Hospital Marketing is Becoming Increasingly Important

How a Well-Planned and Well-Implemented Marketing Strategy Can Attract New Clients

Christiane Kühl |  2016-03-16

Changing health systems and uncertain financial situations are forcing hospitals around the world to better promote themselves to patients and referrers in order to stay competitive. However, marketing measures vary greatly across institutions and countries.

 

Fotos: Sebastian Forkath

A Growing Global Trend
A freeway winding through the lush mountains of China’s remote Guizhou Province is flanked by brightly colored billboards advertising care in private hospitals. They are mostly about andrology – medical services for men – but some showcase skin or diabetes treatments. Most of the other billboards praise the region’s famous liquors. High-profile hospital advertisements like these are still a rare phenomenon in China, but they are part of a growing global trend.


While healthcare institutions have been rather reluctant to adopt promotional activities in the past, attitudes are changing. “Most hospitals in the U.S. still spend less than one percent of their total operating revenues on marketing, whereas most retail businesses spend upward of 10 percent,” said Patrick Buckley, a leading U.S. healthcare marketing expert. However, the share of hospital income spent on promotion is very likely to rise in the coming years.
 

“Most hospitals in the U.S. still spend less than one percent of their total operating revenues on marketing.” Patrick Buckley, U.S. healthcare marketing expert

Directing Patient Flows Towards Your Hospital
Buckley sees marketing as an “absolute necessity,” especially for U.S. hospitals: “The U.S. healthcare system is more competitive than many others.” And competition is what drives marketing. Ironically, patients are rarely eager buyers. Most would rather stay away from what hospitals offer. “However, when a person does have a health-related event that requires treatment, you definitely want your hospital to be at the top of his or her mind,” writes Buckley in his book.1 “Moreover, hospitals and health systems are continually affected by external forces over which they have no control: politics; changes in government regulations; declines in reimbursement; the growth of alternative medicine; the rise of consumerism.” In this changing environment, marketing is one way for hospitals to control patient flows.

 

Different Styles of Raising Awareness
This is also true outside of the U.S. A study on private hospitals in Brazil, for example, found that administrators think marketing is highly important. A well-planned and well-implemented marketing strategy might lead to “the attraction of new clients, which generates higher billing and a higher capacity of investment,” say the study’s authors.2 Another study carried out recently in India suggests that marketing in developing countries could influence patients’ hospital choices by addressing such issues as quality of treatment, transport convenience, and cost.3 In many European countries, however, practitioners are a key target group because they act as gatekeepers by referring patients to hospitals.

 
Of course, the way marketing is conducted varies greatly. The Brazilian study found that clinics with inferior infrastructure and less equipment employ simple forms of promotion, such as direct mailing or newspaper advertisements. Only hospitals with better infrastructure can use more expensive media, such as television. This is different in a richer country like the U.S., as Buckley observes: “Typically, the biggest component of a hospital’s advertising is TV, as it provides an opportunity to convey emotion and to build image. Yet, online advertising is definitely increasing.” Numbers are hard to track, says Buckley, but he estimates that digital advertising makes up around a quarter of hospital advertising spending in the U.S.

 

                                                                                                                                                                                                                          "People want content.” Patrick Buckley, U.S. healthcare marketing expert

 

What Matters Most To Customers
In addition to experimenting with shiny billboards along highways, private hospitals in China are also trying out media advertising and social media. Public hospitals, on the other hand, are not allowed to advertise directly. Instead, they try to cooperate with local media so that they receive positive coverage (such cooperations between public institutions and state media are common throughout China) or they promote themselves via their own websites – though the results are sometimes underwhelming.


A sample study conducted by experts from Shanghai's Fudan University found that only a third of China’s public hospitals currently have their own websites, and that information on medical care and insurance policies often fails to meet the demands of increasingly aware consumers.4
“People want content,” Buckley agrees. Therefore, hospitals should not cling to “vanilla” campaigns, as he calls them (advertising only their advanced technology and concern for patients), but rather should talk about what matters most to their clients: quality and safety.
 


About the Author

Christiane Kühl works in China as a freelance correspondent covering business, economics, politics, and social issues. She has been living with her family in Beijing and Shanghai since 2000.


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1Patrick Buckley: The Complete Guide to Hospital Marketing. HCPro, 2nd edition, 2009.

2EB Leiderman, JL Padovan, P Zucchi (2010): Hospital Marketing: characterization of marketing actions in private hospitals in the city of São Paulo – Brazil. World Hospitals and Health Services 46: 30-33.

3M Ghosh (2015) An empirical study on hospital selection in India. International Journal of Health Care Quality Assurance 28: 27-39

4Xiang De Song, Tian Yi Du, Ping Zhou et al. (2015): Assessing the Quality of Public Hospital Websites in China. Information 18: 557-72.

5Chinese Healthcare Sector, Handbook 2015: Focus on Innovation in the Upcoming Transition. Citibank, 2014.

62014 Global health care outlook – Shared challenges, shared opportunities. Deloitte, 2014. (https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences-Health-Care/dttl-lshc-2014-global-health-care-sector-report.pdf), accessed May 30, 2015.

7China National Health and Family Planning Commission, Population Census 2010.

8D Blumenthal, W Hsiao (2015): Lessons from the East – China’s Rapidly Evolving Health Care System. New England Journal of Medicine 372: 1281-85.

9State Council Website: State Council wants medical reform deepened this year (http://english.gov.cn/policies/latest_releases/2015/05/09/content_281475104224686.htm), accessed June 1, 2015.

10Ibid. 2: 2014 Global health care outlook – Shared challenges, shared opportunities. Deloitte, 2014. (https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Life-Sciences-Health-Care/dttl-lshc-2014-global-health-care-sector-report.pdf), accessed May 30, 2015.

The statements by Siemens’ customers described herein are based on results that were achieved in the customer's unique setting. Since there is no "typical" hospital and many variables exist (e.g., hospital size, case mix, level of IT adoption) there can be no guarantee that other customers will achieve the same results.