You’re sitting on a time bomb, so think harder and give more!

I’m going to upset you.

I’ve something I want to say to you. It might wind you up a bit so if you do not agree with me, I’ll understand. You see, I think as 2022 passed into 2023 something way more profound than just the year changed: I think we’ve moved from an era when you could expect to receive more for giving less of yourself to one in which we’re all going to have to give more of ourselves and expect less back in return. It’s the only way the global economy can ultimately right itself.

To be blunt, in the healthcare business, which we’re in (although I cannot imagine an aspect of life or business this does not apply to) we’re going to have to achieve more for less money.

How have I reached this conclusion? Apparently, on the 15th November 2022, the world population reached 8 billion (according to the United Nations Department of Economic and Social Affairs). However, the resources we’re all drawing on (oil, gas, crops, trees, air, water) did not increase proportionately. In fact, they’ve probably decreased. So, given we have yet to properly focus our attention on discovering other planets with additional resources, we’re faced with the reality of now needing to achieve more with less.

Some sobering facts from the World Health Organisation for you to ponder:

• The number of people aged 60 years or older will rise from 900 million to 2 billion between 2015 and 2050 (moving from 12% to 22% of the total global population)
• Currently, half of the global population lacks access to essential health services and 100 million people are being pushed into extreme poverty because of health expenses
• In real terms, global health spending grows by almost 4% a year while the global economy grows by only 2-3% a year
• The UN’s International Resources Panel has projected that resource use per person in 2050 will be 71% higher than today
• More than 800 million people currently do not get enough food to meet their nutritional needs every day. Meanwhile, 650 million are obese

Most people do not think that this is their problem. But it is.

Like headless chickens, most of us are still running around trying to grab a bit more of the pie for ourselves while ignoring the fact that a few sharper – and somewhat smarter -individuals have paused for thought.

I can’t read minds, but I do know what these brighter people are thinking about and what they’ll do as a consequence of their ponderings – they’ll dig deep, be innovative and offer more value for either the same amount of money or for a little less. And they’ll steal away a large chunk of whatever specific part of the market you’re working or trading in.

It will impact all of us whether we’re institutional managers, carers, healthcare professionals and practitioners, commissioners, manufacturers of medicine or devices or, like us, purveyors of medical education and disease awareness communication. It is what happens to the market when times get tight – someone innovates and things move on.

Innovation is, by definition, the introduction of new value

The price of everything is under pressure. Constant inflation is not an option unless we’re planning to follow the economic models of Venezuela or Sudan, 1180% and 340% respectively. Gross profits will be continually reduced, as people adjust prices, until you find yourself in a commoditised market. That is, unless you innovate.

The irony is that the pharmaceutical, biotech and medical sector still has a great deal of innovation banked. The suspicion has to be that if more institutional managers, carers, healthcare professionals and practitioners and commissioners had a greater propensity to look for greater value, rather than reduced costs alone, then we would have a more efficient healthcare system (whatever geographical location you’re in).

However, innovation requires us to think harder. It requires us to eke out more value without changing our cost-base. It also requires the purchaser to recognise the increased value.

So, perhaps in reality it requires the manufacturers of medicine and devices to do a better job of communicating the additional value they can bring. Better medical education, better disease awareness and better market access materials.

We’ve all made this mistake 

We recently bought a kettle. We’d reviewed the options and studied their star ratings and features. We decided to not go for the highest performing kettle with its superb energy rating. We went for the one that was ‘great value for money’, but not quite as quiet or efficient as the higher rated models. We saved money.

Only we didn’t. We didn’t because in the long run, it turns out the one we bought gobbles electricity (you can see the meter numbers rise), it is incredibly noisy (distractingly so) and it takes forever to boil (wasting a tonne of time if you’re making tea). So, now we’ve bought the more expensive brand. In the end, our cost saving decision has cost us more than we would have spent if we had gone for slightly more expensive model in the first place.

The moral of the story is to stop and think a little harder about what is good value. The manufacturer of the kettle we eventually bought had done this already. We as kettle purchasers should have thought more deeply about the comparative performance of kettles on offer. As an agency person, interested in high performing communications, I have blamed their poor marketing material of course. There are a lot of them but none that quite make the point about the energy efficiency as well as I feel they should.

Getting more value for less

I said I had something I wanted to say to you and that it might wind you up a bit: I think we’ve moved from an era when you could expect to receive more for giving less of yourself to one in which we’re all going to have to give more of ourselves and expect less back in return.

In reality, I think smart people will start to gravitate towards those willing to address this equation. I think they will start to be more discerning and filter out those that still expect to receive more whilst giving less of themselves.

It means now is the time to start thinking about how we’re each going to ensure we bring more value to the table than we take.

Equally, those buying our services are going to have to find a way to recognise the difference between saving money and gaining more value. Better to do something effectively than not quite reach the required campaign boiling point, I think. Better to do less really well than to do more poorly.

Do you agree?

By Stephen Page, Page & Page and Partners