Five Keys to Better Hospital Marketing
Hospitals today are under fire like never before. Pressures from increased awareness of medical-safety issues; growing dissatisfaction with emergency room care; higher and higher costs; longer wait times; and growing consumer demand for comparative information on quality of care and costs, are just a few of the issues that have combined to create a crisis of confidence in healthcare providers by patients and their families. When these issues are weighed against the growing economic pressures created by increasing competition from more focused providers that may offer superior value through lower prices, higher quality, and better service, we believe that hospitals must change their marketing practices drastically or face the possibility of being relegated to second-class status as a healthcare provider.
Today, stand-alone ambulatory service centers, diagnostic imaging centers, endoscopy suites, and specialty clinics are just a few of the powerful competitors hospital marketers face. And we can certainly expect this trend to continue as the equity markets (public and private) and physicians themselves pour capital into this sector.
As payers and consumers become more value-conscious, the pressure to offer lower costs while maintaining, or even increasing, the level and quality of service will become much more important to hospitals. While health savings accounts (HSA’s) are still small today, increasing numbers of large employers are shifting their benefit programs to force their employees to take on more responsibility for managing their own healthcare. Experts expect this trend to grow exponentially over the next decade. This por tends a more knowledgeable and value-conscious consumer who will seek care from the best alternative, not the most convenient.
What can hospitals and hospital marketers do to take advantage of this new era in healthcare?
Focus On Specific Service Lines
The first thing hospital marketers must do is to recognize that most hospitals cannot provide all services at the same level of competence. As consumers demand and receive more readily available access to comparative information on the quality of services and care, many hospitals will be better served by focusing on their strength in specific clinical service lines. We think this will be especially true in complex areas like oncology, cardiology and neuroscience.
Some hospitals are already moving in this direction by adopting a “center of excellence” approach, but not all are moving as swiftly as they should. A recent McKinsey & Company report noted “Hospitals that resist organizing around a narrower set of clinical services will probably enter a downward performance spiral as they experience greater difficulty recruiting top physicians, paying for the best specialty-service and equipment providers, exploiting economies of scale, and implementing best practices consistently”.
Know More About Patients Than Their Name
Hospital marketers must do a better job of understanding the characteristics of the customers they serve, and attract those people by creating value propositions that are most appealing to them. Many hospitals have a wealth of database information that is not mined for its potential to understand more about their customers than their name and their healthcare payer. Hospital marketers need to tap into this resource to develop a detailed demographic profile of their primary customers. Basic statistics like sex, age and geographic location can generate a more robust demographic segmentation model to guide the use of external communication vehicles. Other marketing tools like usage and attitude studies and post-service satisfaction surveys can also provide insight into attitudes and behaviors toward technology and the emerging environment of social computing which may yield new communication channels and messaging platforms.
As we have noted, many patients are becoming more value conscious, and hospitals should be looking for new ways to develop efficient methods of estimating and quoting prices before delivering services. Customers are demanding this in other service categories, and it is just a matter of time before they begin asking these kinds of questions of their healthcare provider. If you aren’t prepared to give them the answers they want, you risk driving those customers to someone who will.
Hospitals don’t need to emulate “used-car marketing” practices, but a greater ability to extend credit and provide alternative financing options could be a key component of future growth with the value-conscious patient. This may also create a need for hospital marketers to develop better collection practices to avoid increased financial pressure from customers who default on their financial obligations.
Exceptional Service Can Pay Big Dividends
Not all growth potential will come from the value-driven patient population. Just as premiere retail marketers like Nordstrom have depended on exceptional service for growth and improved profitability, there is also a group of patients who are willing to pay more for improved services. Time has become an increasingly important commodity, and busy executives will appreciate, and pay for, services like faster, more efficient check-in. Those same executives that are willing to pay for on-call physician services, can also be incented to pay more for private rooms with wireless internet access, catered meals, more attentive nursing, etc.
The increasing competitive environment will dictate that many hospitals will no longer be able to be all things to all people. They will need to determine who their primary customers are, and begin to emulate the marketing practices of other competitive service industries by identifying, understanding, and then focusing their marketing efforts to attract those patients.
Web Marketing Will Become More Important
As the Internet continues to become more of an integral part of our everyday life, the role of web marketing will become even more critical to effective hospital marketing in the future. A recent Forrester study reports that only 39% of site visitors say that they are satisfied with the usefulness of current hospital sites. While many hospitals are revising their sites to be more reflective of their brand image, most still lag far behind in providing site visitors the ability to accomplish a specific goal. Hospital marketers need to enhance their site’s usability by increasing the ease of navigation and ability to accomplish online interactions like pre-registration, procedure scheduling, bill payment, and other desired tasks. This can dramatically improve administrative costs and productivity, while building a stronger bond with potential patients.
Technology tools like search, e-mail, instant messaging, blogs, podcasting, social networking, and personalized content delivery have already converged in other categories. We can expect to see these same technology tools empower healthcare patients and families like never before.
We are already seeing the web impact the professional side of healthcare. Health specific search engines deliver medical resource results; health care blogs and streaming video allow physicians to collaborate across geographical boundaries; RSS feeds keep physicians up-to-speed on the latest relevant medical news. Forecasters predict that the growth of secure messaging and online portals will allow a new dimension to the patient-doctor relationship that will include virtual patient diagnosis, image reviews, patient billing transcription and coding, and direct patient care interactions using a dedicated 24/7 professional staff distributed worldwide.
Hospital marketers who embrace these new tools will find a welcome audience who will appreciate their usefulness and reward them with their loyalty.
Collaboration Will Influence The Future
The growing importance of physicians in both operational and resource allocation will require a much stronger cultural and economic alignment between the two parties. Hospital marketers will need to rely more and more on clinical specialists to differentiate their service lines and this may also require hospital management to explore creative employment and even revenue-sharing programs to attract and keep them. An outgrowth of this may be that the reputation of the associated physician becomes a key element of external communications.
Lastly, aligning with a strong marketing communications partner that can help them succeed in this dramatically changing environment will be an important element in the future marketing mix. Hospital marketers will need to understand and emulate best practices from other competitive service industries if they are going to be able to sustain their growth and competitive position in the healthcare marketplace.
Hospital marketers face many challenges in the near future, and while they may seem daunting, they are not impossible to overcome. As it is in all business categories, the future belongs to those who understand that changing dynamics require changing attitudes, strategies and tactics. But that’s the way it has always been, isn’t it?
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