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News & Insights


Now that we’ve determined in our first two blog posts that consumers are both Copernican and Constricted, we turn our attention to a common household item – The Funnel. In this case, not a funnel for cooking, or adding oil to your lawnmower, or for making beer in your garage. The Funnel that determines how consumers move through the healthcare system from urgent care, retail care, virtual care, or primary care to more advanced treatments or interventions. The top of the funnel is critical because it controls, or at least influences, who gets what care and where at every other point down the funnel on the way to tertiary or quaternary care.

We only need to look at the Wall Street valuations for companies like Oak Street, One Medical, or even Optum to see the level of investor interest in the organizations that control the top of the funnel. Amazon, CVS Health, Walmart, Walgreens and dozens of others are all focused at this sector of healthcare.

Here is the way Joe Public 2030 introduces The Funnel Wars: “Today we tend to consider hospitals and health systems as birds of the same feather in terms of business model, with variances based on size, scope of services, for-profit/non-profit, and other factors. Moving forward, we could see the splitting of the health system model, with some systems moving even further to the larger, more comprehensive “health” organizations, others retracting into solely acute-care destinations – the “giant ICU on a hill” – and others somewhere in the middle. These models may emerge based on core geographic/market differences such as presence of competitors, plan consolidation/ power, regulation, and dozens of other market forces. Yet the primary area where this transformation would play out is with health, wellness, and the lower-acuity care points – what we’re calling The Funnel Wars.”

Perhaps we should first consider whether The Funnel Wars are really a “war.” The metaphor suggests two sides equally armed, committed to their positions and battling for position and leverage. Yet, many hospitals and health systems are not yet fully armed for this battle, or even sure if they want to have an army, while big tech companies, big retailers, big payors, and many new market entrants have deployed their forces on the land, sea, and air.

The clearest example of the payor side of The Funnel Wars is Optum, a wholly owned subsidiary of UnitedHealth Group, that generated $3.4 billion in profit in Q4 of 2021 alone – up 10% from the quarter prior. UnitedHealth networks insures 48 million people, but Optum provided care to more than 100 million people last year alone. In fact, revenue per consumer increased 33% in 2021, and Optum Care now employs over 60,000 physicians, and runs nearly 1,500 “neighborhood clinics” in the U.S.. Here’s a fun stat – when Optum completes the first wave of its expansion strategy addressing the 75 largest MSAs in the country, it will be able to affect $550 billion healthcare spending in those markets alone. If your reaction is “holy cow,” then you are fully grasping the enormity of the situation.

The other thing we must consider is the difference in motivation between payors and hospitals and who decide to compete at the top-of-the-funnel. Hospitals invest in top of the funnel services to improve access in their communities, to ensure consumers get the care they need at the best possible place with the best possible doctors — even if that care is sometimes expensive. Payors invest in top of the funnel services, and even services a little bit down the funnel like outpatient surgery, to steer patients away from hospitals and more expensive care. In fact, giving so much control to payors and some new market entrants ensures that those organizations benefit while hospitals suffer. Further, patients labor under the impression they have choice when in fact their top-of-the-funnel selection may determine almost everything else about the care they receive and the options available to them.

Hospital marketers play a pivotal role in The Funnel Wars. Research we commission can demonstrate the consumer’s need and preference for top-of-the-funnel services. We can work hand-in-glove with C-suite leaders making investment decisions regarding clinics, physician practices, and other top-of-the-funnel services. Our brands can help communicate that we care for people at every level of the funnel, not just the acute care they associate with hospitals. Our marketing and PR can explain how selecting Optum or some new market entrants will limit downstream choices. And we can take new, innovative approaches to marketing that doesn’t look, feel, and sound like the same old, same old – but rather marketing that competes for mindshare and trust with the top consumer brands in the world.

When it comes to The Funnel Wars, and the battle with payors in particular, these steps aren’t optional. They’re required.

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