collaboration among providers and between payers and providers.  It’s this type of integrated, evidence-based thinking that will accelerate the progress of health care reform.

Barbara Bix is a health care marketing consultant in the Boston area.  She specializes in working at the nexus of health care and technology.

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What do the statistics say?

I get statistics that show me:

If I were to dig deeper, I could find out more about visitors–where they hail from, what platform they used to find me, and perhaps even who they are.

I also know how many people signed up to receive my posts on an ongoing basis–and who has expressed interest in learning more.  What I can’t tell is whether or not they read my blog.

Shiny magazines on the night table

I always liken feeds to my blog  to that stack of magazines you used to have on your night table.  You remember, don’t you?

The magazines arrived all nice and shiny.  You took a quick look and vowed to read them later.

Then, eventually, you decided to de-clutter and trash everything you received before a certain date.  Your assumption was that if you hadn’t read it by then, you probably weren’t ever going to read it.

Indicators aren’t conclusive

Even though a lot of people subscribe to my blog, I really don’t know who actually reads it–or how often.  One could argue that I could infer the number of readers from the number of comments and retweets.

Nevertheless, robots can comment on blogs.  And, there are people that retweet blogs after just reading the headlines.  So, it’s hard to estimate how many blog posts, like the magazines of yesteryear, merely gather virtual dust before prospective readers either forget they exist, or delete them entirely.

Just looking…., thanks!

For that matter, I’m not sure how much stake one can put in “conversions” either–except for those that eventually turn into sales.  Just because someone enjoys your content, can you really assume that they’ll ever want or need your products or services?  I don’t think so.

So, why blog?

So, why do I blog?  For one, it helps me organize my thoughts.

For another, my blog gives prospective buyers that might not otherwise have the opportunity, get a sense of who I am, how I engage with my world, and what that world is.  Information, that should they also have an interest in buying, would likely be helpful.

Also, my blog attracts paying clients.  However, I only know that for sure, because I ask prospects what caused them to contact me.  So, in some cases “words may speak more than actions”–or be at least as reliable.

So, it’s great that the number of visitors continues to accelerate.  But, I’ll never know how many people read my blog–unless you want to comment below or give me a call…

Breakfast with Barbara

Wish you had a blog, but don’t have the time to capture the insights you’d like to share with clients and potential referrers?  Check out Breakfast with Barbara!

No related posts.

Moreover, most of this money came from investors reinvesting in later stage deals that they had financed in earlier years.  This caused Peter to ask how we will finance new deals in a highly fragmented regulated industry where solutions are selling at commodity prices.

The panelists

The panelists included a broad spectrum of clean tech executives: Dr. Marcie Black, CTO, Bandgap Engineering; Marty Flusberg, CEO Powerhouse Dynamics; Howard Nunes, CEO, Pepperdash; Stu Patterson, CEO Nexamp; and Tom Zarrella, CEO, Sustainx.

They discussed a wide range of issues from financing sources to business models to value propositions.  This post highlights some of the takeaways from the perspective of this B2B marketing consultant.

Company overviews

In the introductions, we heard a little about each company.  Powerhouse Dynamics is pursuing a consumer market, has 140 dealers in North America, and sells online at Amazon.

Howard told us Pepperdash is developing the first building management systems that make automated decisions, based on predictive modeling of long-term use patterns.  The company is self-funded.  He noted that sales were just under $3 million last year and that grant money is hard to get.  He said that 2200 companies applied for 26 grants last year.

Marcie relocated her company from Los Alamos because she felt being a part of a clean tech cluster is essential.  With the help of the community, she succeeded in raising seed and Series A capital from VCs who have been great partners.  Her company is aiming to increase the efficiency of solar energy to the point where it is cost-competitive with electricity.

Tom previously ran GT solar, where he achieved a 20x return for private investors.  His company, SustainX, is developing completely mechanical isothermal technology to address the grid-scale energy storage problem.  Where alternatives run on batteries, Sustainx’ solution is completely mechanical.

Stu is raising a Series A round from VCs for Nexamp.  Nexamp originally planned to target energy solutions for buildings.  After receiving several stimulus grants for solar deployment of waste water treatment, the company shifted its focus.  Going forward, he said the company will probably pursue both markets, although possibly as two separate companies.

Financing

From there, the panel turned to a deeper discussion of financing.  The panelists were raising money from a variety of sources including self-funding, stimulus grants, VCs, and angels.

They remarked that that raising money was particularly difficult now.  Howard was self-funding and hoping to raise additional funds from revenue.

Stu was minimizing his financing needs by partnering with developers that would work for sweat equity.  Marcie’s plan called for using existing manufacturing processes to constrict funding needs.

Martin raised $2.5 million, mostly from angels, a couple thousand dollars at a time.  Tom, on the other hand, raised the entire $20 million that he needs to take his company to commercialization.

Market heterogeneity

Next, the panel discussed the difficulty of operating in a heterogeneous market where regulations and growth drivers differ from region to region.  For this reason, among others, Marcie said she was also targeting overseas markets.

Utilities

The panel discussed some of the difficulties of selling to utilities.  For one, utilities move slowly, especially as pertains to IT.  They only do RFPs once every year or two so candidates need to wait.

Someone pointed out that buying an existing utility partner was a way to expedite the process.  Another panelist had worked with a Wharton class to tier utilities by the mandates they must meet.

Martin eschews utilities because they won’t buy products that are on the “other side of the meter”.  This is one of the reasons he opts to work with affinity partners (e.g. consumers, chains, HVAC distributors, etc.)  The problem is that it’s hard to get traction with small sales.

Growth drivers

Apparently, just like health care, clean tech is another industry with perverse financial incentives. Today, the focus is on $/panel; the problem is that customers buy “energy” rather than panels.  Also, everyone talks about roundtrip efficiency rather than return on capital.

Marcie noted that in the most mature segments, solar and wind, look at cost/kilowatt hour.  The Department of Energy however, is interested in the dollars per watt which creates a bias for less efficient cells.  Moreover, solar incentives vary by region across the globe.

Tom finds that with Sustainx, just as in the early days of solar, he finds that he has to build market benchmarks.  He finds that he also needs to develop a different value proposition for each market.

He warned Marcie that Asia avoids introducing new technologies and that you need to find companies with development lines in their manufacturing facilities.  She responded that there is a supply glut, lower tier will go out of business, and some companies will realize that they can get a major bump in efficiency and need to differentiate to survive.

Lessons from Evergreen

When asked about lessons learned from Evergreen Solar, answers included too high a requirement for capital expenditures, missed opportunities to  learn from others by deciding to do everything themselves, and government tax credits for job creation are short term drivers–but very powerful.

Advantages of different funding sources

Job creation is not a factor in the venture world.  All that matters is economic payback.

Nevertheless, government provides certainty.  Presidential directives are facts.  Agencies must execute right or wrong.

Utilities change goals year by year, and state by state.  It’s essential, therefore, to pick the right region.

Q&A

During the Question and Answer period, panelists told us that:

• Predictive modeling is important even for businesses with fixed use patterns because people’s behavior is unpredictable–except in the long term.
• Less developed countries are generally where products get a second life, rather than where innovation happens.
• The west coast VCs make quicker decisions but a good investment will sell on either coast.
• Chinese and US VCs are partnering to take advantage of deals in each others’ regions
• Because clean tech is new, the business model is still developing.  No one has exited or built relationships for the long haul.

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1. Want to develop smarter, greener cities? Maybe the key is compelling communications

Massachusetts Governor Patrick’s conference on health information technology, entitled “Improving Health Care and the Economy“, began yesterday in Worcester, MA.  Dr. Blumenthal kicked off the conference citing achievements at the federal level and congratulating Massachusetts for being the first state to attain provider targets.

A down payment on health care reform

Quoting President Obama, Dr. Blumenthal told an audience of several hundred that health information technology, while important, is just the down payment on health care reform.  More important, he said are the aspirations of change we plan to achieve as a country.

HITECH anticipates and addresses barriers to reform

In his talk, Dr. Blumenthal noted that in addition to seeking change, the law also anticipates and addresses barriers to reform including financial and market barriers to technology adoption.   These hurdles  include the current absence of incentives to improve the quality of health care, the lack of incentives to adopt technology, and concerns about what technology to adopt and how to deal with productivity losses during the transition.

During the question and answer period, Dr. Blumenthal said that the standards that were developed in 2010 lay a strong foundation for the future.  Nevertheless, we will need to do more in the next round.  He also said that HITECH didn’t cover the continuum of care because there was so much to address relative to acute care.

MA leads the way

Next up was Governor Patrick.  He announced that Massachusetts had succeeded in covering 98% of the population with just a 1% increase in state spending.  He then spoke about the importance of the health care sector to the Massachusetts economy, the prominence of Massachusetts organizations in various segments of the health care industry, and the extent to which Massachusetts institutions were leading the way in health information technology adoption.

He noted that cost remains a significant challenge–and one we must address to maintain universal coverage.  He advocated for doing so through better integration of programs and data.

Innovation Center will change the world

The next speaker, Dr. Sachin Jain, focused on the administration’s commitment to health care innovation.  He said that the stimulus money leveled the HIT playing field, the Affordable Care Act improved access to care, and that the new Medicare and Medicaid Innovation Center will change the world.  Funded with $10 billion every ten years, it’s goal is to identify new models for payment and care–and then diffuse them through the system.

The 7 doors of innovation

Dr. Jain then outlined the “7 doors of innovation.”  These include RFPs, fast track pilots to modernize Medicare and remove policies that harm patients, requests for citizen input in problem identification and priority setting, sole source contracting, prizes and challenges, fast track for ideas that are already supported by evidence, rapid testing of new models of cares.

He said that one of the goals of the Innovation Center is to find models that work.  They will test various models since “one size will not fit all”.

Dr. Jain invited the audience to submit their ideas.  In response to an audience question, he said that while priority may be given to coalitions that propose testing across multiple geographies, that doesn’t preclude smaller tests for more targeted innovations.

Through the eyes of various stakeholders

The last session, yesterday, featured a panel that addressed the impact of health information on clinicians, patients, and the economy.  In his introductory remarks, Dr. John Halamka discussed some of the challenges associated with creating a health information exchange.  Examples ranged from the difficulties of uniquely identifying patients, to mismatches in vocabulary across the care continuum, to the problems with building quality measures by consensus.

Dr. Halamka also speculated that the deadlines for meaningful use will be extended to allow more time for vendors to develop software and providers to install and test it.  He predicted, that in the meantime, there would be an intermediary step where the government would require providers to achieve more aggressive goals for the technology executed in the first stage of meaningful use.

Physician perspective

Three of the four panelists were physicians.  Dr. Alice Coombs, representing physicians, discussed the steep costs associated with technology adoption in terms of finances, time, and reputation (until we get risk-adjustment right).

Vendor perspective

Dr. Bell, representing the vendors pointed out that the current EHR systems provide basic federal compliance saying that “everything else” is yet to come.  Her talk focused on some of the shortcomings of the current systems, the implications of these gaps, and the order in which vendors were addressing them.  Examples of shortcomings include the dearth of clinical decision support, the lack of assurances that multiple providers could simultaneously access systems, the absence of guarantees that functions would work together, data portability in the event of a bankrupt vendor, and the bias toward primary care physicians (rather than specialists or the rest of the clinical team).

Hospital perspective

Lynn Nicholas, representing hospitals, also talked about some of the cost considerations–both financial and in terms of eventual job loss.  She said Massachusetts hospitals face unique financial challenges because their facilities are older and therefore their net capital falls below the national average.

Consumer perspective

Dr. Charlotte Yeh, now Chief Medical Officer at AARP, said that her current role has given her a new appreciation of the consumer perspective.  She noted that professionals and patients have very different ideas of health care quality.  Whereas the professionals look at clinical measures, patients are more concerned with the quality of their lives.

Day 2: Workshops

Today, conference attendees, had the option of attending four workshops such as the ones I attended on Payment Reform, Secondary Uses of Data, and Telemedicine.  Each of these included a 15 minute talk by an expert followed by a half hour discussion.

Payment reform

Sarah Iselin of the Blue Cross and Blue Shield Foundation described some of the thinking behind Payment Reform, how it will differ  from capitation (e.g. providers don’t take on actuarial risk, pay for adherence to quality measures, longer transition period), and the extent to which various factors drive cost.  Her talk was followed by a spirited discussion that examined payment reform from the perspective of each of the major stakeholders.

Secondary uses of data

Jo Porter, Deputy Director, NH Institute for Health Policy and Practice, provided examples of reports that New Hampshire, Vermont, and Maine have used their “all payer” databases to report.  The ensuing discussion included concerns about the privacy of patient data and a deeper dive into the relative strengths and weaknesses of data from various sources (all payer, discharge, government).

Telemedicine

Joe Kvedar, MD, Director, Center for Connected Health at Partners Healthcare described how telemedicine could help bridge the gap between supply and demand for health care providers.   He then provided compelling examples of how telemedicine had improved health care access, quality, and efficiency for various conditions.  A lot of the discussion centered on barriers to use.  One of the topics was the difficulty of motivating patients to care for their own health.

All in all, it was an informative two day session.  One of the major conclusions that I drew after hearing all the speakers is that the devil will be in the details.

Read about how BB Marketing Plus has helped clients with the detail of their health care projects.

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4. Health care IT: Lives depend on good design

One of my longtime friends, who also happens to be an expert writer and consummate marketing expert, has always been fond of saying “In America, you are what you say you are until proven otherwise.” I love that line because you can apply it to just about any facet of life, politics certainly but also your personal or business life as well. But for me, I always pull it out whenever anyone wants to talk about their value proposition and price.

Money talks

That’s because the price you set says a great deal about what you think of your value proposition. For example, when I was back in graduate school one of my professors gave us all a “price test”. It was a list of bicycles with various descriptions for the type of wheels, gears, shifters, seats, etc. that they each included. Plus, each bicycle had a list price.

Our task was very simple. Rate the various 20 or 30 bicycles on the list by quality on a scale of one to five; five being the best and one the worst.

At the next class the professor returned with our test results. As we guessed, there were no wrong or right answers.

Instead, he had run a regression analysis on the variables or descriptions of the various bicycles along with each bike’s price to determine which variable influenced our ratings the most.

Guess which variable won? Price. By a wide margin.

People often use price as a proxy for value

What none of us had realized (or at least most of us), was that the descriptions often repeated (or nearly so), and in those cases only the price changed. This fact was pretty well masked by the professor’s use of narrative descriptions that were lengthy and didn’t follow a set pattern. That is, one might start out touting it was a 10 speed (this was some time ago), while another would start by stressing its superior brakes.

In short, for a lot of the students, the list of features became a blank wall of text, so predictably we fell back on price as the best or only available gauge of quality. The list of bikes became what a lot of marketers would call a “blind item”. That is, something that the buyer typically doesn’t really know how to rate on a real quality scale, so they look to other clues that rightly or wrongly (but hopefully) give them a good measure.

Diamonds are often given as a perfect example. (I mean seriously, how many of us really can see that slight flaw, with or without the jeweler’s loupe? We just nod our head to avoid looking like we don’t get it.)

But, even “difficult to evaluate” products have a price ceiling

So what does that say about price and your value proposition? Well, if you take this concept to its ultimate conclusion, you might assume that the highest end of the market is the limit, since the higher you set your price the higher your product’s perceived value.

Alas however, we all know that it doesn’t work that way. First, there is a limit to the “blindness” of even the most difficult to evaluate products.

Value becomes evident with experience

But further, while quality may be hard to gauge up front, most products become much less so over time. That is, use has a way of showing the buyer their purchases’ true value.

So for example, while the class as a whole might have rated the most expensive bikes as the best on paper, if a number of us had actually purchased a few bikes we very well might have discovered our error and undoubtedly word of how we had been duped would get around. We also had limited time and to some degree, limited interest.

True buyers might be willing to put in a lot more time before drawing a final quality conclusion that was sealed with our hard earned cash. Hence, the second part of my good friend’s quote, “… until proven otherwise.”

Think twice before cutting price

So where does this story most often apply? I bring it up whenever I’m speaking with someone who is playing with an urge to price their product low.

Perhaps they are enamored of the freemium to premium concept. Perhaps they are hunting for ways to shorten their sales cycle for a while, or maybe they are simply looking for a way to move a few more “units.”

Price reductions can backfire

Now, there are a whole lot of reasons to look at any of those moves a bit sideways. After all, not every product fits a freemium/premium model and not all sales cycles can be forced to go any faster regardless of the price. But as my little story tells, one additional reason is that it might just say your product stinks.

Douglas McCartney is a revenue-focused sales and marketing executive with more than 15 years of senior leadership experience at start-up to mid-sized B2B software companies. You can find Doug via his LinkedIn Profile here: http://www.linkedin.com/in/dfmccartney

Have you determined the highest value your company can offer?  Download the “Do it Yourself Guide” for developing compelling value propositions.

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Shortly after I got up this morning, I strolled over to Marketing Over Coffee for a quick shot before heading off to work and found this great article, entitled How to restore the faded luster to marketing by Rich Guha.  In my opinion, it’s a “must read” for anyone looking to build a business or aiming to build a career in marketing.

It’s about the big picture

Referencing management heroes such as Peter Drucker and Ted Leavitt, the article discusses what companies have lost as marketing becomes more specialized. Guha advises marketers that wish to add significant value to the business to:

• Step back from tactics and understand the “theory of the business.”
• Understand what are the ways to measure performance which drive market value.
• Understand which levers in the business will increase market value.
• Regard tactics as components that can only be used with an understanding of the entire business plan.
• Understand the customer and end user intimately.
• Focus on Product, how it is priced, presented, and where it is available to customers.

It takes intimacy and integration to hit the mark

In short, he emphasizes the importance to successful businesses of a) understanding customers’ needs across the spectrum (yes, back to the 6 Ps*) and b) understanding which levers in the business will increase market value.  Without these important capabilities, front and center, companies often end up missing the mark and spending way too much on “marketing”.

Guha quotes Drucker as saying, “If Marketing were to do its job perfectly, Sales would not be needed.”  In other words, if you really understand all aspects of a prospects’ needs , products would sell themselves.

This is not the same as “build it and they will come”.  The needs to which Guha and Drucker are referring, go way beyond the product features and benefits.

Upfront investments in market intelligence save money

Nevertheless, Marketing can’t do the job perfectly.  That would require mind reading.   Still, an upfront investment in marketing research can save a lot of money down the road–if either the product, or its promotion and distribution, will cost a lot to accomplish.

There  are many ways to gather prospect  information from surveys to customer shadowing to watching click streams.  The key is knowing what you’re looking for, and how to use the information you get.

Else, you’re likely to miss the market window.  Or, if you’re “lucky” spend a lot of money on  rework until you get it right.

Start with deep customer insights

Therefore, a lot of companies are investing in developing buyer and user personae before making the much larger investments in product development and content. They capture the “voice of the customer” and then create archetypes for the three to five most important roles at the companies in their target market.

To bring these archetypes to life, many companies give them names.  These examples help multidisciplinary teams discuss and figure out “What Jane would do” or how “Mike would like to receive information”.

Test, iterate, refine

The most successful companies do this in an iterative fashion.  They gather information, form hypotheses, test their hypotheses, and then refine their hypotheses until they hit the measures they’ve set as goals.

Use high-fidelity prototypes

In the development world, see Eric Ries and Cindy Alvarez’ work on lean start-ups (although there is broad applicability for other product development groups).  In the usability world, see Jared Spool’s and Carolyn Snyder’s work on high-fidelity prototyping.

Watch customer behavior

As for communications, hypothesis testing is now the province of analysts that study click streams.  There, however, companies are still working out the timing .

Since digital communications are relatively inexpensive to produce and deliver,  many companies delay testing until after they launch.  It’s too early to have definitive data on how early missteps affect branding, or the extent to which upfront research could have prevented extensive rework.

Marketing never stops, always changes

Nevertheless, it’s not a perfect world.  You can’t anticipate all customer needs upfront.

Things are always in flux.  Economic conditions improve. Regulators introduce new rules.

Technology innovations make the improbable possible. Competitors’ actions cause priorities to shift.  For these reasons and others, it’s essential to gather information on an ongoing basis.

Assess which actions will have the greatest impact

As mentioned above, however, it’s equally important to know how to use the information you gather–or as Guha notes know which levers will increase business value.  This is especially important in a tight economy where companies can only afford to take the most effective actions.

Too often, companies focus too much on one of the “P’s”, to the detriment of the overall marketing effort.  Engineering firms will sometimes focus all their efforts on fine tuning the product, while “marketing organizations” expend too much on a particular type of promotion, relative to the return they’ll get on that investment.

Embrace diversity

This is where true marketers, who work with multidisciplinary teams, add their greatest value.  By understanding the whole customer, his/her environment, and impending change, he/she can help the company optimize the resources it takes to unite customer and solution.

Wondering where to start?  Test your preparedness by drawing on your market knowledge to create a compelling value proposition.  Or, learn more about the value creation process, first.

*Product, positioning, packaging, pricing, promotion, placement (sales channels or distribution)

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