Competitive Intelligence in the Healthcare Industry – Part One

By Mike Sawyer

Modern ailments plaguing the health care industry are well documented. From a marketer’s standpoint, the challenge for hospitals is to remain viable in a highly competitive environment under increased financial pressures. This means that careful planning and execution of marketing strategies are crucial to long-term success.

The complexities of healthcare marketing in a hospital environment are unlike those of, say, traditional retailers. We cannot distribute discount coupons. More often than not, physicians direct the flow of patients to a facility, sometimes with little or no input from our customer, the patient. Managed care contracts also have a bearing on patient flow. And, obviously, almost all patients would prefer to avoid hospital visits altogether, if given a choice. There are also significant external influences, such as governmental regulations, both state and federal, that affect the industry and a healthcare marketer’s ability to use “traditional” methods. For example, regulations prohibit us from using our internal database of patients to market based on the specific diagnosis of their previous admittance. Fortunately, many (if not all) hospitals are operating on this same playing field, and there are still standard marketing “arrows in the quiver” that can be employed to gain competitive advantage. Competitive intelligence goes a long way in ensuring a healthy prognosis for a hospital’s future success.

The first step in the strategic planning process involves an assessment of the public perception of the hospital, its product lines, physicians, clinical staff, and employees. After all, consumers’ perceptions are, for them, reality. And if a patient feels strongly enough that a hospital can give him or her proper care, he or she will be more willing to exert influence on a physician in the hospital selection. The information we gather should not only include an assessment of our own organization, but also of our competitors’. In short, we want to know as much about our competitors as we know about ourselves.

Without detailing such a study, it is sufficient to say that we want to be able to measure our strengths and weaknesses and those of our competition. Do we “own” any health specialties versus our competition? Are we seen as technological leaders? How well rated are our physicians and nurses? Are we viewed as leaders in the community? This kind of analysis can provide us with guidance into where opportunities for image enhancement and positioning exist.

Another useful tool is readily available quantitative data for the healthcare industry. Many states require facilities to report patient case information on an annual basis. While specific addresses are not available due to privacy regulations, information is available at higher levels of geography, such as census tracts. Simple mapping tools can provide a valuable insight into where the “books of business” are located. It is, therefore, easy to see where cardiology cases originate and to map out market share by facility. Additional mapping of referring physician practices by specialty might be useful in a target market campaign seeking to increase referrals in areas where market share is lowest. Such a campaign might emphasize our strengths versus the competitor(s). Our perception survey results might provide insight into specific messaging options.

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There are other competitive intelligence tools that can be employed to a hospital’s strategic advantage. For example, many physicians practice at multiple facilities, even facilities that are in direct competition with each other. These physicians can be a great source of competitive intelligence, with no sacrifice of loyalty. A perception study can and should be conducted annually, at a minimum, to determine if progress is being made in influencing consumer perceptions and behavior in the selection of a healthcare facility.

Points to consider in the creation of a strategic marketing plan based on competitive intelligence and an assessment of current hospital resources include the following.
  1. Gaining insight into customer perception through the analytical review of customer surveys. Physician surveys can be useful here, too.
  2. Reviewing hospital infrastructure, technology, specialties, unique factors, and comparing them to the competition.
  3. Reviewing planned expansions of our competitors.
  4. Examining population characteristics to ensure that the orientation of the facility is in line with patient needs.
Part two of this discussion (which will be included in the next issue of the the LI Newsletter) will explore these issues and how competitive intelligence can shape the focus of a healthcare facility.

Published Wednesday, February 1st, 2006

Written by Mike Sawyer

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