Two things have prompted my post this month. First I read this transcript from public radio about where hospital advertising is really aimed. And then, I was invited to a presentation by the Health Care Advisory Board regarding their take on reform. That put the public radio piece in context. And it further solidified my belief that as health care reforms and hospitals change, marketing has to change as well. Let's start with the radio first.
The radio feature highlights hospitals in my hometown of Philly. It contends that hospital advertising is not aimed at consumers but payers. For example, unless I am in need of a hip replacement now I am not going to pay attention to this advertising. Agreed. But if it is creeping into my psyche over time and then I need the care, well maybe it plays a part. That then drives demand to those hospitals investing in the advertising. That demand, the contention is, helps providers leverage insurers and expect more money.
Let's move to the Advisory Board now for some context. The presenter first used Massachusetts as a leading indicator of where things might go. Italics show the points the presenter made.
In MA, after reform, more people found a "medical home" and increased their use of preventive care. On the flip side, fewer internists were accepting new patients and it took longer to get an appointment.
Implication: Patient experience may suffer. Alternative care settings will start to fill the gaps. So the long term effect of penetrating a prospective patient's psyche with advertising may have no bearing when they need medical care because that care will most likely be given somewhere else besides the hospital. So if you want to advertise, advertise your primary care focus because that is where healthcare will be centered. Drive people to your physicians. Build the medical home. And then you have a shot at this next item.
In April 2010, MA's state employee health plan began offering two new limited network plans at 20 percent lower premium cost.
Implication: Not every provider will necessarily be part of the "favored" accountable care organization (ACO). Positioning your organization in terms of low cost and high quality will be paramount. Some organizations already are preparing for the across-the-board payment cuts by working more efficiently, as if their only payer were Medicare. And that is where the contention that providers can demand more money from commercial payers because they are driving more patients into their network, supposedly through advertising, fails.
It has already been shown that higher cost hospitals do not necessarily provide better quality care. Now you can advertise your quality to your heart's content and that is fine for consumers to hear. But those who decide whether you are part of the favored few ACO's will be looking at hard data--not listening to the radio, watching the TV or reading your newspaper advertising. The radio piece contends it's about perception. I contend it's about data.
Reducing costs will not be enough to survive. It is estimated that providers will have to cut more than 9 percent of costs to break even.
Implication: in the next 10 years despite a soaring boomer and senior population in need of care, hospital occupancy rates are predicted to be flat because the care setting will shift away from hospitals and hospitalizations overall will decrease. So that leaves a lot of competitors going after a shrinking market. Expect consolidations and closures.
For those remaining hospitals that still believe they are actually in the hospital business, advertising may indeed play a part. But the larger issue of marketing must determine where you are focused. Because niche will be the watchword. If you excel at one thing and that makes you an attractive partner in an ACO then that is what you run with in your marketing. Your quality and efficiency will be rewarded with more money.
Future competitive positioning will likely be determined by today's decisions.
Implication: Can you be an "agent of integration" aligning pre- and post- care providers? If not, you may find physicians, especially multi-specialty groups, well positioned to become self-contained accountable care organizations. So unless you own the physicians, you may discover they are your competitor, not the hospital down the street. If the halo effect of advertising attracts physicians to your organization that is great, but advertising does not necessarily help a physician see the hospital as a place to practice. But it could at least get them to consider you.
For my money I would bet on organizations that are building their primary care and medical home infrastructure while also acquiring the other pieces of the continuum of care. And that is where I would concentrate marketing efforts. It is somewhat ironic. In the radio spot, the reporter is standing by a billboard that advertises one hospital on one side and a different hospital on the other. Down the road you may go to the one hospital for your hip and knee replacement but the other for the rehabilitation.
Taking it to a logical conclusion, how long will it be before a large hospital chain buys a large nursing home chain?
Anthony Cirillo, FACHE, ABC, is president of Fast Forward Consulting , which specializes in experience management and strategic marketing for healthcare facilities.