• by Ted Smith , April 16, 2010

There are few times when an industry is transformed overnight by something everyone saw coming for a long time. We are at that moment right now. Pharma marketing to consumers is a decade-old idea that is steeped in traditions borrowed from more mature industries such as consumer packaged goods (CPG).

It has been textbook stuff other than the occasional distractions posed by search marketing and now social media. Social media is the train we didn't see coming so it is rewarded with an extra dollop of hype for every layer of material truth. Most of the folks I meet with in my day job are very concerned about social media and many are frustrated by how their agency and marketing counterparts in CPG are better able to take advantage of the revolution while pharma is sidelined by regulatory ambiguity.

Like the magician who counts on your distraction, I would like you to consider that the marketing model in health is not CPG but is really financial services.

Take the Challenge

Here is the test and you tell me whether I am talking about managing your finances or your health:

1) I've been told by a professional that if I don't take simple actions now, there will be big problems for me down the road.

2) There is a government program that will help me later in life, I just need to stay employed for another ten years and I don't have anything to worry about.

3) This stuff is very complex; I can get so many different opinions from experts about what course of action I should take in my situation.

4) I should not be taxed on these specific benefits that my employer provides for me because it is better for society if I do these things with my earnings.

5) There is a company that has a record about me and when that information is wrong, it can make my life difficult, unless I petition to fix the errors.

Like it or not, the health industry and the financial services industry manifest themselves very similarly in our lives. Your health insurance company has a detailed medical record that is as important as your credit bureau record, but there is a difference -- the Fair Credit Reporting Act (FCRA) which gives every U.S. Consumer access to their credit history.

Long before consumers had these rights, marketers found ways of using these data to more efficiently segment and target customers. Anyone who has done a tour of duty in financial services marketing knows that the tonnage is hauled by database marketing to extremely tight segments that other industries have always had to approximate through zip code, partial point of sale data, etc. Having your complete credit history coupled with detailed information about spending habits significantly reduces the marketing waste.

It is Coming

It was February 2009 that Congress passed the final American Recovery and Reinvestment Act which made Health Information Technology a mandate for healthcare providers complete with commensurate rewards (grants to subsidize health record implementation) and punishments (reductions in Medicare reimbursements beginning in 2015). So, Electronic Health Records (EHR's) or Electronic Medical Records (EMR's) are coming quickly to a hospital or doctors office near you. Judging by the record growth in services by the systems integrators who sell these to hospitals, the train is actually coming.

Like your credit score and credit card transaction data, your electronic health data is being discussed quietly in the corridors of many different factions. While we all know that between Health Insurance Portability and Accountability Act (HIPAA) and discussions underway at the FTC about behavioral targeting, health will have more significant privacy, disclosure and permission constraints.

That said, I have seen three examples of programs that seek to use these records for market segmentation, clinical trials recruiting, and, yes, specific product marketing messages to be sent to hyper-niche populations. In one case, the company was offering to subsidize the implementation of EHR's in a physician's office in exchange for a revenue share of fees charged to access a dataset of non-personally identifiable records in order to extrapolate targeted audience segments and inform marketing strategies.

Again, there is greater regulatory interest in the privacy issues surrounding these records but you read it here first that, with that much data accumulating, there will be a new force to become acquainted with and perhaps master in this industry.

... and you thought the credit card offers were annoying.