chapter5.pdf | essaymoose

1 2 4

L e a r n i n g O b j e c t i v e s

After you have studied this chapter, you should be able to

➤➤ apply basic principles of marketing to healthcare products and services;

➤➤ identify social, environmental, and fiscal factors affecting healthcare marketing;

➤➤ assess current market trends in the healthcare marketplace;

➤➤ evaluate criteria for implementing marketing strategies;

➤➤ describe the theories foundational to marketing; and

➤➤ provide examples of how marketing theory is applied in health management.

Look before, or you’ll find yourself behind.

—Benjamin Franklin

C H A P T E R 5

H E A LT H C A R E M A R K E T I N G

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Harrison, Jeffrey P.. Essentials of Strategic Planning in Healthcare, Third Edition, Health Administration Press, 2020. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/apus/detail.action?docID=6349384.Created from apus on 2022-04-05 03:52:09.

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

C h a p t e r 5 : H e a l t h c a r e M a r k e t i n g 1 2 5

In t r o d u c t I o nA healthcare strategic plan needs to include marketing. In the past, the healthcare model was based on the assumption that patients would come to a provider when they had a health problem, and word of mouth was the only marketing that healthcare providers needed. Current competition for healthcare services and consolidation in the industry has created the need for a more integrated marketing program. This chapter will introduce the idea of strategic healthcare marketing. The concept will incorporate the ongoing growth of nontraditional companies such as insurance companies, CVS and other pharmacy chains, and online retailers like Amazon. All these companies are attempting to drive consumers to their services. And there is no shortage of healthcare business. Under current law, national health spending is projected to grow at an average rate of 5.5 percent per year between 2018 and 2027 and to reach nearly $6.0 trillion by 2027. Because annual healthcare spending is predicted to grow faster than GDP over the 2018–2027 period, healthcare’s share of GDP is expected to rise from 17.7 percent in 2018 to 19.4 percent by 2027 (CMS 2018).

The United States continues to spend more than any other country does on health-care per person, even though US health outcomes and quality of care are seldom ranked the highest. From a marketing perspective, the increase in healthcare spending creates sig-nificant opportunities for organizations that want to gain a share of the growing business opportunity. The organizations with the greatest marketing ability can anticipate taking away market share from their local competitors. Conversely, organizations without an effective marketing plan can anticipate a loss of market share and risk becoming a candi-date for acquisition. The less-than-optimal quality of healthcare and its outcomes in the United States highlights the importance of pursuing excellent quality and safety outcomes as a marketing differentiator.

No one working in the field today can deny that the business of healthcare has become part of a growing e-health landscape. Patients and other consumers, clinicians, and healthcare organizations have embraced emerging forms of digital technology (e.g., the

➤➤ Community health needs

assessment

➤➤ Digital marketing media

➤➤ Direct-to-consumer marketing

➤➤ Indirect marketing

➤➤ Marketing plan

➤➤ Medical tourism

➤➤ Print media

➤➤ Six Ps of strategic healthcare

marketing

➤➤ Social marketing

➤➤ Social media

K e y t e r m s a n d c o n c e p t s

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

E s s e n t i a l s o f S t r a t e g i c P l a n n i n g i n H e a l t h c a r e1 2 6

internet, social media, mobile health applications) that can influence healthcare informa-tion, including its consumption and delivery. Weber Shandwick and KRC Research (2018) reported that 81 percent of Americans search for health information at least once a year. The proliferation of smartphones makes digital resources even more accessible. It makes sense, then, that healthcare organizations would spend money for online presence. Research by a technology firm predicted that healthcare companies would spend $1 billion in the next five years for online information and search engines to reach consumers (Weaver 2019).

Many believe that the provision of healthcare services occurs locally and requires a marketing strategy specific to the local community. While a local focus is important, the current growth in regional healthcare systems suggests that marketing needs to expand to a region or even nationally. Having a consistent brand in the market has served larger health systems well. This chapter introduces the key concepts of strategic healthcare marketing and proposes ways to implement these ideas across the spectrum of healthcare services. Effective healthcare marketing can be accomplished through strategic planning—marketers can creatively highlight the organization’s improved service and aim their marketing at the local, regional, national, and even international community.

From a management perspective, excellent strategic marketing provides a path to profitability and can lead to a greater market share. Its design should involve the board of directors, healthcare leaders, physicians, and community stakeholders. An outstanding marketing plan provides a return on investment through the generation of new patients, the use of current and new services, and a commitment to the brand or mission, vision, and values of the organization.

Fo c u s e s o F a ma r K e t I n g pl a nA marketing plan for a healthcare organization considers the competitive marketplace, the organization’s capabilities, and the service lines with the greatest economic potential. To reach its targets, a plan can include the development of websites, social media, educational seminars, radio or television advertising, printed brochures, and other materials and activities to promote current and new business initiatives. This process helps an organization shape its overall direction in future years. To ensure that an organization’s available healthcare services are well known in targeted communities, the marketing plan should include information about the internal and external environment and focus on service lines that community leaders believe are important for future growth.

Ho w st r at e g I c ma n a g e m e n t ca n Im p r o v e He a lt H c a r e ma r K e t I n gMarketing can help improve operations—but to do so, organizations should create a strategic marketing plan with input from key stakeholders. Strategic management theory emphasizes the importance of understanding the healthcare organization’s place in its

marketing plan

Written document

guiding marketing

activities by

considering

the competitive

marketplace,

the healthcare

organization’s

capabilities, and areas

with the greatest

economic potential.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

C h a p t e r 5 : H e a l t h c a r e M a r k e t i n g 1 2 7

environment to achieve its objectives and ensure its survival. Effective marketing should also have this understanding so that it can develop a strategy appropriate for the targeted market. A good marketing plan will enhance the managerial decisions made throughout the organization. In addition, marketing provides a solid foundation for efficiently meeting the community’s need for essential healthcare services. Hospital executives are responsible for choosing a marketing strategy that will maximize their organization’s position in the healthcare market and enhance its performance.

According to strategic adaptation theory, an organization’s actions can shape its environment and improve its performance. Among these actions are marketing decisions, which can improve profitability and other aspects of financial performance. Some key features that a marketing plan for a healthcare organization should promote are the organization’s growth and financial outlook, service-line strategy, quality of care, and clinical innovation. With more publicly reported quality measures available, citing positive quality outcomes can be a major strategy and an internal motivator for continued improvement. Similarly, there is growing emphasis on hospital price transparency as well.

Working from a strategic management perspective, marketing is vital for maximiz-ing the allocation of scarce healthcare resources and ensuring the success of new health-care services. Most important, because healthcare organizations operate in a dynamic environment, a sound marketing plan can lead to organizational growth and increased effectiveness.

t H e s I x p s o F s t r at e g I c H e a lt H c a r e m a r K e t I n g

Marketing should be designed to position an organization strategically in a region or across the country. A healthcare business must build a consistent brand to succeed. A traditional approach in marketing uses the five Ps—people, product, price, place, and promotion—to guide marketing efforts. In healthcare, a sixth P—purpose—has a strong influence on stra-tegic marketing. An understanding of purpose can help leaders think about products that can add value and can offer a service different from those of their competitors. Using the six Ps of strategic healthcare marketing can also identify areas for improvement or change required to meet the needs of your target market.

The six Ps of strategic healthcare marketing are shown in exhibit 5.1 and are defined as follows:

1. Purpose: the reason to use strategic marketing. The purpose of marketing can include growth in all patients or targeted patients, the promotion of a new service line or technology innovation, and the sharing of excellence in quality, safety, and service. Purpose drives each of the other Ps.

2. People: patient demographics, along with the physicians and healthcare workers required to deliver a quality service line in the local market.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

E s s e n t i a l s o f S t r a t e g i c P l a n n i n g i n H e a l t h c a r e1 2 8

3. Product: the mission-driven type of healthcare services offered and the data or quality outcomes measured.

4. Price: the fee schedule or rate of reimbursement for the service, adjusted for payer mix.

5. Place: the location of the service, including the facility, parking, signage, and access to major highways.

6. Promotion: the method used to appeal to physicians, patients, health plans, and local businesses. These methods can include focus groups, corporate branding, indirect marketing, and an evaluation of the competitor’s marketing strategies.

A good marketing plan must analyze patient demographics, because the demand for new healthcare business initiatives is often a function of patients’ age, gender, culture, and economic status. When forecasting the profitability of a new initiative, planners should also evaluate payer mix and the level of charity care relative to the new business. The marketing

exHIbIt 5.1Six Ps of Strategic

Healthcare Marketing

People

Patients Staff

Physicians

Product

Mission-drivenclinical service lines Quality outcomes

Price

Fee scheduleReimbursement

Payer mix

Place

Local focusService location

Geographic barriers

Promotion

Focus groupCompetitor's

marketingCorporate branding Purpose

Generate patients

Data-driven new services

Share value

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

C h a p t e r 5 : H e a l t h c a r e M a r k e t i n g 1 2 9

plan should ensure an appropriate payer mix to maximize profitability. A high percentage of patients with commercial insurance will increase the level of profitability for a new business initiative, whereas a high percentage of patients who depend on Medicaid reimbursement or who have no way to pay will reduce profitability.

While the internet is driving much of marketing today, promotion should also con-sider traditional methods such as local radio, cable television, and billboards, especially for organizations with larger marketing budgets. Sponsorship of local and regional events can be a cost-effective way to show consumers how the business is associated with the commu-nity. Direct mail and some print advertising continue to be affordable traditional options and can be beneficial (Forbes Agency Council 2018). Two keys to success are as follows:

1. Knowing who the customers are, and targeting them. The best marketing message in the world delivered to the wrong consumer is a waste of money. For instance, a provider would probably not advertise cataract surgery on ESPN.

2. Developing a compelling, unique selling proposition that makes the organization stand out. Is the service better, faster, or less expensive than that of its competitors? Why would patients come to this institution instead of the competition’s? What can the organization offer potential patients? Good marketers consider what would persuade customers to take action and to choose their organization.

ma r K e t I n g me d I a I n t H e cu r r e n t en v I r o n m e n tStrategic planning for healthcare is subject to considerable outside control and rapid change. Federal and state legislation, physician involvement, and the actions of third-party payers and competitors all affect an organization’s operations. As a result, healthcare organizations need to focus on the external environment and future changes to the industry. By gathering information from external sources, the organizations increase their likelihood of success.

External information includes market position; data on local demographics, com-petitors, and payers; and information on the business environment. Such information is available through online databases maintained by hospital associations, regional health planning groups, the US Census Bureau, and the US Department of Health & Human Services. Major healthcare trends include growth in managed care and accountable care organizations, new initiatives in population health, participation in healthcare systems, and the expansion of ambulatory healthcare services. These innovations are all potential selling points.

A study by Huppertz and colleagues (2020) found that health systems that adver-tised in distant markets were associated with increased volumes of inpatients, outpatient encounters, and overall charges. These hospitals tended to be in locations with lower per

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

E s s e n t i a l s o f S t r a t e g i c P l a n n i n g i n H e a l t h c a r e1 3 0

capita income but were advertising in locations with higher per capita income, suggesting that assessing the market was important to capitalize on revenue opportunities.

t r e n d s I n p r I n t m e d I a

One of the more traditional modes of advertising and marketing for hospitals has been the use of print media such as newspapers, magazines, brochures, and billboards. These methods are often combined with patient education materials by including a healthcare organization’s logos and contact information. Outdoor advertising such as billboards and ads displayed on public transit continue to be used by larger hospitals and other institu-tions. Print advertising can help reach a broader audience. For success with print ads, the material needs to carry any logos and colors through both online and print media so that branding is consistent. Strategic marketers can use online media analysis to find out what is trending and popular from the site and then expand on that in print. They should also keep ads short and consider combining some digital technology with print such as QR codes (scan codes) and links to mobile apps (Forbes Agency Council 2018).

Advertisements for healthcare often use emotional appeal and usually avoid cost information. Of 102 cancer centers that placed 409 unique clinical advertisements in top media markets studied by Vater and colleagues (2014), the majority (88 percent) of advertise-ments promoted treatments, and less than 5 percent mentioned insurance coverage, costs, risks, or benefits. Emotional appeals were frequent (85 percent), evoking hope for survival. Nearly half included patient testimonials, which were usually focused on survival rather than what a typical patient may expect. Research by the American Marketing Association found that when a person reads words projecting positive emotions like peace, hope, joy, gratitude, and inspiration, dopamine is released, triggering receptivity to the information. Negative emotions like fear or guilt hinder the processing of the health information. Paying attention to the emotional tone of both print and media advertising can improve results in healthcare marketing (Nelson 2018).

Social marketing, which combines marketing principles and emotional appeal with the intent of changing behavior, is aimed at benefiting a target audience rather than a single person. This method of marketing has been used in international health programs such as contraception and oral rehydration therapy and is being used more often in the United States for such diverse topics as smoking, drug abuse, heart disease, and organ donation (Weinreich 2020). Social marketing can serve a dual purpose of education and brand recognition for the provider.

t r e n d s I n r a d I o a n d t e l e v I s I o n m e d I a

Healthcare organizations can purchase a span of programming on radio or television media, typically using it to market a product or service. These segments are produced and paid for by the organizations themselves.

print media

Newspapers,

magazines, brochures,

billboards, and other

physical advertising

displays.

social marketing

A promotional

method that “seeks to

develop and integrate

marketing concepts

with other approaches

to influence behaviours

that benefit individuals

and communities for

the greater social

good” (Morgan 2017).

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

C h a p t e r 5 : H e a l t h c a r e M a r k e t i n g 1 3 1

With the rise of Google and Amazon and other tech-savvy companies, spending on television marketing has taken a back seat to spending on internet marketing. Moreover, because television ads typically cost more than radio ads do, often in the hundreds of thousands of dollars, TV advertising is not accessible to all organizations and is restricted to larger healthcare organizations. Radio marketing is more affordable and can target a specific audience.

Direct-to-consumer advertising is a form of marketing aimed at the end users—the patients—rather than healthcare professionals. For example, pharmaceutical companies frequently use television ads for this purpose, and research indicates that this advertising raises prescription rates. Billions of dollars are spent to advertise drugs because the ads work to increase patient use. People ask their physicians for the drug they saw on TV. There are pros and cons to this approach. On the pro side, the ads may empower and engage patients to participate in their own health by giving them the information. Direct-to-consumer marketing can also prevent the underutilization of an effective disease treatment and might increase medication compliance.

On the con side, direct-to-consumer drug advertisements have received their share of criticism. For example, they might misinform patients by overemphasizing the benefits and downplaying the risks. Advertising has also been shown to contribute to the rising spending on pharmaceutical products because of the overprescribing of inappropriate drugs and brand-name drugs (Parekh and Shrank 2018). The same could be said for technology advances like robotic surgery. Patients may request and even expect the technology to be used regardless of the impact on surgical or procedural outcomes. When using direct-to-consumer marketing, business leaders need to be aware of pros and cons around ethical issues.

t r e n d s I n d I g I ta l m e d I a

Digital technology has become mobile. People are constantly connected via smartphones and tablets. The Pew Research Center estimates that 96 percent of Americans own a cell phone of some kind and about 81 percent of those are smartphones. We used to think that only Gen Xers (those born between 1965 to 1980) and millennials (those born between 1981 and 1996) used smartphones, but the survey also showed that 68 percent of baby boomers (born 1946 to 1964) and 40 percent of the Silent Generation (born 1945 or earlier) own smartphones. In addition, almost three-quarters of US adults now own desk-top or laptop computers, and about half own tablet computers and e-reader devices (Pew Research Center 2020). Consumers have come to expect Wi-Fi at a hospital, they research and compare hospitals on the internet, and they have health information at their fingertips. Voice search is another recent trend. Many people use voice search today, asking “Alexa” or “Siri” to help them find information. To address this growing trend, marketing staff should consider using long-tail keywords like “how to treat skin rashes” instead of shorter keywords like “skin rashes” (Burgess 2019).

direct-to-consumer

advertising

Marketing that is aimed

toward consumers

when access to a

product may require an

intermediary such as a

physician prescription

for a medication.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

E s s e n t i a l s o f S t r a t e g i c P l a n n i n g i n H e a l t h c a r e1 3 2

One strategy used in healthcare (and in other industries) is content marketing via webcasts, YouTube videos, and chat rooms. Healthcare marketers should not underestimate the impact of interactive content and videos. There is a saying in digital media: Content is king! Search engines rely on strong, appealing content, and marketing has long understood that emotional content draws a bigger audience than objective facts do. For this reason, patient stories can play a greater role in healthcare marketing than can efforts to tout qual-ity or specialty care.

Digital marketing media can improve the efficiency of the healthcare delivery system and increase market share. Because digital information can be updated from a centralized database, scarce marketing resources are allocated efficiently. The use of digital marketing can also improve the quality of marketing healthcare services. It can provide a competitive advantage by furnishing multiple consumers with up-to-date information and by enabling online consumer response. As consolidation in the healthcare field increases, more effective digital marketing will ensure the success of integrated delivery systems. Healthcare organizations can use five types of digital media: organizational websites, social media, patient portals, blogs, and digital bulletin boards. These types of media are described in the following sections.

Organizational Websites

Organizational websites are a way to connect with individual patients and are a broad marketing tool. This communication method can be difficult to evaluate because a high-quality site may mean different things to different people. Minimally, organizational web-sites should consider accessibility, content, and such user criteria as design, graphics, and ease of use (Jeddi, Gilasi, and Khademi 2017). Accessibility refers to ensuring that the site is mobile-friendly, can seamlessly scale to whatever device someone might be using, and applies universal design principles. Content deals with overall coverage of frequently searched material and the accuracy of information. User criteria would include the perspectives of patients, providers, and staff. To make the design user-friendly, the website developers could seek feedback from all users.

As stated earlier in the chapter, an estimated 81 percent of people look up health information on the internet. A high-quality, user-friendly website can help healthcare orga-nizations increase their brand recognition and provide a communication tool for patients. Some organizations struggle with the industry regulations, brands and logos that are similar, and a huge amount of content that must be kept up-to-date. Other organizations have found ways to follow a comprehensive digital strategy that combines useful features, easy navigation, digital accessibility, engaging and informative content, along with clean and simple designs.

DBS Interactive (2018) describes an example of an organization’s clean and simple website design. According to this digital marketing agency, the Centura Health website

digital marketing

media

Web-based methods of

contacting consumers.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

C h a p t e r 5 : H e a l t h c a r e M a r k e t i n g 1 3 3

navigation has only five primary links and two secondary ones, whereas some websites have up to 20 links on the home page. The prominent display of the search function in the center of the home page also increases accessibility. DBS Interactive (2018) presents additional examples of exemplary websites.

Social Media

Social media encompass websites and applications that enable users to create and share content or otherwise participate in social networking sites on Facebook, LinkedIn, blogs, content-hosting sites (e.g., WebMD), and other virtual communities. Apps like Facebook Messenger, WeChat, and WhatsApp are also being used by business for a personalized approach. Facebook Messenger sees more than 10 billion messages exchanged between individuals and businesses each month (Burgess 2019).

Social media can serve as a research tool in public health. For example, researchers have used social media to track and forecast influenza outbreaks. Social media can also be a source of data in studies of other publicly reported diseases and conditions (Arnold 2018). Hospitals, physicians, insurance providers, and pharmaceutical companies are using social media for the following activities:

➤◆ Releasing information about innovative services

➤◆ Publishing recent research

➤◆ Educating healthcare consumers

➤◆ Sharing patient reviews and testimonials (with permission)

➤◆ Providing customer support and offering healthcare advice

All of these uses come with an expectation of maintaining patient privacy and ethical considerations of what information is provided (Arnold 2018). A strong social media presence can help increase a hospital’s market share by promoting its reputation and increasing its ability to attract patients. For example, patients may perceive hospitals with a social media presence as more likely to offer advanced technologies and evidence-based treatments. Some institutions now include experts in social media as part of their public relations team.

Patient Portals

Patient portals are web-based applications that enable patients to interact and communicate with their healthcare providers. The adoption and active use of these digital tools contin-ues to increase across the United States, driven by Medicare’s stage 2 “meaningful-use”

social media

Websites and

applications that

enable users to create

and share content or

to participate in social

networking sites,

collaborative services,

blogs, content-hosting

sites, and other virtual

communities.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

E s s e n t i a l s o f S t r a t e g i c P l a n n i n g i n H e a l t h c a r e1 3 4

requirements (mandates to promote better exchange of clinical data between the provider and the patient). These federally mandated changes began in October 2013 for hospitals and in January 2014 for physicians. They give patients direct access to their electronic health records, with the goal of improved engagement in their healthcare through better access to their records, self-management, care coordination, and reduced costs. This direct access is especially important in the management of complex cases, in which patients have multiple chronic conditions. Self-management support encourages patients with chronic conditions to make daily decisions that promote healthy behaviors and improve clinical outcomes.

A small study surveying patients and providers found that patient portals increased the efficiency of both giving and receiving health information. Patients perceived benefits such as the ability to view lab results, request medication refills, schedule appointments, and use the secure messaging feature. Physicians believed that the use of messaging in portals avoided interruptions in workflow and was more efficient than making phone calls, for which the physicians often had to leave a message and wait for a call back. The patient frustrations with the portal were most frequently access issues or limited capabilities (Powell and Myers 2018). Providers can greatly enhance portal usage by actively educating patients on how to access the portal and by encouraging them to use specific features.

Company Blog

A company blog can be a basic communication channel for staff. It can build a company’s brand visibility and create a connection to the organization on a personal and humanistic level. The stories on a blog can be short and report things like the organization’s involve-ment in the community, patient testimonials, stories about individual staff (including administrative and physician leadership), and staff’s contributions both at work and in their personal life.

Electronic Bulletin Boards

Larsson (2015) studied the effectiveness of digital signage technology in an emergency department in Montana. She was trying to promote home testing for radon, high levels of which are a health risk in that area of the country. At an experimental site, a digital monitor encouraged viewers in the waiting room to participate in the radon program. She also used the concept of social marketing to appeal to the emotions of the viewers. For instance, one of the screen shots had graphics and the words “Radon kills more people than drunk driving, fires and drowning combined.” The visual-only message (no audio) was almost three minutes long and ran in a ten-minute loop. It was mixed with local events and timely health information. The control site used the standard of care of a radon bulletin board and hand cards with information distributed by staff. ED patients were directed to pick up radon testing kits from the Environmental Services offices. The site

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

C h a p t e r 5 : H e a l t h c a r e M a r k e t i n g 1 3 5

presenting the digital-monitor message had a 50 percent increase in participation without placing additional demands on the staff to distribute the information. It was effective in delivering environmental health information and changing the behavior of the ED patients. This electronic medium could be used for other health-promotion and disease-prevention topics in appropriate settings.

Digital media cannot be ignored in a marketing plan, but a successful plan must have a system to ensure the accuracy and currency of the information. To execute the marketing plan well, health marketers must deal with the prolific flow of health information on the internet and the crucial need for accurate, evidence-based sources for any content they present. Healthcare leaders need to ensure that the health domains on the internet are safe, regulated spaces for health marketing.

I n d I r e c t m a r K e t I n g

Indirect marketing does not target consumers directly but rather aims for brand recog-nition and awareness of a provider in the community. Healthcare organizations are well positioned for indirect marketing because they focus on community wellness and other community needs. For example, hospitals can sponsor charity events, host speakers for the community, conduct free health clinics and health fairs, and provide healthcare services for athletic teams. Hospital and facility signage is one of the cheapest and most effective marketing tools available to healthcare organizations. Because healthcare is a local com-modity, signage placed prominently on the building and sized in a way consistent with local ordinances is appropriate. This signage should be lighted after dark and remain lighted until dawn, regardless of the operating hours of the facility.

Word-of-mouth advertising by patients, physicians, and staff is the most pow-erful indirect marketing tool influencing decision making for prospective patients. A satisfied consumer will return and might even bring two or three family members as consumers. On the other hand, an unhappy patient might discuss a bad experience with the community at large over an extended period, frequently reaching hundreds of potential consumers.

lo c a l ma r K e t I n gThe majority of healthcare services are provided within ten miles of an individual’s home. In these circumstances, geographic barriers such as rivers, bridges, and interstate highway networks affect healthcare marketing. As a result, local healthcare marketing is essential for organizational survival and for creating a strong patient referral network.

By many accounts, healthcare in the United States is a local commodity produced to meet local demand. For this reason, much of an organization’s marketing plan is based

indirect marketing

Advertising that

does not directly

communicate with

consumers but

rather aims for brand

recognition and the

consumer’s awareness

of an organization’s

presence in the

marketplace.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

E s s e n t i a l s o f S t r a t e g i c P l a n n i n g i n H e a l t h c a r e1 3 6

on local data. Leaders developing a local marketing plan should have a good understanding of community needs.

The Affordable Care Act of 2010 added new requirements for hospital organizations to be considered not-for-profit or charitable. For one of the requirements, an organization must conduct a community health needs assessment at least once every three years to identify key health needs and other issues through systematic, comprehensive data collec-tion and analysis. This information can help an organization develop a community health improvement plan by justifying how and where resources should be allocated to best meet community needs. An assessment of a community’s health needs can also serve as another method for indirect marketing by helping the organization form partnerships with the community. Such local marketing efforts should stress the availability of physicians, the quality of hospital infrastructure, and the use of advanced technology.

re g I o n a l ma r K e t I n gAs healthcare complexity increases and health systems in the United States gain market share, the marketing efforts of these systems will increasingly spread to the regional level. Regional marketing can help integrate highly complex healthcare services and reduce costs through greater purchasing power with media vendors.

Medical travel, a variation of the concept of medical tourism, is gaining favor in the United States. Mayo Clinic, for instance, is promoting itself as a destination medical center—a healthcare organization that draws patients from outside the local area because it offers higher-value or unique services. Such medical centers must provide a service that spurs patients to drive past their local providers on their way to an alternative healthcare organization.

As air travel has become cheaper and exchange rates stabler, medical tourism is becoming more viable. More than 50 countries have identified medical tourism as a national industry, often for highly specialized treatments that may be unavailable in the home coun-tries for cancer, reconstructive surgery, cardiovascular disease, or organ transplant. Other services include eye surgery, joint replacement, dental surgery, cosmetic surgery, and bar-iatric surgery. Providers and customers usually find each other via the internet. Developed countries such as the United Kingdom, Germany, and the United States are prominent medical tourism destinations (Connell 2015).

Medical tourism is a relatively new industry that is becoming increasingly competi-tive and consumer oriented. When promoting specific procedures for medical tourism, mar-keting departments should consider highlighting quality metrics that exceed established US standards of care. With access to this quality and cost data, healthcare consumers are better able to assess the value of services among regional and international healthcare organizations. However, medical tourism can create an ethical dilemma because it raises concerns about

community health

needs assessment

State, tribal, local,

or territorial health

assessment that

identifies key health

needs and other issues

through comprehensive

data collection and

analysis.

medical tourism

Traveling outside

one’s local area for

higher-value or unique

healthcare services;

also called medical

travel, health tourism,

or global healthcare.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

C h a p t e r 5 : H e a l t h c a r e M a r k e t i n g 1 3 7

the need to provide quality care to local, as opposed to international, patients (Connell 2015). In some ways, medical tourism represents a dynamic restructuring of healthcare from an industry once assumed local to one that is international in scope. This globaliza-tion of healthcare will require new and innovative approaches to marketing.

Healthcare marketing is a method of educating consumers on the attributes of a healthcare organization’s services. A marketing plan should focus on outstanding clinical services that lead to improved quality and greater customer satisfaction. Many organizations use a multiplatform, multichannel approach—television, radio, print, and digital media; outdoor signage; giveaways; and public relations. When appropriate, healthcare marketing can also promote low costs and increased efficiency. High-quality, low-cost care enhances the value of healthcare. An outstanding marketing plan that stresses customer satisfaction will increase profits and reduce costs for the organization.

r e v I e w Q u e s t I o n s

1. Evaluate the idea that healthcare marketing is an annual process done by senior leadership with limited involvement from key stakeholders.

2. Provide an example from your own personal or work experience that illustrates a marketing initiative that enhanced an organization’s reputation.

3. Does the diversity of a healthcare organization’s staff have any impact on the suc-cess of a healthcare marketing plan?

c o a s ta l m e d I c a l c e n t e r Q u e s t I o n s a n d e x e r c I s e s

According to material in this chapter and the case study, does Coastal Medical Center (CMC) have the organizational capabilities to develop a marketing plan?

After investigating the declining performance of CMC, the new CEO believes that a new strategic healthcare marketing plan is necessary to gain market share. In light of your research, use the following questions to help the CEO develop a marketing plan that will place CMC on a new road to success.

1. Outline a general strategic healthcare marketing plan that is appropriate for CMC.2. CMC is experiencing declining inpatient and outpatient volumes. Develop a list of

five marketing initiatives to improve clinical workload.

s u m m a r y

e x e r c I s e s

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

E s s e n t i a l s o f S t r a t e g i c P l a n n i n g i n H e a l t h c a r e1 3 8

3. Who should be involved in developing the CMC marketing plan, and at what point in the planning process should you consult them?

4. How will you know your healthcare marketing plan is a success?

o n l I n e e x e r c I s e s

Discussion Board 1: Comparing Hospitals’ Marketing Efforts

Go to the websites of three hospitals in your region, and review their services and overall content. In your comparison, view the entire website from the perspective of a patient. Select one organization that you would prefer to use for your care. In one or two paragraphs, explain why you chose that organization. Did its mission, vision, and values influence your decision?

Discussion Board 2: Creating a Marketing Plan

Social marketing sounds similar to social media marketing but is a different concept. Both types of marketing do have some similarities, but social marketing uses emotions to appeal to individuals to change their behavior. To further understand social marketing, google the term to find some examples. One Richtopia (2020) article provides striking examples with pictures: “What Is Social Marketing? And How Does It Work?” (https://richtopia.com/strategic-marketing/what-is-social-marketing-how-does-it-work).

Discuss some ways a social marketing plan could be used to generate support for a healthcare quality issue. Choose one of the following common issues (or write about one you are passionate about): handwashing, taking the flu vaccine, decreasing the use of oxycodone, medication errors, or fatigue (working when tired). Also consider the six Ps: purpose, people, product, price, place, and promotion. What would your ad that addresses one of these topics look like?

Arnold, A. 2018. “Can Social Media Have a Positive Impact on Global Healthcare?”

Forbes. Published June 5. www.forbes.com/sites/andrewarnold/2018/06/05/

can-social-media-have-a-positive-impact-on-global-healthcare/#750710e318a0.

Burgess, M. 2019. “Top 13 Digital Marketing Trends for 2020.” TheeDigital (blog). Published

August 14. www.theedigital.com/blog/digital-marketing-trends.

Centers for Medicare & Medicaid Services (CMS). 2018. “National Health Expenditure Pro-

jections 2018–2027.” www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-

Trends-and-Reports/NationalHealthExpendData/Downloads/ForecastSummary.pdf.

r e F e r e n c e s

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

C h a p t e r 5 : H e a l t h c a r e M a r k e t i n g 1 3 9

Connell, J. 2015. “From Medical Tourism to Transnational Health Care? An Epilogue for the

Future.” Social Science in Medicine 124 (January): 398–401.

DBS Interactive. 2018. “8 Examples of Great Healthcare Website Designs.” Published

July 9. www.dbswebsite.com/blog/8-great-examples-of-healthcare-websites.

Forbes Agency Council. 2018. “14 Ways Print Advertising Can Provide New Audience Poten-

tial for Your Company.” Forbes.com. Published October 19. www.forbes.com/sites/for

besagencycouncil/2018/10/19/14-ways-print-advertising-can-provide-new-audience-

potential-for-your-company/#7f9663563990.

Huppertz, J. W., D. J. Leung, S. F. Hohmann, M. S. Sidhu, and D. P. McKenna. 2020. “Direct-

to-Consumer Hospital Advertising and Domestic Medical Travel in the United States.”

Journal of Healthcare Management 65 (1): 30–44.

Jeddi, F., R. H. Gilasi, and S. Khademi. 2017. “Evaluation Models and Criteria of the Quality

of Hospital Websites: A Systematic Review Study.” Electronic Physician 9 (2): 3786–93.

www.ncbi.nlm.nih.gov/pmc/articles/PMC5410906.

Larsson, L. S. 2015. “The Montana Radon Study: Social Marketing via Digital Signage Tech-

nology for Reaching Families in the Waiting Room.” American Journal of Public Health

105 (4): 779–85.

Morgan, W. 2017. “Social Marketing Definition.” International Social Marketing Organiza-

tion. www.i-socialmarketing.org/social-marketing-definition#.XiNcRMhKg2w.

Nelson, K. 2018. “Emotional Marketing in Healthcare: How Are You Using It?” Published

March 19. Wegohealth.com. www.wegohealth.com/2018/03/19/emotional-marketing-

in-healthcare.

Parekh, N., and W. H. Shrank. 2018. “Dangers and Opportunities of Direct-to-Consumer

Advertising.” Journal of General Internal Medicine 33 (10): 586–87. doi:10.1007/

s11606-018-4342-9.

Pew Research Center. 2020. “Mobile Fact Sheet.” Accessed January 17. www.pewresearch.

org/internet/fact-sheet/mobile.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.

E s s e n t i a l s o f S t r a t e g i c P l a n n i n g i n H e a l t h c a r e1 4 0

Powell, K., and C. Myers. 2018. “Electronic Patient Portals: Patient and Provider Percep-

tions.” Online Journal of Nursing Informatics 22 (1).

Richtopia. 2020. “What Is Social Marketing? And How Does It Work?” https://richtopia.

com/strategic-marketing/what-is-social-marketing-how-does-it-work.

Vater, L. B., J. M. Donohue, R. Arnold, D. B. White, E. Chu, and Y. Schenker. 2014. “What Are

Cancer Centers Advertising to the Public? A Content Analysis.” Annals of Internal Medi-

cine 160 (12): 813–20.

Weaver, J. 2019. “More People Search for Health Online.” MSNBC.com. Published July 16.

www.nbcnews.com/id/3077086/t/more-people-search-health-online/#.XiEPQ8hKg2w.

Weber Shandwick and KRC Research. 2018. “The Great American Search for Health-

care Information.” Published November. www.webershandwick.com/wp-content/

uploads/2018/11/Healthcare-Info-Search-Report.pdf.

Weinreich, N. K. 2020. “What Is Social Marketing?” Weinreich Communications. Accessed

January 18. www.social-marketing.com/Whatis.html.

Copying and distribution of this PDF is prohibited without written permission. For permission, please contact Copyright Clearance Center at www.copyright.com

Copyr

ight ©

2020. H

lth A

inis

tratio

n P

ress

. A

ll rights

rese

rved.