Health Care Market Strategy

Steven G. Hillestad and Eric N.

Berkowitz
 Upset the Apple Cart—Quietly
• Any useful strategy must include a means of
upsetting the competitive equilibrium and re-
establishing it again on a more favorable basis.
• Many physicians consider health care
organizations members of a medical fraternity.
• As a result, physicians or hospitals may compete
with one another, but they would rather avoid the
use of overt and aggressive competitive
strategy.
 Push and Pull
• Push: get doctors, nurses, and therapists
to refer patients to us.
• Pull: get patients to choose us
independently for various reasons,
including word-of-mouth or website visit.
• Push works better now; pull will become
more important as people take control
over their own health care choices.
 Developing Strategy
• We should make no major changes
without first consulting our “heavy users.”
• New strategies should be tested through
limited implementation before full
implementation.
• Find out what our customers really want—
then do it!
Environmental Trends to Watch

• Demographic shifts: Christian NE is

serving more African Americans
• Regulatory changes: competitive bidding
• Technological advances: the C-Leg
• Competitive shifts: Precision closing
• Corporate changes: more practitioners
here at P&O Care
 Internet

• Baby Boomers use computers more and

do more of their own health care research.
• 27% Ages 55-64
• 17% Age 65+
 Marketing or Operations?
1. Awareness
2. Knowledge
3. Perception
4. Contract Access Marketing
5. Location
6. Preference
7. Choice
8. Usage
9. Satisfaction Operations
10. Advocacy
 Service vs. Clinical Quality
• Clinical quality is the cost of entering a market.
• But service quality will be the competitive
dimension of the future.
• Consumers have a difficult time determining the
competence of various physicians and hospitals,
but they have little difficulty perceiving such
characteristics as high-tech or high-touch
approaches, convenience, safe neighborhood,
and friendly staff.
 Market-Based Planning
• Probably the most dangerous marketing
judgment we can make is to presume we know
what the marketplace wants without actually
testing those perceptions.
• A market-based orientation requires health
professionals to accept the fact that the
marketplace should have an impact on decision
making.
• Organizations that consider themselves
knowledgeable about their customers are often
surprised when they find out what their
customers really want.
 Marketing is…
1. The process of listening to consumers
and the marketplace.
2. The philosophy of organizing to satisfy
needs of a group or groups of
consumers.
3. The satisfaction of these needs in a
profitable fashion.
 The Essence of Marketing is…
1. A philosophy of consumer orientation
2. A system of objective data gathering
3. A road to dynamic business strategy
4. A process of business planning
5. An emphasis on innovation
6. A means of performance evaluation
7. A focus for future opportunities
The marketplace should have an
impact on the following decisions:

• Location
• Office hours
• Insurance contracts
• Publication and web content and design
A Health Organization has a
marketing perspective if…

1. Its marketing department has a key role

in the planning activities of the
organization.
2. Its administrator or other key personnel
have marketing experience.
3. There are specialized training programs
for key personnel that emphasize the
marketing concept.
 Build up the referring physician in
the patient’s eyes

Send a package of follow-up materials to the

doctor so that he or she can give them to
the patient at the next visit or send it on to
the patient.
 Differentiation
• When a segment of the health care industry and
an organization are both in a stage of growth,
the major need of the organization is for
differentiation from its competitors.
• The role of the sales force often becomes more
important at this stage. Their key goal is to
control the channels of distribution/referrals.
• The most common way for health care services
to achieve differentiation is through distribution.
 Distribution
• In order to distinguish its offering from
that of competitors, an organization
should consider:
1. Hours/days of availability
2. Number of locations
3. Accessibility/convenience
• The best form of differentiation may be to
have a number of sites with one brand
name throughout the community.
 Key Service Enhancements

• Responsive call-backs
• Respect for time restraints
• Assistance filling out insurance forms
• Next day calls to make sure everything is
okay
• A birthday card
• Newsletter every 4 months
• A free bus pass
 Individuals or Organizations?

• In our society, there is a stronger initial

belief in organizations than in individuals.
• Patients often ask for a specific physician
within a small group but do not do the
same when they go to a larger facility,
such as the Cleveland Clinic.
Better Branding of “P&O Care”

Fewer Requests for Specific

Provider
 Sales
• Personal selling is a promotional technique that
most hospitals and clinics still do not use to its
full potential.
• In fact, most health care organizations have
underestimated the effectiveness of a sales
force.
• The more technical or complicated the service,
the more valuable a sales staff.
• The final role for salespeople is to monitor the
satisfaction of users.
 Importance of Salespeople
(Including our Practitioners)

• The salesperson is part of the “program”

purchased by the buyer.
• The greater the risk that the buyer sees in using
a program, the more important personal selling
is.
• Post-purchase (referral) personal contact is
important in reducing post-decision anxiety.
What Sales Reps to Best
1. Gather Market Information
2. Maintain Referral Relationships
3. Increase Name Recognition and
Familiarity.
4. Distribute Information and Educate
Providers.
5. Ask for Referrals and Increase Sales
 Keep your eyes open

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