Content area
Full Text
Today's health care environment is tough and complex. There is tremendous pressure from public and private insurers to lower health care charges by reducing the number of inpatients and the length of their stay. As hospitals respond effectively to this pressure, revenues decrease but many costs remain. The net result is a tight squeeze on profits.
Hospitals a trying to increase profits in two basic ways. One approach is to reduce costs. Cost-cutting efforts include eliminating staff, trimming supply expenses, and restructuring operations to become more efficient. If successful, the cost-cutting approaches can produce higher profits at lower revenue levels.
Another approach is to generate more revenue through increased marketing efforts. However, hospitals often struggle with various issues related to the marketing function. Many see marketing as merely advertising rather than as a comprehensive approach for satisfying patient needs. Because of this, much hospital marketing focuses on general image-building and not on increasing demand for specific services.
In 1990, the general situation facing Louisville, Ky.-based Jewish Hospital was fierce competition from a large number of local hospitals. Most of these hospitals emphasized a broad-based strategy by promoting diverse hospital services. Jewish Hospital had a limited marketing budget and no marketing department. The department had been disbanded in 1987 because management could not determine marketing's specific contributions to hospital revenues and profits.
The limitations inherent in the broad-based approach to health care marketing led Jewish Hospital management to develop a marketing program focused on one specific revenue source, its Emergency Heart Center. Components of the program included (1) a focus on one specific hospital service, (2) an emphasis on building patient relationships by satisfying patient needs, (3) an integrated marketing communication strategy, (4) development of a relationship marketing database, and (5) direct assessment of marketing results.
Focused Strategy
Jewish Hospital decided to employ a very focused strategy. The program built on Jewish Hospital's strengths in the heart care area, especially its newly created Emergency Heart Center. The basic strategic objectives were to:
* Position Jewish Hospital as the premier provider of heart care in the region.
* Increase awareness and use of the services of the Emergency Heart Center.
Increase referrals to physicians for heart care and other medical treatments.
* Increase patient use of...