It is a sad state when the most common response for “Why did you choose that hospital?” is that it was closest to home. I am well aware that success in fast food, drug stores, and dry cleaning is based on location, location, location. But hospitals? This trend has been demonstrated in recent tracking studies conducted in several markets. Proximity is becoming the primary driver in choosing a hospital in many large, competitive markets.
What does this mean? Is this an indication that healthcare is becoming a commodity? Do consumers really believe that they can get the same care at their local hospital as they can at the academic medical center downtown? Actually – I think it does.
Well maybe not the same care – but good enough healthcare may have arrived. At least for the majority of hospital procedures.
Think about it. Most consumers have difficulty evaluating the clinical quality of their care. And they don’t know whether you have a 4-slice or 64-slice CT – nor do they really understand the difference. And they assume physicians are up to date on the most effective clinical treatments and protocols. So much of their assessment of quality is based on their experience. That includes the communication skills of the clinical and non-clinical staff. The responsiveness of the staff. Compassion, eye contact, respect, and attentiveness. And we all know these can vary at any hospital on any day.
I have been seeing this trend for a few years, but now I am seeing it in markets with some of the nation’s top hospitals. And I believe this is a reflection of very poor differentiation strategies among hospitals. In today’s competitive environment, most hospitals are trying to be all things to all people. The service lines we invest in are the service lines that make the highest contribution to the bottom line – which tend to be the same service lines our competitors are investing in. Most hospitals are targeting the same audience – commercially insured patients and those with the resources to choose elective procedures. And most hospital marketing has a similar look and feel, smiling patients who have the rest of their lives to look forward to because of BLANK hospital.
There are several genuine differentiation strategies used in other industries. And most of these can be applied to healthcare.
- The low-cost provider is a strategy that is often employed by the largest player in the industry. Wal-mart is an excellent example. In healthcare, each market will likely have a player who can claim this, but not yet, for a number of reasons.
- Target a unique audience. A healthcare example of this is Holy Cross Hospital in Silver Spring, MD who is designing programs to target Medicare patients. The ED was the first service line to be launched for the 65+ audience.
- Create a unique experience around the services you provide. Certainly Southwest Airlines, Starbucks, Nordstrom, and many others have done this. Children’s Hospitals do this well. Some cancer centers are moving in this direction too.
- Specialize in a delivering a particular product or service exceptionally well. Many specialty stores use this strategy such as Bed, Bath & Beyond, or Sports Authority. And some health systems have designed specialty hospitals such as heart hospitals or cancer centers.
While some of these may seem like drastic strategies, they are really not difficult if you start small. Consider a specific service line where you have strength but also a desire and the resources to differentiate and grow. And consider various options for true differentiation from the consumer’s perspective. This will likely require research to understand the competitive set and consumer perceptions of your competitors in that service line. But the most important objective of the research is to identify unmet needs. And I can guarantee that with every service line, in every market, there are unmet needs. The most important unmet need will present your greatest opportunity for differentiation. From there, marketing becomes the easy part. You will know who you are talking to, and why your offer is uniquely relevant to them.
Robin Segbers is Principal of Segbers Brand Health and has over 25 years of experience in brand strategy, brand management, market research, advertising, and experience design. Robin has worked with many nationally recognized companies such as the J. M. Smucker Company, Sherwin-Williams, T. J. Marzetti Company, Philips Medical Systems, Pfaltzgraff, Goodyear, and Frigidaire. In addition, her experience includes many health systems such as Fletcher Allen Health Care in Burlington, Vermont; Akron Children’s Hospital in Akron, Ohio; Providence Health Plan in Portland, Oregon; MetroHealth Medical Center in Cleveland, Ohio; Fauquier Health System in Warrenton, Virginia; Billings Clinic in Billings, Montana; and many others.