Competitive Intelligence in the Healthcare Industry – Part Two

By Mike Sawyer

_Part 1 of this article framed some of the challenges facing marketers of healthcare providers. It also identified some of the tools at our disposal that can be employed in order to gain a competitive advantage and, hopefully, increase profitable patient market share. Part 2 completes the discussion by focusing on the specifics of some of these tools, with examples of how the pieces fit together, all within the competitive intelligence framework.

The best way to determine consumer perceptions of a product or brand is to simply ask the consumer. Our facility [Southern Regional Health System, Riverdale, GA] routinely engages consumers throughout our service area to determine their impressions of our facility. We ask them to identify our strengths and weaknesses. Of course, we want this same information about our competitors so that we can understand where we do and do not have “consumer equity.” As a large regional player providing comprehensive healthcare services, our facility is not necessarily “the leader” in any individual product line, despite what we might think. We may have the latest technology and the best physicians, but if a patient can’t find a parking space in our lot, is treated with perceived disrespect, or has to wait two hours for a scheduled appointment, all the technology in the world won’t fix the negative impression made on that patient. And a negative experience tends to be communicated (friends, family, neighbors, etc.) more often than a positive experience. It takes all these factors (and many more), working in concert, to win over the patient for potential future visits. There is no better way to measure these impressions, as well as those made by our competitors, than to survey the community and ask for feedback.

Physicians are certainly a critical component of the healthcare delivery system and, as such, need to be queried periodically for input on how well a hospital is supporting their needs in providing care to their patients. Often, physicians share practice privileges with other facilities, even those in direct competition with one another. For this reason, physicians should be viewed as a valuable resource that can facilitate the flow of competitive intelligence. The approach can be, but need not be, less formal than the community perception survey previously described. Nevertheless, it is crucial to maintain the steady flow of communication with physicians and to document that intelligence on a routine basis.

Among the specific areas on which our competitive intelligence should focus are hospital infrastructure, technology, and specialties, as well as unique factors that might distinguish our brand from our competitors. From an infrastructure standpoint, how efficient is our delivery of care versus our competition? Do we have the appropriate channels of communication established to facilitate the best quality of care? Is our physical plant set up to optimally serve our patients’ and physicians’ needs? As an example, hospitals can do a tremendous service to their patients, physicians and themselves by offering extended hours for services such as lab or diagnostic testing. A simple blood test or perhaps a non-critical x-ray can sometimes be done just as effectively after normal business hours. By offering a schedule that accommodates patients’ and physicians’ hectic schedules, we can provide a significant competitive advantage and greatly increase loyalty.

Hospital marketers should also be aware of new technology and facilities that are on the horizon, for their own facility, as well as those planned by the competition. Being the first kid on the block with the latest ‘whiz bang’ piece of equipment can be reassuring to patients and can strengthen relationships with physicians. These acquisitions can be quite expensive, however, and careful thought needs to be given to what advantages are really gained by the investment. Fundamentally, such acquisitions should be supportive of accomplishing specific strategic objectives; otherwise such investments might not bring any “real” advantage over equipment already in use.

As with all competitive industries, hospitals are in a constant battle to capture profitable market share. On an ongoing basis, we should review each of our service offerings to determine the following: the degree of marketing support each should receive; which should be expanded; and which (non-profitable) services need to de-emphasized or even eliminated. It is also important to monitor competitors’ expansion of services, as they are always a threat to our existing services. Hospital A’s desire to open a new cardiac catherization lab and Hospital B’s work on establishing a new OB service so that they can begin delivering babies are examples of how actions by our competition could significantly impact our own operations. Once again, physician partnerships, along with monitoring the required filings with state regulatory agencies, attendance at meetings of local civic organizations and even monitoring of local media outlets, can all be useful in keeping up with the expansion plans of our competition.

Finally, we should not ignore population characteristics of our service area and that of our competitors. After all, the basic principle of marketing is to satisfy the wants and needs of the consumer. Understanding the demography of our population is important to properly define those wants and needs. If we have a large share of elderly residents in our community, perhaps service line emphasis in areas such as orthopedics, rehabilitation and heart and vascular care are most important. For younger families of child-bearing ages, maternity, pediatrics and emergency care are most likely to be important. For those in-between, oncology, surgical services and wellness programs might be of greater interest.

Growth characteristics of the population we serve also need to be taken into account. Is our market growing? If not, then facility expansion might not be an appropriate strategy. Is the service area in and around our competition growing or declining? If declining, are there segments of the population that are growing that might be attractive for us to target? We might find, for example, that a service area is projecting a population decline, but further analysis indicates that the population over age 60 is projected to increase. Senior-oriented programs such as organizing a mall-walkers group or hosting a series of “lunch and learn” seminars discussing health issues for seniors might be appropriate. Plugging physicians into these activities not only raises the credibility of those programs, but also raises the image and awareness of our hospital and provides physicians with the potential to increase their patient base. The bottom line here is that we have segmented our population and have tailored programs and events to suit its specific needs. At the end of the day everyone wins.



Published Wednesday, March 15th, 2006

Written by Mike Sawyer



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