Rome Is Burning: CMOs in Healthcare
A wake-up call on the future of the CMO role at healthcare organizations
In June, I reached out to my healthcare provider to schedule my colonoscopy screening. After tapping on her keyboard for a few seconds, the scheduler sighed and asked if she could put me on hold. When she returned a few minutes later, she explained the problem: the soonest she could get me in was January, seven months later, but because that was so far out, her scheduling software wouldn’t allow her to actually book the appointment. I would have to call back in July and try again. I knew many systems were struggling with capacity for specialty care, but a seven-month wait for a standard screening?
While a simple anecdote, it helps set up the emergence of a new and potentially ominous environment that threatens the very existence of the health system Chief Marketing Officer role. So, is Rome really burning? And if so, how do you put away your fiddle and take action?
Two is a coincidence. Three is a trend.
After I shared the story above with a long-time client, a health system CMO, and hearing his take on the situation, it all clicked. It was obvious something new was going on. As I mapped out the larger dynamics at play, it hit me – the health system CMO role is under threat in a way I had never experienced in my 20+ years in this field. Here were the three dynamics that, together, led to this realization:
- The Pixel Purge – In December 2022, the Office of Civil Rights (OCR) of the Health & Human Services department of the federal government, issued a bulletin warning that the use of tracking pixels from platforms such as Google or Meta may be used in a way that constitutes a HIPAA violation. Subsequently, a number of health systems have been sued because of this alleged violation. Much has been written about this issue, so no need to unpack it here. It’s the response from many health systems to this threat that is relevant for this discussion. Rather than try and navigate this issue, a number of systems made the decision to simply pull all tracking pixels from their websites. The calculation was made that it wasn’t worth the risk of an HHS lawsuit. In those cases, that means organizational leaders either didn’t know the value of tracking web traffic, or did know the value, but still didn’t think it was worth the risk to keep. Neither of those options bodes well for the valuing of marketing in a health system.
- The Seven-Month Colonoscopy – The story I shared above is not unique, of course. Patients across the country face challenges in receiving the care they need, as health systems experience limited capacity in both outpatient and inpatient services. This results in longer wait times to schedule appointments, closed units, and more. This isn’t just happening in specialty care areas, where it’s always been a challenge to see specialists at the most prestigious institutions. It’s impacting everything from primary care to diagnostic care to straightforward preventative medicine. The main driver of this issue is the ongoing labor shortages systems have been battling for years, which were exacerbated by the Covid-19 pandemic. There’s no reason to believe this will improve anytime soon. In October, more than 75,000 healthcare professionals led the largest healthcare strike in history at Kaiser Permanente. A recent headline in Modern Healthcare that shares a study, also released in October, by Definitive Healthcare screams “Healthcare professionals fleeing industry, new data shows.”
Now, combine that with the “pig through the snake” – the Baby Boomer generation moving full steam into old age and greater healthcare utilization. With all Boomers becoming eligible for Medicare by 2030, the healthcare system in the U.S. is already beginning to burst here and there at the seams.
In other words, at the same time health systems are facing a historical restriction of supply, they are facing a historical expansion of demand. So, the question becomes, if we can’t handle the patients who are coming to us now and in the coming years, why would we invest money in marketing to attract more?
- The Receipts – All of this might sound speculative if it weren’t already resulting in worrying effects. In 2023, at least five large health systems eliminated the CMO position, and in some cases, most of the rest of the marketing leadership positions as well. These aren’t run-of-the-mill organizations, but among the most well-known and well-respected brands in the industry. These are just five that I personally know of – there certainly could be more. But even at five, that represents a trend I have not seen in the 20+ years I’ve spent in health system marketing. To be clear, in each of these five cases, the systems were facing dire financial situations. Having cut to the bone in all ways possible, they made the decision to cut into the bone by eliminating a c-suite position. (In addition to the elimination of these CMO roles, many systems are facing dramatic marketing budget cuts as a result of ongoing financial issues as well.)
It’s possible that Covid-19 is the sole culprit in these moves. Not only did the pandemic lead to the worst financial year in the history of hospitals in 2022 (with 2023 not much better), it also shifted the focus for organizations nearly 100% to communications. In 2020, systems stopped marketing, both because of shuttered services, but also because of the massive need for community communications around public health practices such as masking, social distancing, and, later, vaccination. Leaders saw that communications was an essential function, which is why in many of the cases of the CMO elimination, any remaining marketing function was shifted to the Chief Communications Officer who survived in each situation. Will there be more moves of this nature? It’s unclear. But as long as systems continue to struggle financially, don’t understand or value marketing, and face extreme supply vs. demand disparities, it wouldn’t be a surprise.
Put down the fiddle
Combined, these three dynamics paint a worrisome picture for the health system marketing field, as the more significant underlying issues (e.g. labor shortages, demographic change), lie outside of the marketer’s control. So what can you do to protect yourself and your team, let alone continue to build the perception of marketing’s value within the organization?
Stop – Stop doing what you’ve always been doing and reassess: what is required in this new environment to demonstrate the value of marketing? What are your priorities? What are you doing now that could lead to issues down the road? One example – move past the “perfect world syndrome.” Many marketers delay strategic marketing initiatives waiting for the exact right moment to engage. “We have to wait until X is done, which requires Y, before we can even start Z.” Often “X” and “Y” are organizational initiatives you can’t control, such as strategic planning or leadership changes. But if you wait for the perfect window to deliver “Z” – a new brand platform, enhanced data-marketing capabilities, investing in AI – you may never get the chance.
Look – Identify any and all opportunities to measure the impact of your value and to communicate that value at every turn. And of course, wherever possible, tie that value back to the financial success of your system. Nothing new here – the second book I wrote was called “A marketer’s guide to measuring results,” and it was published in 2009. While the means and approaches have changed since then, the critical need to demonstrate meaningful value to your organization has not. Key areas of focus today include supporting recruitment efforts (through strategic initiatives such as employer branding), payor/provider strategies, establishing a strategic role in any M/A activity, and driving patient-acquisition using data-driven marketing (while demand might outstrip supply, you are still likely competing for the right patients in terms of payor-mix, margin, and life-time value. The best way to find and attain those patients is with data-driven, CRM-supported precision marketing).
Listen – Keep your ears open for any warning signs of extreme financial measures. If your organization has experienced layoffs, are there more rounds coming? Are bond covenants threatened? Has an outside consultant been retained to seek “efficiencies”? (or more likely, has another consultant been retained?) Are you losing access to leadership in small, subtle ways? If you experience these signs, the writing may be on the wall. But if so, there should be nothing left to lose in your efforts to demonstrate the importance of marketing to turning the financial ship around.
Live – These may be the most difficult times experienced by health systems…ever. Record financial woes. Labor strife. New disruptors around every corner. The value attack, with systems being painted as the primary cause of increasing healthcare costs in the U.S. These are the times that try men and women’s souls. But you have value – to your organization, to your team, to those you serve in the community. Take the challenge and rise to the occasion. While it may be difficult, it’s not boring, and you have the real chance to drive meaningful change. Make the most of it.