Alternative Media: Time to Change the Channel

November 1, 2006

Pharmaceutical Executive

Volume 0, Issue 0

Hospitals don't want straight-up advertising. If a branded program is going to be integrated into a health-education or health-services platform that's offered directly to a patient's room, it needs to have objective value.

More often than not, hospital rooms are outfitted with a simple television, tethered to a bed that provides poor audio and a basic remote control. But, under increased pressure to improve patient satisfaction, hospitals are now looking at new ways to boost patient morale. One way they are doing this is by providing some comforts of home, such as on-demand television and Internet access.

This upgraded technology, still in its infancy at the hospital level, offers a host of potential opportunities for pharma companies to market their products through health-education videos and branded "info-tainment." Pharm Exec spoke with Dave Schofield, president and CEO of broadband connectivity provider Skylight Healthcare Systems, about how improved technologies in hospital rooms can provide pharma marketers with a new method of reaching a captive audience.

Beyond Television Dave Schofield, Skylight Healthcare Systems

Pharm Exec: Why are hospitals incentivized to upgrade their systems?

Schofield: The general population expects it. A guest can go into any hotel today, and if it doesn't have high-speed Internet, if it doesn't have cable TV programming, if it doesn't have movies on demand—the hotel can't be competitive. Many people are accustomed to high-end communication services at home and at the office. So, it's natural to provide that experience in the hospital space.

Hospitals need to do this for competitive reasons and to improve their patient-satisfaction or SAT scores. With HCAHPS [Hospital Consumer Assessment of Healthcare Providers and Systems] coming, the visibility of SAT scores—a ranking of hospitals locally and regionally—they're doing whatever they can. Keep in mind: A lot of hospital executives are bonused on patient-satisfaction scores.

How prevalent is broadband access in hospitals right now?

Most established hospitals today do not have high-speed Internet access in patient rooms. However, more and more hospitals are including broadband in their plans as they expand or upgrade wings, or build new towers. Probably less than 10 percent of the hospitals out there have wired their patient rooms for broadband.

How many hospitals currently offer health education this way?

Our market niche is new. There's probably less than 150 of our type of systems installed in the whole industry, and we have about 35 to 40 in that range. We'll probably double that in 2007. I think interactive communication in the patient room will grow 100 percent every single year for the next three to five years. So within five years, our system, or one of our competitors', will become a new standard within hospitals.

Are hospitals required to offer some level of health education?

JCAHO [Joint Commission on Accreditation of Healthcare Organizations] requires hospitals to deliver to the patient, during their hospital stay, a certain amount of health education based on their respective disease state. Our system can send customized and automated health education right to the patient, based on their disease state.

For example, if a patient is diabetic, the nurse education team can say, "Listen, at the end of 24 hours we want you to send that diabetic patient video number one. At the end of 48 hours, video number two. At the end of 72 hours, video number three." The nurses can do this in a way that is completely automated, so they don't have to wheel in a VCR on a cart. It's not a pre-timed, pre-scheduled loop; it's completely on demand. Or, the patients can access it on their own. They can go into our system, click on "health education," navigate to the diabetes section, and watch a video on the disease.

How has hospital receptivity to pharma programming changed?

Five years ago, hospitals would have nothing to do with pharmaceutical advertising in the patient room. They thought it would be too skewed with pushing a certain drug over another. It was kind of taboo. Today, that is starting to change. Hospitals' margins are being squeezed. Payer mixes are changing. Reimbursement percentages are declining. They're always pressured on their financial performance and margins. I think a hospital may be more likely today to say to the patient, "Merck is going to sponsor some health education for you and recommend some of its products." In return, Merck would give the hospital "X" to get to that dedicated audience. Hospital executives are much more receptive to that idea today, just due to their financial pressures. It allows a company to sponsor or partner with various hospitals to educate patients about a disease and have direct interaction with their core audience right at that "moment of truth."

How can this help brand teams with gathering information about patients?

On the market-research side, pharma companies can get a lot of information from patients via real-time surveys.

Pharma companies could draft a standard five-, eight-, or 10-question survey about a respective disease state that they want to gather more information on, and distribute it electronically to the patients during their hospital stay. If there's a negative response to any of the survey questions, a service alert would be sent to the company. These surveys would give pharma the ability to gather real-time patient feedback on whatever they want to gather feedback on.

What types of content should pharma companies distribute through this kind of service?

Straight-up ads, no. That is not the approach. Companies should create materials that work on a health-education platform. For example, you have a health-education video, a five-minute video on diabetes. It's branded by Merck, it's branded by Johnson & Johnson. At the end of the video, the sponsor company could feature a series of products that it offers to help fight the disease.

What hospitals want is a general-education video about various disease states and then, maybe at the end, sponsored information on what drugs the patient should consider. Hospitals want health services that come across as truly being in the best interest of the patient.

GE used to have this free health-education platform that it would give to hospitals, but it included a lot of advertisements from pharmaceutical companies and was not well-received because hospitals don't want advertising. If a program is going to be integrated into a health-education or health-services platform, it needs to have objective value to the patients.

Is it ethical for pharma companies to market to patients in hospital rooms?

Hospitals want the best drugs provided to their patients, and the patient needs to have a choice. Whether hospitals are going to be receptive to the idea of pharma companies having a hand in what kinds of education patients are receiving while on hospital grounds remains to be seen. I don't know the answer to that. I think it's a pretty gray area today.

For pharmaceutical marketers, this would be a new model that would require pharma companies to sit down with the hospitals to really determine where the value is. Both parties need to ask: Where can we provide the most value in regards to patients' health education, exposing the right product, and bringing value to the marketers?